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Your Blueprint For A Better Accountancy PracticeThe key research-proven things that every practice that really cares about its clients, reputation and future must do
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Yourblueprintforabetteraccountancypractice
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Your blueprint for
a better accountancy practice
Thekeyresearch‐proventhingsthateverypractice
thatcaresaboutitsclients,reputationandfuture
mustdo
Writtenby:
SusanClegg,StevePipeFCAandMarkWickershamFCA
ForewordBy:
MarkLloydbottomFCA
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
Your blueprint for a better accountancy practice
The key research-proven things that every practice that really cares about its clients,
reputation and future must do
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page2
ForewordbyMarkLloydbottom
EarlierthisyearIwasoneoftheauthorsoftheWhitePaper:ThebiggestchallengesfacingtheUK
accountancyprofessionoverthenextfiveyears.Basedonresponsesfrom108accountants,itasked
themtoidentifytheirbiggestconcerns.Theresultsprovideinterestingreading.
Thefivegreatestperceivedchallengeswere:
1. Notenoughoftherightsortofclients
2. Thedifficultyofchargingpricesthatreflectthequalityoftheworkyoudo
3. Externalthreats
4. Gettingnewclients
5. Finding,keepingandmotivatingtherightteam
Whetherornottheseareyourowntopfivechallenges,Ithinkyou’llagreethatthesearebigissues
forallaccountantsinpracticeandthatthewayyouapproachthemwillhaveasignificantimpacton
yourresults(andalsoonhowmuchyouandyourteamenjoygoingtoworkinthemorning).
TheBlueprintForABetterAccountancyPracticepicksupwheretheWhitePaperleftoffandlooksat
howyoucanstartaddressingeachofthesechallengesbygivingbetterservice,implementingbetter
systems,makingbetterpricingdecisionsandcreatingbetterteamengagement.
Italsoshowsyouwhatsomeofthemostsuccessfulaccountancyfirmsaredoingintheseareasto
getoutstandingresults,andsetsoutanactionplansothatyoucanreplicatetheirsuccess.
Someofitsfindingsareexciting,othersareshocking.Butallofthemareextremelyuseful.
AschairmanoftheAccountantsClubIamdedicatedtohelpingaccountantsservetheirclientsbetter
whiledevelopingprofitable,rewardingandenjoyablepracticesforthemselvesandtheirteam.This
reportisahugehelpingettingthatprocessstarted.
MarkLloydbottomFCA
Chairman
TheAccountantsClub
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Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
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Tableofcontents
Foreword 2
Executivesummary 4
Animportantnoteaboutterminology 6
Betterservice 8
The£1.8billioncostoffailure 18
Bettersystems 19
Betterpricing 33
Betterteamengagement 47
Animpassionedpleatotheprofession 60
Appendix1–Whitepaper:Thebiggestchallengesfacingthe 63
accountancyprofessionoverthenextfiveyears
Appendix2–HowUKaccountantsarereallyperforming 79
Appendix3–Exampleofastandardmeetingagenda 80
Appendix4–Referencesandfurtherreading 83
Appendix5–Suggestedactionplan 84
Appendix6–Freeresourcesthatcanhelp 91
Appendix7–Completesurveyresults 93
Acknowledgements
Wewouldliketothankallthefirmsthatparticipatedinthesurvey–all156ofyou.Withoutyouthis
ResearchReportwouldnotbepossible.
Wewouldalsoliketothankthecasestudyfirmsthatcontributedsoopenlysothatwecanalllearn
fromtheirsuccess.
AndthanksalsotoStevenBaldwinforallhishelpincompilingthegraphsandstatistics.
Copyright©2011ExpertClubsLLPandtheauthors
Allrightsreserved.Nopartofthispublicationmaybereproduced,ortransmittedinanyformorbyanymeansand
thefindingscontainedwiththisreportcannotbesharedwithanyotherpractice,networkororganisationwithout
priorwrittenpermission.
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Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
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Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page4
Executivesummary
Inthesummerof2011,independentaccountancyfirmswhohadattendedtheNationalAccountants
ConferenceinBirminghamcompletedadetailedsurvey.
