We released our annual benchmark report last week. Hundreds of firms sent in their financial data, we analysed it and then produced a 23 page report on our findings.
Already thousands have downloaded it (if you haven’t got it yet the entire report is available here for free) and no doubt it will be the topic of conversation at many partners meetings coming up.
I noticed this year that profit per partner was about the same as last year (A$344k in Australia and A$259K in New Zealand) and many of the other metrics are very similar.
Does that mean that there has been limited improvement? Probably. I often wonder why that is. I think it comes down to being comfortable.
Think about it. The Accounting profession is a pretty solid business with the majority (in the small to medium sector of firms) of work in annual compliance. Every year you have to ‘do the books’ of your clients (whether they like it or not) and every year there is some form of legislative change that you need to implement. You have the status of ‘trusted advisor’ so when other business opportunities occur you’re often the first to be called upon. Put into the mix that you have ‘financial intimacy’ with your clients (you know things that no one else does – or you’re the first to find out) which means they stick with you for a long time as well.
In my view all this ‘comfort’ breeds apathy and lack of innovation.
There are many changes afoot and massive disruption on the way (make sure you read my dossier and open letter to the profession in the first few pages of the report) which will hopefully (as they happen) break the cycle of apathy, reactiveness and limited innovation.
My company offers performance coaching & training for Accounting firms. We build really cool software solutions to help accounting firms succeed. My biggest competitor is apathy. There needs to be a healthy discontent for the present to break a cycle.
If the profession was more ambitious and was REALLY interested in the success of their clients then it wouldn’t be so apathetic.
That’s my rant for the day!
The tables below are a summary of the Australian and New Zealand samples. Full report available here.
There are many forces outside of your control that are affecting the profession. You can’t stop them so you might as well embrace them. There is no time stamp (like Y2K all those years ago) when you need to be ready for the changes. They’re just happening around you.
You are only going to change if you’re motivated to change. If you break the word ‘motivation’ down and modify it slightly you get ‘motive-action’. What is your motive for action?
I believe in 5 things with the Accounting profession:
- I believe that Accountants are the natural and trusted financial advisers.
- I believe that Accountants that add value do not earn enough for how smart they are.
- I believe that Accountants can make a massive difference to their clients’ financial condition.
- I believe that ‘cloud’ technology is not a fad and it will fundamentally change the way you operate.
- I believe that clients want a Real Time Accountant not a Redundant Data Accountant.
Maybe there is something in my 5 beliefs that inspires you to make some changes. Maybe in my 5 you can find your motive for action.
The vast majority of Accountants I meet are offering ‘Redundant Data’ services. Clients don’t want services that are late. They want ‘Real Time’ services that are on time, relevant and pre-emptive.
Where is the value offering advice that is late? Picture the scene. You are doing your clients annual Accounting and you spot some anomalies or issues in the previous year. You finish off the work and then write a letter to the client explaining what they should do to fix it!
What they should do! Seriously, it’s typically too late.
I know you have a duty of care to tell the client the issue – and you did that. Well done. But it’s still late.
With today’s accounting technology (on the internet) you can know what is going on all the time. You don’t need to know all the detail just enough to spot issues and opportunities. Your clients are not Accountants and you have an uncanny knack of seeing financial data and making it make sense to them.
You can even have the data consolidated into single ‘dashboards’ so you can get a summary of all your clients affairs on one page. Then the technology can alert you to the good and the bad issues only. With this sort of technology you can pre-empt issues and advise the clients accordingly. Now that’s adding value.
It’s all about becoming a Real Time Accountant not a Redundant Data Accountant. It’s all about being Proactive and not reactive. Real Time Accountants’ behave differently and they are much much more client focused. It’s your choice to become a Real Time Accountant or remain a Redundant Data Accountant. The future of the profession is Real Time!
I hear excuses all the time about ‘time’. ‘I didn’t have time to do it’ or ‘time got the better of me‘ or ‘I ran out of time‘ are some of the more common ones. Blah blah blah.
What a crock! We’re all granted with the same 86,400 seconds in a day and 168 hours in a week. Not one more not one less.
You can’t manage time you can only utilize time in the best possible way. So it’s not how much time we have but how we use our time. You see it’s never about ‘the time’ it is always about the priorities at the moment. Have you ever noticed that when you’re about to go on holidays you are super efficient. Stuff just get’s done. Have you noticed when you don’t have a pressing deadline you sort of meander through the day?
It’s just human nature to ‘fill the available time with what work we have to do’. The old adage if you want something done give it to a busy person is so true. I recognized many years ago I needed to develop systems to stop wasting time and be super efficient with my time. Here are my top 19 ways to be super efficient and get more done in my valuable time available.
