I certainly kicked off a storm of comment when I suggested that companies should sack their accountants if they were not contributing to their business growth. (Clients Should Sack Their Clients [mysteriously withdrawn on AccountingWeb and then brought back])
I would now like to explain my thinking behind the remark.
There is only one direction for successful companies – and that’s forward.
It’s why start-ups often succeed at first – they are focused on their future, on their destination – and it’s also why so many companies stall after a few years, losing their momentum, and focusing on the past (“Business was really good a few years ago”) more than the future.
That’s why all companies, especially owner-manager businesses, need help to maintain a forward direction and focus.
So the question is this:
How many accountants really help their clients grow their businesses?
The answer, of course, is that some do and some don’t, but why is that?
I believe the answer is very clear: there are essentially two very different sorts of accountancy firm.
Which one are you?
Accountant Historians: as their name suggests, AH’s are focused on the past, on analysing it, preserving it, but what do they then do with that information? Often, very little. When asked by clients what the figures might mean for the future, they don’t feel comfortable making predictions – and rightly so. In truth, they know very little about their clients’ businesses.
To be fair, that works for many companies – and many firms of accountants. It’s horses for courses, but the fact is that clients tend to hold AH’s in comparatively low esteem. They want to minimise costs, so HA’s get paid less. What’s worse, the AH service is commoditised – “anybody can do that” think the clients, so will go to a cheaper competitor. Not only do AH’s, therefore, earn less, their clients churn more rapidly, and they have to spend more time and money winning replacement clients.
It’s all about the lifetime value of clients: the ideal is long staying, high spending clients, and the nightmare low paying, short staying clients.
Accountant Entrepreneurs: a very different kettle of fish with very different attitudes towards the contribution they can make to their clients’ businesses. They do the basics as well as anybody else, but they know information is power, and use it to help their clients – and earn themselves higher revenues. They use their knowledge of many companies to provide a real world, really current perspective for clients. They know what has worked for other companies – and what hasn’t. They earn the respect – and the fees – accordingly.
They earn more, and keep their clients longer, so the average lifetime value of their clients is considerably more than the AH’s. They also get new business opportunities, and tend to be retained even when companies really take off.
So are some people born AH’s and others AE’s? Absolutely not. It is a matter of attitude, of a little training, some practice, and the enthusiasm born out of successful attempts to change the way you approach clients.
Related Articles
28 comments:
Thanks for the part 2, Robert. Problem is, most accountants are so bogged down doing low value work for clients that they believe they don't have time to talk with them about the things that are truly important. I spoke with an accountant just this morning in Sydney who told me that after a recent discussion I had with him, he called two of his best clients and organised meetings with them (no charge) to talk about their goals and objectives. Both clients were delighted and were happy to invest in the accountant facilitating a planning session with them. As I said in my post on your original blog on this issue, if accountants stop trying to sell and start focusing on helping their clients the relationship will be exponentially improved.
#accountants which one are you? RT @ThisIsSethsBlog Seth's Blog: Perfect vs. interesting http://bit.ly/hlF7D6
Thought For The Day
"If you don't like something change it; if you can't change it, change the way you think about it." Mary Engelbreit
Colin
Thanks for your comments.
As discussed elsewhere, these are sweeping generalisations (based on/copied from the interview with Mark Lee...
Should Clients Sack Their Accountants? - interview with Mark Lee (AccountingWeb) following on from the Steve Pipe article... http://www.accountingweb.co.uk/topic/practice/should-clients-sack-their-accountants/488346
Of course the article contains huge sweeping generalisations and of course it is unfair to polarise an entire industry. However the use of the two extremes gets us to think about where one might stand along the continuum. And as other commentators have noted, this isn't an accountant specific polarisation. The same is broadly true for most professional service firms. Enough!
Spot on, nail on the head, and bulls eye.
RC is correctly seeing an opportunity in the marketplace for 'modernisation' or enlightenment.
I urge all accountants to 'seize the day' and go with RC's flow.
The world is changing fast, and it helps to know which direction to go.
Stick close to RC and ride the crest of the wave!
And if you, after all that, you need the odd additional client, please feel free to contact www.accountantnow.co.uk
see
Contractor accountants could be in demand this year
http://www.contractoraccountants.com/2011/03/24/contractor-accountants-could-be-in-demand-this-year/
quoting Robert Craven
How to tell if your accountant is a crook http://is.gd/swVscn
http://www.openforum.com/idea-hub/topics/money/article/how-to-tell-if-your-accountant-is-a-crook-mike-periu
Accountants - do you think it is time to stop accountant bashing! http://t.co/TpOxUKg
Ant,
On Robert's behalf I will copy and paste from earlier on...