The156firmsamplewasrepresentativeofthevastmajorityoftheprofession,beingmadeupof:
72solepractitioners
43twopartner/directorfirms
28firmswith3‐5partners/directors,and
13withsixormorepartners/directors
Theaimofthesurveywastwo‐fold:toidentifybestpractice,andtoseewhichaspectsofbest
practicemakethebiggestcontributiontothesuccessofaccountancyfirmsacrosstheworld.Whilst
thesurveywascarriedoutwithUKpractitioners,wehavenoreasontobelievethattheessenceof
itsfindingswillnotapplyequallyineveryothercountrytoo.
Byanystandards,theresultswerebothstrikingandprofoundlyimportant.
Forthefirsttimeresearchrevealsthatwehaveatwotrackprofession,consistingof“Stars”and
“Laggards”.
Starfirms:
Consistentlygrowat20%ormoreayear
Havebetterclientbasesand‘lockup’
Deliverbetterclientservice
Feellessthreatenedbycheapaccountants
Aregenerallyhappierwiththeirsuccessandresults
FortheLaggardfirmsandtheirclients,ontheotherhand,thepictureisverydifferent.
Furtherevidence,ifneeded,comesfromananalysisofkeypracticedatasuppliedbythe
AccountantsClub’sBenchMarksoftware.Whenfirmsarecomparedacrosskeymetrics,itisclear
thatthereisahugegulfbetweentheperformanceoftheupperandlowerquartiles(seeAppendix
2).
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ThisreportpresentstheevidenceforwhateverypracticeneedstodotobecomeandremainaStar.
Thekeyfindingscanbeclassifiedintothefollowingcategoriesthatmakeupthemainsectionsofthis
report:
Betterservice
Bettersystems
Betterpricing
Betterteamengagement
Wehopeithelpsyoutomakeyourpracticebetterthaneverbefore.
Andwealsohopethatithelpstoraisethestandardsandreputationoftheprofessionforthegood
ofclients,teammembers,practitioners,theirlovedones,theeconomyandsocietyasawhole.
SusanClegg StevePipeFCA MarkWickershamFCA
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Animportantnoteaboutterminology
Wehaveusedtheterms“Stars”and“Laggards”asshorthand,andtheyarenotintendedtobe
judgementalorpejorative.
Therewillundoubtedlybemanyexcellentfirmsamongstthe“Laggards”,andperhapsalsosome
amongstthe“Stars”wheretrueexcellenceisstillaworkinprogress.
Thetermssimplyrelatetotheresultsthetwotypesoffirmsareexperiencing:whiletheStarsare
enjoyingoutstandingresults,theLaggards’resultsarelaggingbehind.Andoftenalongwaybehind.
Webelieve,however,thatthisreportwillhelptoclosethegapandensureabetterfutureforthe
entireprofession.
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
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What“Star”firmsachieve
Ofthe156firmsthatparticipatedinthesurvey,43wereStars(Note1).
Intermsofsize,theStarsareprobablyveryrepresentativeoftheprofessionasawhole,beingmade
upof:
27solepractitioners
12withtwopartners/directors
1with3‐5partners/directors,and
3withsixormorepartners
ThekeyachievementsoftheseStarsarethatthey:
Areallgrowingat20%ormoreayear–incontrast,noneoftheLaggardsweregrowingthat
quickly
Havebetterclientbasesandfeelmuchlessthreatenedbycheapaccountants–only7%of
Starsareworriedbythethreatfromunqualifiedandcheapaccountants,comparedto25%of
Laggards
Delivermuchbetterclientservice–33%ofStarsbelievethattheyareasproactiveasthey
shouldbe,comparedtoonly12%ofLaggards
Havebetter‘lockup’–74%ofStarswantedtoreducetheir‘lockup’(i.e.workinprogress+
debtors),comparedto84%ofLaggards
Aregenerallymuchhappierwiththeirsuccessandresults–30%oftheStarsareassuccessful
astheywanttobe,comparedtoonly8%oftheLaggards
TherestofthisreportexplainshowtheStarsachievethoseresults.