- I define my top 3 things that are the highest dollar productive activities and just do those
- I think of my week as 14 halves and block time out for 3-4 hours at a time
- It’s my diary (no one else’s) so I manage it – I block time out for holidays, trips, conferences, golf etc 12 months in advance and work around that. I do not let people encroach on my time when I don’t want them to. My assistant manages my diary but there are rules
- I get rid of toxic relationships – massive time and energy wasters
- I work to feel good about myself – health, fitness, clothing – makes me more efficient
- I deal with emails quickly – no scroll bar and everything replied to same day
- I turn off all email/text/Facebook reminders – the annoying buzz or sound that tells you something has arrived. I am not going to let a device tell me when to look at it
- I don’t return phone calls and play telephone tag – what a waste of time
- I book telephone appointments with almost everyone
- I always always call the person at the allotted time booked – back to no. 3 – no one is good as me. Someone said to me yesterday “I could set my clock to your call”
- I have phone meetings before face to face meetings – I am not going to do a face to face for 1 hour when 15 mins on the phone might have done
- I do stand up meetings – people get too comfortable sitting down
- I have a meeting agenda for every meeting – typically starting with ‘what would you like to achieve out of today’s meeting
- I tell them (clients/team etc) what they need to know not everything I know – when the agenda is complete it’s complete. Meeting over.
- I qualify prospects / alliances and other relationships on the phone first before meetings
- I use a driver service, airport lounges (eat before getting on plane) and Dictaphone technology
- I do not do administration work or anything else that is not within my top 3 (point 1)
- I focus on one thing at a time – multitasking is a load of rubbish
- I have self imposed deadlines on everything. Always working towards a finite time for the task.
And in case you are wondering I write every word of this blog. I write every presentation slide and every word in a book/report/article. Leveraged marketing falls into one of my top 3 highest dollar productive activities.
The video below sums up how I feel about time.
Disruptive area # 3 – Clients are using the internet for your advice
It seems we use the internet everything we need to know!
Addresses/ companies / people / products/ concerts / store opening times / weather / golf handicap / cycling routes / friends whereabouts (or what they are eating – yuk) and the BIG one…‘how to do’ everything. The internet seems to be our first port of call for anything we want to know or find information on.
Whatever happened to the Yellow Pages, asking people personally, the Encyclopedia Britannica or a Catalogue? All (or nearly) GONE!
Social behaviour is indicating we need(?) to be connected to our device. And the device rules supreme. A few weeks back I was at an airport lounge and my travelling companions had a ‘device bag’ full of connected gadgets.
The world is connected and it is getting more connected every day. Currently we go to our device (pick up a phone or tablet) and tap in the requested search. We can also talk to our device (the annoying Siri in the iPhone as a good example) and she/he can help us. Or talk to our car and another annoying voice (but very proper diction) will give us directions to your destination.
Does this give us an enhanced human experience? Probably not. But it sure is efficient.
Mobile technology is booming. It’s what consumers want. They want information at their fingertips. Tap tap tap and hey presto – I have the answer and now I am an expert.
And that is an issue for anyone in the advice business. AKA Accountants!
Let’s say I wanted to learn about borrowing money through my pension scheme to buy a property. I could ‘Google’ that and find the answer in a few seconds. What if I wanted to work out how to improve the profit of my Winemaking business? I could go to a LinkedIN group and discuss that and get an answer. What if I needed a payroll or tax question answered? I can search it and go directly to the government portal and get the answer.
Uncle/Aunty Google has all the answers it seems.
The IBM super computer ‘Watson’ is an extraordinary piece of engineering. It can beat humans (really smart ones) at Chess and Jeopardy (proven) and ‘some say’ he/she is so smart he knows what the President of any country will say next! OK…I made the last bit up.
You get the idea. Watson is a supersmart supercomputer.
IBM have announced this year (2014) to >$1BN investment to develop Watson into a usable resource. There are >2,000 people in the Watson team and their job is to enable Watson into the world. One of the cool ideas is to create ‘Watson for business.’ Think of it as ‘Siri’ (iPhone fame) for business. You have a business question, talk to the device and it gives you the answer. BOOM. Great for the user – not so great for you.
You see, Watson is a sponge like a human. It can absorb / disseminate / translate / organize/ conceptualize any information and then send it back in a usable format. Pretty much all of the worlds ‘texts’ (as in manuals, books and all forms of content) are accessible on the internet. But the internet is a bit of a mess. There is a lot of content to absorb and disseminate. Watson can do sort it out and give it back to you in a usable format.
I got interested in Watson a few months back by the following line in a newsletter I received…
“This is the start of the end of professional services as we currently know it”
WOW. WOW and more WOW!
Does that mean the super computer can replace the Adviser? For repetitive and systematic information absolutely YES. And there will be ‘an app for that’ very soon.
I don’t mean to scare you but I do. This is real and it is happening right now and the Accounting profession is in the firing line for massive disruption. Without notice and appropriate action these 3 ‘disrupters’ have the capacity to wipe out a (BIG) chunk of revenue / profit / business value in the profession….QUICKLY.