I have this little test I do with Accountants to see if they are servicing their clients properly. Here it is.

Grab any clients’ income statement for 3 years, their balance sheet for 3 years and then explain the ‘story’ of the client to 2 other Accountants in your office. So tell them what the client does, how they do business, what their structure is etc. The other 2 Accountants are then to brainstorm (and you can be part of it as well) the answers to these 8 questions:

  1. What ideas do you have to help this client grow revenue or wealth?
  2. What ideas do you have to help this client increase their profit?
  3. What ideas do you have to help this client understand and improve their cashflow?
  4. What ideas do you have to help this client protect their assets?
  5. What ides do you have to help this client with succession planning or selling their business?
  6. What ideas do you have to minimise tax for this client in the future?
  7. What ideas do you have to help this client to financially retire?
  8. What other opportunities are there to provide extra services to this client that they are not already using?

Don’t spend more than 30 minutes  per client brainstorming. When you do I can guarantee that you have ideas (services) that you can take to your clients that will help them in some of these 8 areas.

These are all needs (services they should be buying) that are currently unmet. They do not know that you know the answers. The client certainly does not know what you know – otherwise they would have done it.

When you do this with all of your clients you will find that 100% of clients have unmet needs. Does it mean they will buy them from you? Not necessarily – but at least you should give them a shot at buying the service(s). Not offering additional services to your clients (especially when you know they need them) is doing your clients a complete dis-service.

You must service your clients properly. If you do not then there are plenty of ‘hungry’ accounting firms that will.

The glory days of the reactive Accountant who makes $300K plus profit (per partner) are coming to a grinding halt. Unless of course you know of the signs and you do something about it.

In the past it has been ‘easy’ to make a good living in the Accounting profession. Clients have been loyal. There has been little competition. The government has kept the profession in business with legislative changes. The costs of operation have been low and you really have not needed to market and sell.

It’s all about to change. And fast.

There are 3 current impending threats and if you do something about it they can be 3 wonderful opportunities.

1) Internet based (Cloud) Accounting.

There is a groundswell going on with business based accounting systems. There is a massive push to take accounting systems mobile – in the cloud. It makes total sense. Every other type of information is going mobile through tablet PCs and Smart phones. It was just a matter of time before accounting information caught up. Cloud based accounting is brilliant for the business owner. Real time everything from wherever you are. Debtors, Creditors, Revenue, GP, Profit, Cash-flow – all on your mobile device.

Because of the ‘realtimeness’ of the data and because it is already connected to the internet the time taken to have the annual compliance completed drops. It is estimated that it takes around 30-40% less time at the accountants end to prepare the compliance accounts when the client has cloud based accounting. This means fee pressure from your clients for compliance as compliance becomes a commodity. This is already happening. It also means (for you) much more capacity as well. So you either downsize your team or have capacity to offer value added services. Please choose the latter!

Cloud accounting reminds me of internet banking 8 or so years ago. Some early adopters and a lot of naysayers. Now? What’s a cheque book?  The same is happening with cloud accounting. Jump on it and promote it. If you don’t someone else will promote it to your clients.

2) Client education.

Clients are more savvy these days when it comes to dealing with accountants. The days of ‘Dad used XYZ firm so we should as well’ are numbered. Clients are asking more questions of their accountants and expecting more. They are interviewing a number of firms before switching. Clients are more connected than ever to information and the business press is promoting more and more ‘what your accountant should be doing for you’.

Are you going to stay on the back foot and react or get on the front foot and market your firm? Are you going to just stick to compliance based services or are you going to actively seek out products and services which can make a difference to your clients?

In the western world there is (approx.) 1 accounting firm per 2,500 head of population. That’s a lot of accounting firms. The issue is that it’s a sea of sameness out there with the accounting profession. For you to differentiate you must differentiate.

3) Other ‘professionals’.

Bank managers, financial planners, insurance agents, consultants, business networking groups, industry associations, real estate agents and business coaches all need to develop new products and services to remain relevant. And they know that you are the gatekeeper to businesses. They know that to remain relevant they must offer ‘value added services’ – not just what they have been doing in the past.

They can buy financial analysis software, attend the course and overnight they are a financial whizz. With the new information they can provide cash-flow analysis, KPI reporting, benchmarking, planning and even management reports to their (or your) clients. THIS IS YOUR SPACE. Do not let them erode the value that you can provide to your clients. Get on the front foot and offer these services – NOW.