Note1 Whilst27%ofthefirmsinoursurveywereStars,wesuspectthattheequivalent%fortheprofession
asawholewouldbesomewhatlower.Thisisbecauseeveryfirminthesurveyhadattendedthe
NationalAccountantsConference,andithasbeensuggestedthatassuchtheyarelikelytobe
somewhat“aboveaverage”inthattheyrepresentthatpartoftheprofessionthatismosthungryfor
newknowledge,newideasandnewwaysofdoingthings.
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Betterservice
91%ofallaccountantsacknowledgetheneedtoimproveservicelevels.Interestinglythispercentage
wasidenticalforbothStarsandLaggards.
Figure1
However,drillingdowntothesupportingdatasuggeststhat,whileservicelevelsacrossthe
professionasawholearenothighenough,Starsdoseemtotakeservicemoreseriouslythan
Laggards,anddoseemtobejudgingthemselvesagainstahighersetofstandards.
Starfirmssystematicallyaskclientswhatserviceexcellencelookslike
35%ofStarshavesystematicallyaskedatleastthetophalfoftheirclients(eitheronaone‐to‐one
basisorviaafirm‐widesurvey)whattheyregardasexcellentservice.Incontrastonly26%of
Laggardshaddonethis.
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Figure2
Itistheclient’sdefinitionofserviceexcellencethatcounts,notthepractitioners.So,ifyoudon’task
clientsthereisabiggerriskthatyougetitwrongandfocusyourenergiesinthewrongdirection.
Casestudy:RussellPayne&Co–askingclientstoratetheirservices
RussellPayneisaLincolnshire‐basedsolepractitioner.Everymonththefirmsendseveryclienta
simple‘trafficlight’styleemailthatasksthemtoclickononeofthreetrafficlightcolours:
Redmeans“IhaveaproblemandthereissomethingIwouldliketotalktoyouaboutstraight
away”
Ambermeans“Ihaveaminorissuewithyourserviceandwouldappreciateacall”
Greenmeans“Iamhappyandnocurrentissues,butthanksforaskinganyway”
Notonlyhavetheyinvestedindevelopingthetechnologytoautomatetheprocessofsendingout
theemailsandinstantlyprocessingthereplies(www.trafficlightfeedback.co.uk);buttheyhavealso
investedtimeandmoneyincreatingawatertightsystemforensuringthateverysingleamberand
redreplyisfollowedupinatimelyfashion.Theythenreportallofthekeyfindingstotheentire
teameverymonth,sothateveryoneunderstandstherealityoftheircurrentserviceperformance
andiscontinuouslyfocussedonmakingitbetterandbetter.
AsRussellexplains:“Therearesomanyadvantagestomeasuringserviceperformanceinthisway.
Firstly,sinceitonlytakesafewsecondsforanyonetorespond,averyhighproportionofclientsdo
actuallyrespond,whichwasrarelythecasewiththeotherfeedbacksystemswe’vetried.”
“Secondly,whereaclientisunhappyitgivesusthechancetonipthingsinthebudbeforetheyget
outofhand.Thirdly,quiteoftentheprocessgetsclientstalkingtousaboutadditionalservicesthat
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theygoontobuyfromus.Soitnotonlyhelpsustokeepclients,butitalsohelpsustoearnbigger
feesfromthem.”
“Andfinally,itgivesusanobjectiveyardsticktomeasureourselvesagainst,whichinturnmeanswe
areabletocontinuallychallengeourselvestoprovideevenbetterservice.”
Keythought: Whatsystemsdoyouusetoensurethatyouunderstandwhatyourclientsregard
asserviceexcellence,andareactuallydeliveringittothem?
Which3actionswillyoutaketomakesureyouunderstandwhatkindofserviceyourclientswant
fromyou?
1.
2.
3.
Starfirmsaremoreproactive
33%ofStarfirmsbelievethattheyareasproactiveastheyshouldbe,comparedtoonly12%of
LaggardsasFigure3shows.
Figure3
Giventhatotherresearchsuggeststhatclientsregard“beingproactive”asthesinglemostimportant
aspectofserviceexcellence,boththesefiguresareextremelydisappointing.Andclearlythereisa
greatdealmoretheentireprofessionneedstodointhisrespect.
