Today marks 21 years to the day working exclusively with Accounting firms around the world. On May 20 1994 I presented a seminar to the small business clients of Ellis Ryan in Coonamble, NSW, Australia. It’s a small town of 3,000 people literally (for my USA readers) in the ‘outback’. Prior to meeting Ellis I was running a series of seminars for small businesses. I was using all sorts of marketing to get them into the room – TV, Radio, Newspaper ads, Mail, faxing etc. None of it was working and I was going broke a million miles an hour. Ellis attended my very large seminar (8 people only) the month prior and said ‘will you come to my town and do this seminar for my clients?’ Absolutely I said.
So I designed a direct mail marketing system that Ellis used to promote this seminar. His letterhead, my words and his signature. We had 56 people turn up to the Coonamble RSL Club (Returned serviceman’s club). 56 people! He only had a client base of 126. We were amazed. It was the biggest event I had ever done. I made a profit of $2,500 on the night and I thought – wow, these Accountants are really great at filling a room. So from that day I have worked exclusively with Accountants. It’s my birthday so here are some stats that I am proud of:
In the last 21 years…
- Around 150,000 people in live seminars
- Around 30,000 people on webinars
- Around 2,000 speaking engagements of some sort
- Product in 42 countries
- 1 job and 5 businesses (one of the businesses has had 3 brand makeovers)
- Spoken / interviewed or visited Accountants in 8 countries
- 2 books written and published
- Hundreds of articles, white papers & blog posts
- Dozens of media interviews
- Thousand and thousands of Accountants helped
- Around a hundred employees coming and going
- No idea how much new revenue & profit created for Accountants – but a LOT
- 1 brilliant piece of software which will shape the profession globally
I have stuck to Accountants because I believe in them. I believe they are the natural trusted adviser. I believe they can help their clients to run better businesses. I believe that when they have the real time data they can make a massive difference. Pumped!
PWC just released an excellent report (click here to get it) on the future of employment in Australia. They’re estimating 44% (5.1M) of all current jobs will be replaced by technology. Of the jobs at risk Accountants and Book Keepers are No. 1 with 263,348 jobs affected. Why wait for the inevitable to happen? Get involved with Business Advisory services right now. We can help you do this.
To grow and develop an Accounting firm it needs 4 areas of focus – workflow, people, clients & revenue. The challenge is that if you just focus on workflow then revenue growth will not happen. If you just focus on revenue only typically the ‘wheels fall off’ workflow and people development.
The key is to focus on all 4 at all times. You need people who are leading the key areas to focus on the key areas. The outcome is more cashflow, profit, happiness, growth and improves lifestyle. All the good things in life!!
This one is a touchy subject for some. So before you get angry and send me hate mail open your mind to the possibilities…..
In 2014 there were approximately 50,000 Australian office jobs sent to the Philippines alone. According to experts this number is set to double this year and continue growing each year. It can be a touchy subject with some people but it’s not going to go away. Clothing has been manufactured overseas for years and now it’s office jobs. When the labor costs are 1/5th to a 10th of what we pay in Western countries it is a compelling opportunity for businesses to consider. There is also an abundance of people who are educated and very keen to work.
Although many Asian countries are offering outsourcing resources, I am most familiar with the Philippines market. There are approximately 1.2M people currently hired (in the offshoring/outsourcing space) and it is growing at 20% pa. They cannot build the office facilities fast enough to house them all. To become a qualified CPA it takes 5 years after university and you can hire them for around $4 – $7 per hour. This is considered a good salary.
When I first visited on an outsourcing study tour the following line got me: “any job that is done over the phone or behind a computer we can do for a 1/5th to a 10th of the cost.” So basically any non-customer facing role can be done cheaper and often better.
The use of cloud technology is critical to making this happen in accounting firms. Instead of sending large data files backwards and forwards, the offshore Accountants are working on the same file you are. If Accountants locally are not adding value to the work they are doing then their days are numbered.
The Accounting firm of the future will have local team members who are customer facing and adding value. Everything else will be done somewhere else. This is happening right now.
Many Accountants I have spoken with reject this reality because they still want to hire ‘locally.’ Hiring local people is a very noble thing to do. I do it but I do it for customer facing roles mainly. Many Accountants are worried what will happen to the profession if they don’t hire local graduates and train them. This is a good concern to have. It’s also a real one. If you are going to shift your processing team offshore then how are you going to train local talent to ‘come through the ranks’? The entire training model might need to be turned on its head as well.
The challenge you have got is other firms are doing this and they are using the significant cost savings as an advantage and they are reducing their prices. With a (up to) 80% cost reduction on labor costs the ones that are using offshore teams can hire more people and give a better service. They can do more marketing, create more products and give a better experience to their clients.
The biggest challenge you will have with this strategy is ‘selling it’ to your existing team members. They will feel their jobs are threatened. If you take the view it is a business growth strategy and not a redundancy strategy then that will help a lot.
You don’t have to go in ‘boots ‘n all’ and create your own full-time team from day one. You could start by hiring contractors on the various contractor websites to do one-off special projects.
In the not too distant future here’s what your offshore team could look like:
- Your internal finance team
- Marketing team – all functions
- Sales coordinators
- Client Services assistants
- Technology creation and support
- Accounting processing team
- Product & systems developers
If you are interested in this space then I strongly suggest you hop on a plane and go on a study tour (email me and I’ll send you details of reputable tour operators) so you can see it for yourself. As the tour operator (Mike) said to me:
‘Many people come over here with their current business or product in mind. Then they see the machine in action. When they leave they have invented new businesses and new product ideas’.
The machine is full of gas and is waiting to be started.
Most Accounting firms are operating their business by default – not operating their business by design.
Most Accounting firms just seem to exist. They get through the years with a limited plan, they seem to ‘acquire’ a bunch of clients who are ‘hotch potch’ of make, model & size. They do not typically run the firm like a business, and worst of all the Partners typically operate the firm based on leanings from the Partners of the firms where they used to be employees.
This beast that you own is a business – not a practice. You own it. You take all the risk. Your name is on legal documents. Your name is on the insurance policies, the credit cards, the loans, the leases. Your entire team will all leave one day (they eventually always do) and you’ll still be there. Your clients are in the deal for their annual fee and their work done. Your team members are in it for their salary and career progression. You are in this thing for millions!
This thing that you own is not a community service or a charity. However, many firms operate just like that. They operate like a not-for-profit, community-serving establishment taking on clients they don’t like, doing work they don’t like and dealing with people they don’t particularly like either.
Remember, it’s your business and no one else’s. You should be the benefactor of the spoils and the one enjoying it the most. One of the key purposes of a business is to create wealth for the owners. How’s that going for you?