"Of course the article contains huge sweeping generalisations and of course it is unfair to polarise an entire industry. However the use of the two extremes gets us to think about where one might stand along the continuum.
And as other commentators have noted, this isn't an accountant specific polarisation. The same is broadly true for most professional service firms. Enough!"
Julian Rowe describes my position pretty well.
There is an opportunity out there for some accountants who feel that they wish to pursue it.
I am not advocating a one-size-fits-all universal antedote even if the soundbites and various misquotes make it appear that I am.
RC
Don't see the problem. Every industry has better and worse performers. Professional serice firms are no different. So why all the wringing of hands? They do protest too much I suspect.
Thought for the Day
Don't Be Nice; Be Helpful
http://blogs.hbr.org/bregman/2011/03/dont-be-nice-be-helpful.html
dfg
Interesting viewpoint, but leaves me high and dry. I need an AE, apparently, but I know they don't appear in Yellow Pages. If I Google the phrase I get lots of accountants telling me what they do but I haven't seen anything matching what the article is describing.
So, how do I find a good AE?
Ken
There is a third way..........
Robert
I think you have made some good points. In my view accountants whose business model is the sausage machine of accounts and tax returns are in danger of developing a mindset that is not conducive to giving advice.
Mark Lee recently posted an article on Business Zone's sister site Accounting Web - Call yourself a business advisor? Whilst I am firmly of the view that businesses can benefit from advice from the right accountant, it is also apparent from the responses to Mark's article that many clients don't want advice or are not prepared to pay for it.
So for the client to benefit (and hopefully prosper) both the client and the accountant need to have the appropriate mindset. Conversely the appropriate fit for the less ambitious businesses will be the AH (although I would suggest those businesses are less likely to succeed)
Some accountants refer to themselves as "business advisors". I would suggest that clients make sure they understand the limitations of the advice (how many accountants are able to give quality sales, marketing or HR advice) and not assume that the accountant is a one stop shop.
Accountancy can cover a broad spectrum well beyond preparing accounts and tax returns, eg: raising finance, business acquisitions, identifying opportunities for improvements in profits or cash flow or improving financial control. A good (say) tax accountant may or may not be good at dealing with other requirements.
I am a Chartered Accountant who helps businesses improve their financial management and control and can also provide an overseeing service. Whilst I have some knowledge of taxation, I feel that it is not sufficiently comprehensive to provide a quality service to clients. Yesterday I met up with a new client for an initial meeting and said I would put them in touch with another accountant who will deal with the tax side. Sadly some accountants will not even refer clients to partners in their own firms, let alone someone from outside the firm - where this happens it is likely to mean that the accountant will stick to his/her comfort zones and that the client doesn't receive the best support and advice!
So regarding the decision to sack or not sack the accountant, there could in some circumstances be another course of action - bring in another accountant with complimentary skills!!
David Lewis
www.camroseconsulting.co.uk
AE .... in Carlisle... you have to be kidding!
Well... from the isolated North West Frontier the distinction seems a little surreal. I thought I was doing well to even hook up with an accountant. Who's got any AE recommendations for a new business in Carlisle? I'm trying to get through to Carlisle business owners how important it is to get their websites and directory listings working for them. Seems they are frequently stuck in a marketing timeslip! Or maybe it's just me! It'd be good to hear from any Cumbrian / Carlislian business owners who have got an accountant that is pro active and forwards looking.
All the best,
Ray, Consulting Carlisle ltd
Accountant Entrepreneurs
Hi
We are a firm of Chartered Accountants and Business Advisers that believe very much in helping clients' to grow their businesses if that is what they feel they need.
We're also big believers that as their business is often linked very closely to their personal income, helping them to think about their personal financial situation is a key part of their business development too.
Take a look around our website and feel free to call us if you feel that we match what you're looking for.
Marcia Clarke
www.virtualfd.co.uk
Accountants - You are fired!
Spot on Robert. I have been going on about this for 30 years! As a chartered accountant with both professional practice and commercial experience in the '80s I offered a service to local accountancy firms to provide strategic management, business planning, budgeting and management accounting advice, on their behalf, to their clients. It was clear to me that there was a need for this for (some) SME clients and an opportunity for smaller practices to offer a more comprehensive and useful service, thus helping them to retain their better / growing clients and increase their fee base.
Needless to say, with a very few exceptions, I was met with a stubborn, conservative, "we know best" response from most firms I approached.