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ButitisalsoclearthatStarfirmshavebeenbetteratrisingtothechallengeofbeingproactive–and,
giventheparamountimportancethatclientsplaceonproactivity,itseemslikelythatthisisoneof
themainreasonswhytheStarfirmsgetsuchgoodresults.
Casestudy:SobellRhodes–Beingmoreproactive
SobellRhodesisalongestablishedandstillrapidlygrowing6‐partnerfirmbasedinPinnerandthe
WestEndofLondonthatwasrecentlynamedastheAccountancyAgeMediumSizeFirmofTheYear
andas2020’sMostInnovativeLargeAccountancyFirm.
Thefirmisacutelyawareoftwomajorresearchfindings.Firstlythatclientswanttheiraccountants
tobemoreproactive.Andsecondlythatclientshatesurprisebills.SoSobellRhodesnow
systematicallylooksforwaystomakepreliminaryrecommendationstoclients(ie.recommendations
thatcanhelptheclientsavetax,improvecashfloworinsomeotherwaysolveaproblemormake
themostofanopportunity)withoutchargingforthosepreliminaryrecommendations.
Whattheyhavefoundisthat,iftheirpreliminaryrecommendationsaregood,clientswilldooneof
twothings:eithersaythankyou,orsay“that’sinteresting,canyouhelpmeimplementthatidea?”
Theformerisagoodresult.Butthelatterisevenbetter,sincetheclientisactuallyaskingtobuy
somefurtherhelp,andallthepracticehastodoisagreethepriceandtermsfordoingthatextra
work.
Oneofthespecificwaystheymakethesepreliminaryrecommendationsisbyautomatically
producingaBenchmarkingreportandaKeyImprovementPossibilitiesreportforeachclient,and
discussingtheseattheannualaccountsfinalisationmeeting.Thelatterreportusuallycoversarange
ofideasandrelatedpreliminaryrecommendationsto:
improveprofitsandcashflowbasedonthebenchmarkingfindings
savetax
protectfamilyassetsandwealth.
improvepersonalwealth
structureborrowingsmoreefficiently,and
planforeventualexit,andperhapsalsoretirement
Keythoughts: Inwhatwaysisyourfirmproactive?Whatsystemsdoyouhaveinplaceto
ensurethatyoureallyareproactivewitheverysingleclient,everysingleyear?
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Which3actionswillyoutaketomakeyourfirmmoreproactive?
1.
2.
3.
Starfirmsdon’tassume
Todelvealittledeeperintotherealityof“beingproactive”intheprofessionthesurveyalsoasked
thisverytellingquestion:
“Isitacceptableforanaccountanttoknowaboutataxplanningideathatcouldsaveaclientagreat
dealofmoney,butnottelltheclientaboutitbecause(a)Theyassumetheclientwon’tbeinterested,
(b)Theydon’thavethetimetotelltheclient,or(c)Theyhavethetime,butcan’tbebotheredtotell
theclient?”
Figure4:%whothinkitisacceptableforanaccountanttoknowaboutataxplanningideathatcouldsaveaclienta
greatdealofmoneybutnottelltheclientforthereasonsabove
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Encouraginglytherewasalmostuniversalacceptancethatitisneveracceptabletoletaclientdown
inthiswaybecausethepractitionerdoesnothavethetimeorcannotbebothered.Anditis
reassuringtoseethattheentireprofessionrecognisesthatnothavingthetimeortheinclinationare
neveracceptablereasonsforalackofproactivity.
Alarmingly,however,5%oftheLaggardfirmsfeltthatitwasacceptableforthepractitionerto
assumethatclientswouldnotbeinterestedintaxplanningideasthatcouldsavethemagreatdeal
ofmoney,andthereforenottobothertolettheclientmakeuptheirownmindonthematter.
Clearlythiskindofarrogant“Iknowbest”attitudeisanathematothevastmajorityofdecent
professionals.Andwhilstitisobviouslyworryingthatitispresentanywhere,atleasttheresearch
suggeststhatthemarketispunishingthefirmsinquestionwithLaggardresults.