Take the positive approach to these 3 threats and use them to your advantage. There are 3 great opportunities here if you act now.

I was asked a question last week as to when an Accountant should be using Value Based fees or value pricing. Simple answer – 100% of the time.

Let me explain. Let’s start with a definition from the guru of VBFs and my friend Alan Weiss.

“A value based fee is a fixed fee that represents your contribution to the value your clients receive, representing a dramatic ROI for them and equitable compensation for you”

So if that is the case then in an Accounting firm you are always contributing value. Even with compliance and audit work you are contributing value.  The trick is to determine (with your client) what the value is that you are contributing. You need to get creative and work out the tangible or intangible value you are offering.

Here are some examples:

Tax planning service VE (value equals) knowing how much to pay and maybe a reduction

Compliance service VE the ability to make better management decisions, basis for planning & keep out of gaol

Systems audit VE knowing what to do to improve efficiency levels

Cashflow management VE Understanding and freeing up cash

Audit VE accuracy of records for better management decisions

Valuation VE ability to realise wealth

Personal income tax return VE tax refund (potentially)

And so on.

If you can work out the value you are contributing then you can work out what is a fair ROI for the client and then you can work out a fair fee for you. You will never work out a fair fee with a time X rate model. How do you know if the price is too low or too high?

The only right price (and it MUST be a fixed price) is just before the client says no. If they keep saying ‘yes’ then the price is tool low. Let the market place determine your value – with their payment or their feet.

You have to remember that without your expert help as an Accountant your clients cannot realise all of their potential. You have to believe that. And that’s the first sale – to your self.

Today is the first day of Spring in the Southern Hemisphere. Time for a spot of business spring cleaning. You know what it’s like when you clean out your wardrobe or your garage – it just feels good.

The same applies for your business.

Today is a good day to make some decisions and get rid of some baggage that might be holding you back. As my buddy, Michael Sheargold, is fond of saying “A breakthrough often happens after a breakwith”.

What do you need to breakwith in your business?

  • A system?
  • An attitude?
  • A piece of furniture – or the entire ensemble!
  • A product or service?
  • A supplier?
  • A team member or team members?
  • A business partner?

Business is a bit like monkey bars – you progress by letting go.

Monkey Bars Small

I was chatting with my buddy Michael Sheargold (super coach to the super star Real Estate Agents) 2 days ago and he told me about a real estate seminar he is running around the country as well as Auckland.

It’s called SuperCharge Your Results and designed for real estate agents and principals.

I floated the idea of being able to secure some complimentary tickets (they are $197 per person) for my blog reading Accountants to “gift” to your real estate clients.

Of course given the great relationship Michael and I have, he said sure thing! So you have up to 4 complimentary tickets to give to your real estate clients – very cool!

Now my recommendation here is that you become the hero (in your clients’ eyes) and give them a quick call and let them know what you’ve been able to organise for them.

You’ll also see a pdf of the brochure for you plus for more info about the event you can pop onto…

I’ve organised a special code so all your clients need to do is book in on the site and then pop the coupon code of ACC7 to take advantage of the relationship you have with Michael.

Or Michael has just popped an extra video up on Youtube at…

To be a success in the Accounting profession you need to focus on increasing the average project fee per client. Not the total fee but for each transaction how much margin do you realise.

Here are 11 points to implement to increase the value of each project – without increasing the labour component.

  1. Realise and believe your services are worth more
  2. Find the courage to charge more
  3. Increase all prices immediately
  4. Offer additional services at the time of buying
  5. Have a standard menu of services and price list
  6. Price in advance not arrears
  7. Articulate the value of each project eloquently
  8. Get rid of low margin services and low margin clients
  9. Improve your language and sales skills
  10. Target more profitable clients & services
  11. Use value based fees – not time X rate!

I am flabbergasted at the lack of questions that come from Accountants. In our live workshops, our on line forum, our coaching meetings and even in general conversations – not enough questions are asked.

In my world we are providing systems, tools, education & coaching about matters that our clients (Partners of Accounting firms) want to learn:

Profit, People excellence, workflow, efficiencies,  leadership, marketing, sales, value pricing etc.

These are all topics that my coaches and I are experts on. You are expert in finance, tax, structuring etc. Our clients pay good money to learn new ideas in each of the above topics yet when it comes time for questions – they seldom come.