Having now sold my own businesses, I decided to explore this market again, thinking that things may have changed. Only a little! There are plenty of firms whose websites mention management type services and support, but a closer look at what they are actually providing still throws up so called management accounts which consist of quarterly summarised P&Ls and Balance Sheets, in the same format as year end accounts, with no budget comparisons and no detailed analysis or forward projections, let alone strategic plans.
Again, my experiences may not be truly representative and I can only hope that the numerous articles and courses pushing practices to widen their offering will change attitudes, for the sake of the profession, SMEs and the economy as a whole.
Carl Hotson
carlhotson@planforsuccess.co.uk
Well said David
And thanks for the namecheck ;-)
Your post certainly got me thinking.
I've long been writing, speaking and advising businesses that NOT ALL ACCOUNTANTS are the same. Plenty of Robert's generalisations are fair. But the bottom line is that there is no standard set of services, background, experience or approach adopted by all accountants. This shouldn't be a surprise as the UK has over a dozen different professional bodies for accountants. Also ANYONE can call themselves an acocuntant - you don't need to be professionally qualified to do so.
Todate I've shared this view in the context of general accountancy services. I have noted that some, but not all, accountants are willing, able and experienced enough to provide business advice. But I admit I haven't previously considered what this (business advice) might look like. Is it restricted to financial matters and forward looking rather than the more standard backwards looking accounts and tax returns? Does it extend to marketing, sales, social media, HR, IT or any of the many other topics that business owners need to understand if not master or delegate to secure success?
I suspect I will write further about this on my blog for ambitious professionals.
Mark
Feedback re accountants
Thanks for your comments to date.
A read through comments to my earlier blogs about accountants evoke two basic and polar responses:
1) "spot on"
or
2) "come the revolution we will put yu up against the wall first".
Not sure where the extreme hostility has come from, or rather, why it is so intense. Every industry has some kind of bell-curve from the dreadful to the wonderful. In accounting it is no different. Or like male drivers do they all believe that they are "all above average". Secondly we can, to a large degree swap the word accountant with most professional service firms (lawyers, architects, surveyors) or most service firms...
Do keep your coments coming
Robert
PS Minor plug - on the back of the original work we will be running a one day "challenge" programme for accountants
Horses for courses
I am inclined to agree with the initial post, there are many accountants who focus just on compliance based work and are happy to do so. If it keeps paying the bills and that's their expertise, then why not?
If a client wants more from their accountant, surely they will consider moving or bringing in an additional advisor?
I think it also depends on the clients. Some of my clients "just want the job doing", i.e. the relevant accounts prepared or tax return submitted and are not looking to grow or develop particularly, just happy maintaining the status quo.
I have other clients, some of whom are at the early stages of their business to whom I offer a range of other advice/service, whilst remaining in my knowledge areas, e.g. I offer a business plan review service, assistance with the preparation of budgets etc for forward planning. Clients ask me to review their websites (I'm no web developer, but like to think I can offer a valid opinion from a consumer perspective for example), and for those clients with little/no knowledge of internet marketing, I have a little knowledge in this area from my own experiences. Where things start to go out of my area of expertise/knowledge, I will happily refer clients to another advisor so that they can get the best possible advice for their situation.
Cara
So true.....
One of the companies I run offers services such as web design and eCommerce and we struggled to find an accountant who could understand the industry and get to grips with things such as paypal, affiliate revenues and so on. After a couple of years we did actually find a decent firm who had alot more about them and always kept in touch via phone and email with regular news updates/news letters. They also got to grips with the transactions and re-curring billing that we were doing but still to this day don't totally understand everything we do.
The web is a a strange place and to this day I have not heard of an accountant that is internet friendly, same goes with the bank too, they do not have a clue!
dijitul
Tax planning is really very important for any businessman. And your post is very helpful to any tax planning.Contractor Accountant
Dawn of the #Accountant #Adviser http://bit.ly/ka9Koh
A bit clinical, type A or type B, but in general you are correct
I help companies survive, I help them develop efficiencies to equilibrium, I help them develop competitive edge ... and I help them to grow ... at cost effective pricing. See our web site ... www.elliscpafirm.com ...
So, tell me how to get the word out. We have a national firm but in order to grow we have to rely on referrals, or we have to get the ear of CEO's. How do we get to CEO's?
What I think you are after is more than a chat on a blog. Suggest you take professional advice from a local expert...
Funnily enough the new book (out in October) would be right up your street.
RC
As a start take a look at the entries at
http://robert-craven.blogspot.com/2011/03/accountants-and-professional-service.html
RC
Post a Comment