Australian Financial Review
11th February 2015
Learn more about off-shoring and disruption in the accounting profession, Check out my new book – “Remaining Relevant”
I have noticed that Accountants can be pretty good procrastinators. Really you say! I think it’s because they think they need to get it right before getting started. If you take that attitude then you’ll never get anything off the ground.
There was once a dog food company who invented the ‘world’s best dog food.’ It had everything perfect – the texture, the smell, the protein & fat content, etc. It even had amazing packaging and the dog food company was able to get onto the supermarket shelves at eye level. After a massive marketing campaign the dog owners bought the product with hope and enthusiasm. They fed the product to their beloved dogs however the dogs didn’t like it. The company went broke because they let perfect get in the way of success.
What I like to do is ‘write the brochure first’ before I create any new product. What I mean by that is I will draft the promise, the website or the sales letter and then do some marketing to see if my market wants to buy it. Then I’ll create the product. I don’t want to waste my resources creating something if no one is going to buy it. I like to build the plane as we fly it.
Creating products and productizing your Accounting firm need not be difficult. There are 8 questions to ask and implement:
- What do you know?
- Who is it applicable to?
- How will it be packaged?
- What technology is needed?
- How will it be marketed?
- How will it be sold?
- How will be implemented?
- How will it be supported?
As a nimble, low-cost model we implement new product ideas all the time. They don’t always work. Sometimes the dogs don’t like it. A great example of that was the ‘Rob doll’ action figure – not a big seller!
You have to be prepared to cut your losses fast when you start creating and promoting products. Not everything will work as planned. Just because you like it doesn’t mean your market will. You can’t pre-judge who will buy and who will not. With your best marketing give everyone the chance to buy what you have.
If you’re onto something that is working then get testimonials / case studies from happy clients (we call them WHAM’s – written happy Accountants moments) and leverage those so you can sell more. Keep testing different methods of explaining, promoting, packaging & pricing until you get it close to being right.
Then rinse & repeat. Over and over and over again!
We asked 428 business owners if they were interested in you having direct access to their data in real time and then send you alerts and advice if something untoward is happening. As you can see 21% are not interested at all yet 79% said they were interested in this, said it was worth exploring or suggested that is what you should be doing in the first place!
With real time data consolidated into one location using tools like PANALITIX (www.panalitix.com) you can interpret the numbers, be alerted to what is going on and then advise your clients accordingly.
With all of this data at your fingertips, what are you going to do with it? I think you have a duty of care and obligation to advise the clients how to improve the numbers. If you are living by the mantra of ‘all clients are buying all services that help them achieve their goals’ then it’s not selling new services. It’s servicing your clients properly.
Here is a list of 14 services that you could offer:
- Cash flow forecasting and analysis
- Profit improvement program
- Monitoring & accountability program
- Debt re-structuring
- Capital raising
- Interest reduction service
- Waste audit
- Revenue improvement strategies
- Creditor analysis & negotiation
- Product profitability analysis
- Debtor management service
- Tax planning & tax minimization
- Business Planning
- Inventory management system
All are valuable services that will make a significant impact to your client’s financial future. By ‘staying close to the numbers’ you have a better chance of the client buying the service. With good systemization of the services you can have Accountants of all levels deliver the service – not just the Partners.
You will need to learn some sales skills on how to have your clients buy them. You will also need some new tools (get rid of the spreadsheets, please) so you can systemize the services.
Now here’s the big one. We all know that cashflow (lack thereof) is the main reason businesses fail. The number one issue in businesses around the world right now is cashflow management.
We all know it and the Accounting profession is uniquely placed to help improve it.
Your clients want it as well. Well, not all clients want it. In our survey 29% said they did not. However, 71% said that if the service was reasonably priced and they could see value in it then they would be interested in exploring the idea.
It’s a no brainer. I ask Accountants what’s the most valuable service they can offer to their business clients. No surprises. It is cashflow monitoring and forecasting. So if it’s the most valuable then how many of your business clients have a live, working, accurate and real time cashflow forecast? Very few is always the answer. Yet this is the most valuable thing you can do. Here’s what we (the business community) want when it comes to cashflow. We want to know how much free cash we have each month to spend on whatever we want to spend it on. We want to know how we are tracking and what we can do to improve it. Your clients are not financial analysts like you. You can help us in this area.
The service you provide is a cashflow forecasting and monitoring service. In your definition you call it a ‘3 way rolling cashflow.’ It covers the cash flow forecast, the profit & loss and the balance sheet. If your client is borrowing money from a bank then the bank wants it. Even if your client is not borrowing money then it is a good thing to have. The problem with ‘hard drive’ based systems (or heaven forbid spreadsheets) is that once they are created they are out of date. By using old technology you cannot monitor the cashflow unless it is manually entered.
With cloud accounting and ‘add on’ partners like PANALITIX you can do this automatically. You can prepare the forecast based on historical data plus some planning. You can ‘normalize’ the numbers month to month with the client. You can consolidate the data as it is transacted at the client’s end and because the accounting data is linked to the ‘bank feeds,’ the cashflow, the forecast and the balance sheet is kept up to date every single day. Now that’s Real Time Accounting!
If the bank needs an update then you can provide it quickly. If your client wants it then you can provide it quickly. If you have got your client on a monitoring service then you can be immensely valuable.
Becoming the Real Time Accountant is more than a goal, a wish, a hope or a mindset shift. It’s about changing your behavior, your systems, your technology and your services. It’s about making a difference.
RIP the Redundant Data Accountant. Rise…the Real Time Accountant.