I know we are good but we cannot be that good and explain it that well that minimal questions are forthcoming.

Why are you not more curious?

Why don’t you ‘put it out there’ and get clarification?

Why don’t you post more questions on our online forum?

I think I know the answer. You have been trained (by whom I am unsure) to be expected to know the answers. And anything less than knowing the answers is seen to be a sign of weakness.

I think by not asking questions – that is a sign of weakness. By not asking questions you are saying that you ‘know it all’. And you know what they say about people who know it all – they know little.

You might think that your question is a stupid question. Let me assure you the only stupid question is the one you do not ask.

I just don’t get it. I really don’t. There is a direct correlation between the curious ones and business success. Always seeking clarification and asking questions. Ask a better question – you might just get an answer and speed up your progress.

Go on – ask!

For many firms the concept of ‘pricing up front’ scares them. They are scared that the price will be wrong, that there will be ‘job blow out’, that there are variations and the dreaded ‘what will  the client think’?

Once you get over yourself and start pricing every job up front you will find that the clients love the fact that there is certainty in the price and scope of work. You will be pleasantly surprised.

To help you with some of the mechanics you need to have 2 paragraphs in your engagement / implementation plan letters:

Paragraph 1 – deals with ‘scope creep’ – when there is more in the job then you first thought:

“The price listed is for the scope of works that are documented that we have both agreed on. If there is anything outside of this scope that you request, or if we find additional matters that need dealing with that have not been listed and priced then we will communicate with you separately with what they are and how much the additional price will be.”

Paragraph 2 – deals with offering phone calls and emails.

Please feel rest assured that you can contact us as often as you like with questions or for
assistance. Our Annual Accounting Service only covers those discussions which assist you
with your initial query. If as a result of our discussions and/or upon your request, we deem that
there is work to be performed that will fall outside of our Annual Accounting Service, we will
advise you of this before we commence any work and provide you with a fixed price
engagement to complete the work, at your discretion.

“As part of this service you can contact us as often as you like with questions or for assistance. Our [Service] only covers those discussions which assist you with your initial query. If as a result of our discussions and/or upon your request, we deem that there is work to be performed that will fall outside of our [Service], we will advise you of this before we commence any work and provide you with a fixed price engagement to complete the work, at your discretion.”

By adding these paragraphs you will serve your client better and improve your margins. Win:Win!

What a day it was yesterday. During the day at my “Sales Success” workshop with 120 Accountants I had the legendary Paul Dunn speak to my group. And during the night I sat next to our former (and the most successful of all time) Prime Minister – the Hon John Howard AC at a charity dinner.

What a day!

Paul is 68 years old this year and he enters his 5th decade educating and inspiring people. He spoke for 100 minutes on the meaning of ‘being remarkable’ and creating ‘WOW’ experiences in your business.

Paul has been instrumental in my career (I have known him for 25 years) and over the years he has inspired >10,000 accounting firms over the years to greatness. His energy is second to none and he was genuinely interested in making a difference- not just going through the motions.

Mr Howard is an absolute master. It was the first time I have met him and at 72 years old he is still the consummate professional who made an effort to meet as many people as he could.

I was speaking to the leader of the QLD opposition (Campbell Newman) whilst Mr Howard was ‘working the room’ and I said “Look at this Campbell, he’s 72, he doesn’t need to do this and he is making everyone so welcome”.

Mr Howard spoke to the group for 28 minutes covering leadership, team work and political topics. Over dinner we spoke privately and extensively, about the state of the political arena, sporting leadership and some of the more interesting people he has met in his illustrious career.

What a day – 2 legends to be inspired by!

Paul Dunn

John Howard - dinner

John Howard

It was awesome to be the keynote speaker at the first ever Xero partners conference in Melbourne. 170 Accountants from all over Australia got to see first hand what is happening with cloud accounting.

At Nixon Advantage and through our Proactive Accountants Network we are 100% aligned with what Xero are doing. In fact, we are creating our own cloud product which will enable our certified member firms to offer a KPI monitoring service to their clients. The software solution will offer real time benchmarking and valuable data that is “alerted” back to the accounting firm. We are already providing advisory content that our members use with their clients and with this new product (which is ‘skinned’ as your product) it will enable you to connect much better with your clients and offer them something they cannot get anywhere elsewhere.

Watch this space.

In the meantime enjoy the Presentation from yesterdays keynote.