Starfirmsguaranteetheirwork
Thereisbroadparitybetweenthewillingnessofbothsectionsoftheprofessiontogiveturnaround
guarantees(e.g.“Weguaranteetoturnyouraccountsaroundin30daysoryoudon’tpay”).As
Figure5shows20%ofthetotalfeesearnedbyStarfirmsarecoveredbythiskindofguarantee,
comparedto17%ofthetotalfeesearnedbyLaggards.
Figure5
Butwhenitcomestoofferingsatisfactionguarantees(e.g.iftheclientisn’thappy,theydon’thave
topay,orcanpaywhattheythinkitisworth),thereisabigdifference.TheStarfirmsareconfident
enoughintheirservicedeliverytoguarantee36%ofthetotalfeestheyearninthisway,whereasfor
Laggardsthefigureisonly25%.
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Forsomefirmsthecombinationofturnaroundandsatisfactionguaranteesisoneofthekeystotheir
success.Forexample,Devon‐basedbusinessVision,whichincreaseditsprofitsby64.9%intheyear
toJune2010,attributesmuchofitssuccesstothefactthat“Turnaroundtimesareguaranteed,such
as20workingdaysforaccountsandsevendaysfortaxreturns,assumingnodelaysattheclient’s
end.Addedtothisisanoverallguaranteethatclientswillgetqualityandvaluethatmatchesthefee
theypay.Iftheydon’tthinkthisisthecase,they’reentitledtopayanyfeetheythinkisappropriate,
includingnothing.”
Keythought: Whattypeofguaranteescouldyouoffer?
Which3actionswillyoutaketomakeyourguaranteescompellingtoclientsandprospects?
1.
2.
3.
Starfirmsrespondmorerapidly
54%oftheannualaccountsproducedbyStarfirmsaredeliveredtoclientsinlessthan30daysof
receivingthenecessaryinformation.AtLaggardfirmsonly47%ofaccountsareturnedaroundthat
quickly.
Figure6
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Whilstnoteveryclientwillbeimpressedbyspeed,manywill.Formanyitisoneofthefewaspects
ofservicetheyareequippedtojudge–andsotheywillmentallyextrapolatefromwhattheyseeas
excellenceinthisareatoassumeexcellenceintheotherareasthatareharderforthemtojudge,
suchasthequalityofthetechnicalworkdone.
Keythought: Doyoumeasureyourspeedofresponse?Bymeasuringyourturnaroundtimes
youcansettargetsandfocusonimprovingthiskeyperformanceindicator.
Which3actionswillyoutaketoimproveyourresponsetimes?
1.
2.
3.
Starfirmsspotmoremistakes
Perhapsthemostdistressingfindingsintheentiresurveyarethestaggeringnumberofmistakesthe
professionseemstobemaking.
Firmswereasked,“Inwhat%ofnewclientsdoyoufindanerrororomissionmadebytheprevious
accountants?”
FoundbyStars FoundbyLaggards Foundoverall
Majorerror 19% 15% 16%
Minorerror 31% 29% 29%
Total 50% 44% 45%
Table1
FoundbyStars FoundbyLaggards Foundintotal
Majoromission 19% 14% 15%
Minoromission 30% 26% 27%
Totalomissions 49% 40% 42%
Table2
Nottoputtoofineapointonit:theseresultsareshocking!
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Accordingtotheirpeers,whoareafterallbestplacedtojudge,accountantsseemtobemaking
mistakesinhandlingtheaffairsofalmosthalfoftheirclients.Andmanyofthosemistakesappearto
beserious.
Forexample,respondentscitednotpreparingP11Ds,notclaimingallallowableexpenses,illegal
dividends,capitalallowancesnotclaimedproperlyoratall,notconsideringincorporation,not
extractingprofitstaxefficiently,notdealingwithassociatedcompanyissuesproperly,notdealing
properlywithoverdrawndirectorsloanaccounts,notreviewingtaxcrediteligibility,lackofIHT
planning,andnotclaimingR&Dtaxcredits.
Ofcourse,itcouldbethattheseerrorsandomissionsarethereasonwhytheclientsinquestion
switchedfromtheirformeraccountantstothefirmsinthesurvey.Butitdoesnotseemrealisticto
seektoexplaintheseresultsawaysoeasily.Therealityisthatmostoftheseerrorsandomissions
areverytechnicalandarethereforeunlikelytohavebeenspottedbytheclients,andaretherefore
alsounlikelytobethereasonwhytheyswitchedaccountants.