PS. A full report on what 428 business owners want from their Accountant can be downloaded for free by clicking here.
Most accounting firms set no goals or at best they set small goals. If they do set any goals they set SMAG’s – Small Minded Adequate Goals.
If you go back to my success formula (doing what you want, when you want, with whom you want, in a manner you want) then a SMAG may be appropriate for your style. At least it’s a goal – albeit a goal that doesn’t full your potential.
In my opinion (and this entire book is based on my opinion – plus a lot of research) we’re only here once so let’s do something purposeful. Let’s do something grand. Let’s do something that lives beyond us.
Let’s set some BHAG’s – Big Hairy Audacious Goals.
From the seminal work of Jim Collins in his landmark book ‘Good to Great’ the term BHAG was first used. A BHAG can inspire you, your team and your clients. The great USA President, John F Kennedy, had an awesome BHAG that inspired the nation and many parts of the world.
“By the end of this decade we will put a man on the moon and bring him back safely”.
Now that’s a BHAG. Now apparently it did happen. Either way it got people excited and hundreds of millions of people watched in excitement in July 1969 as Neil Armstrong and Buzz Aldrin walked on the moon and then returned safely to this planet.
What then followed was NASA, space exploration, new research, new industries and now (at the time of writing) there are at least 3 wealthy Entrepreneurs building and testing space craft to take the regular public to sub orbital space. I am one of those ‘Future Astronauts’ where at some time in the future I will be flying on Virgin Galactic into space. My wife bought me my ticket in 2009 for my 40th birthday. Pretty cool gift and pretty cool wife!
BHAG’s for an Accounting firm come in many shapes and sizes. The BHAG could be revenue related “$10M in Revenue in 10 years”. It could be team member related “100 of the best, brightest and most creative Accountants on the planet”. Or it could be client related “All of our 500 clients are financially retired.”
Whatever the BHAG is it needs to be bold, it needs to inspiring and it needs be easily communicated. It needs to get you excited and it needs to get the team excited.
Before the BHAG is your purpose and your mission. Why is it you do what you do? What’s your purpose for being? Why do you go to work every day? Why do you care so much about your clients? As bestselling author and TED star, Simon Sinek, would say “people don’t buy what you do they buy why you do it.”
Some examples you may want to R&D….rip off and duplicate.
Purpose: Making a massive difference to clients financial performance
Mission: Help all of our clients to financially retire
BHAG: By 2020, 100% of our current clients are financially retired
Purpose: Helping all clients achieve all of their goals
Mission: Provide every service to every client that helps them achieve their goals
BHAG: $10M in revenue from 400 Awesome clients
I particularly like client focused purpose, mission and BHAG’s. And the reason for that is you can promote it to the clients. You can use it in your marketing. Let’s say you’re talking to a new prospective client. The conversation might go something like this:
“At our firm we help our clients achieve all of their goals. We make sure that every single client is only buying what they need from us to help them achieve their goals. We’re only looking for 400 awesome clients who want our help to achieve their goals. Tell me Bob, what are you looking for in an Accounting firm”?
Unless Bob is a complete ‘nuff nuff’ (technical term for not a very good client) then he’s probably going to answer with “An Accounting firm that helps me achieve my goals”. Sale made. Rinse & repeat.
Get creative with this. Start with what you (the owner) wants then involve your team. Some of your team members have some super ideas. Ask them individually why they became Accountants. Ask them what ‘juices’ them up. Ask them what they want from their careers. Ask them what they would do if they were running the firm. Get to a consensus. Then do a reality check and see where you are today with your Purpose, Mission & BHAG. After that it’s action time. If you want a different result (BHAG) then you have to make some different decisions and then Action those decisions. Decision + Action = Result.
For my business advisory software company (www.panalitix.com) we are very clear what our purpose, mission and BHAG are. They help us make decisions and help us keep on track.
Purpose: Positively influencing lives through Accountants
Mission: Make Accountants real time
BHAG: 10,000 ‘Real Time’ Accounting firms using PANALITIX every day
What is your purpose, mission and BHAG? When you’re done send it to me, I’d love to see what you come up with.
I am well into my seminar tour of 14 cities right now. It’s called ‘Capitalising on the Cloud’ and it is getting rave reviews. 5 cities so far with 9 to go. We have record numbers attending and right up front I ask a question who is a Partner of the firm and who is a Team Member.
We are getting a dis-proportionate amount of team members versus partners. That means Partners of the firm are sending other people rather than themselves. I started asking the team members what the strategy is with cloud. The answers are typically ‘I am here as the product champion for cloud’.
Many Partners are treating this as a product discussion not a strategy discussion. It’s a strategy discussion not a product that needs implementing!
Cloud technology affects every area of the Accounting firm. Like:
- Your labour force. With 30-40% efficiencies do you need as many people and are they the right people in the future.
- Your firms systems. Cloud practice management changes the dynamics of how you work internally.
- Your client locations. You can have clients anywhere in the world.
- Your labour location. With internet based systems your labour force can be anywhere.
- Your services. With data that is real time, accessed anywhere from any device it means you can offer much much more value added services.
- Your value. By being a ‘real time’ accountant with real time information you are offering a tremendous amount of value.
The last point is the big one. Offering value 9 months after the fact has no value to the client. It’s redundant data and useless.
Get on the front foot and embrace the cloud as a strategy – not a product. My seminar is all about the strategy and the how to. If you are already registered looking forward to seeing you. Make sure the partners are attending. You can still register for the remaining 9 events. Go to www.cloudseminar.com.au for more information.