Inalllikelihood,theclientsswitchedbecauseofotheraspectsoftheserviceandvaluetheyreceived,
andthesetechnicalmistakeslayunnoticeduntilaftertheswitch.Andthatofcoursebegsthedeeply
disturbingquestion,aretheremistakeslyingunnoticedintheaffairsofhalfoftherestofthemillions
ofclientsservedbytheaccountancyprofession?
Theonerayofhope,however,isthatStarfirmsseemtobebetteratspottingmistakes.Andthatin
turnhastwopotentialimplicationsfortheservicelevelstheirclientsreceive:
Aswellasspottingmoremistakestheypresumablyalsocorrectmoremistakesfornewclients–
therebygeneratingbetterresultsforthosenewclients.
PresumablytheirsystemsforeliminatingmistakesarebetterthanthoseattheLaggardfirms.
Andpresumablythosesamesystemsarealsousedtoeliminatemistakeswithalltheirclients
beforeitistoolate.Asaresult,itseemslikelythattheyhandletheirclients’affairswithfewer
errorsandomissionsthantherestoftheprofession.
Forthegoodoftheprofessionasawhole,wehopethatthesefindingswillgalvanisepractitioners
everywheretoraisetheirstandardsandservetheirclientsinthewaytheydeserve.
Keythought: Whatsystemsdoyouhavetopreventerrorsandomissionsintheadviceand
supportyougivetoclients?
Which3actionswillyoutaketocompletelyeliminateerrorsandomissions?
1.
2.
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3.
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The£1.8billioncostoffailure
Alarmingly,thefindingsintheprevioussectionsuggestthatinadditiontotherebeingtwotypesof
accountants,therearealsotwotypesofclients:
1. Overlookedclients–Thesizeableminority(perhapsasmanyas40%)whoseaffairsarenot
givenenoughcare,attentiontodetailandproactivesupport,andasaresultaresuffering
theconsequencesofthemistakesandomissionsbeingmadebytheiraccountants;and
2. Valuedclients–Themorefortunatemajoritywhodoreceivetheservicetheydeserve.
ItistoosimplistictoassumethatalltheoverlookedclientsareservedbyLaggards,orthatallthe
valuedclientsareservedbyStars.Anecdotalevidencesuggeststhattherealityisfarmorecomplex
thanthat.
Forexample,wehaveseenmanyinstanceswherepartnerslavishoutstandingserviceonahandful
offavouredclients,whileatthesametimecuttingbudgetssodrasticallyontheaffairsofother
clientsthatserviceisinevitablycompromised.Asaresult,evenwithinfirmsitisoftenthecasethat
someclientsarevaluedwhileothersareoverlooked.
Regardlessofthefactorscausingit,however,whatistrulysoberingishowmuchthefailingsofthe
professioncouldbecostingoverlookedclients.Letuslookatthemaths…
…accordingtothelatestDepartmentforBusinessInnovationandSkillsdatatherearec.4.5million
privatesectorbusinessesintheUK.Aswehaveseenabove,thisstudysuggeststhataccountantsare
makingmistakesinhandlingc.40%oftheirclients’affairs;thereforec.1.8millionclientsare
probablyaffected.Inmanycasesthesemistakeswillcostthoseclientsmanythousandsofpounds
each,sofactoringinanaveragecostof£1,000isunlikelytobeexcessive.
Therefore,usingconservativeestimates,thetotalcosttoclientsofthemistakesmadebytheir
accountantswouldappeartobeastaggeringc.£1.8billion.
Clearlythisisnotafiguretheprofessioncanignore.
And,aswesaidearlier,wehopethatthesefindingswillgalvanisepractitionerseverywheretoraise
theirstandardsandservetheirclientsinthewaytheydeserve.
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Bettersystems
Betterclientmeetingsystems
Intotal,firmssaythattheyleave29%ofmeetingswithclientswithextraworkthattheydidn’thave
atthestartofthemeeting(seeAppendix7,figure14).
However,theStarfirmsmanagetoturnanimpressive34%ofmeetingsintoextrawork–whereasat
theLaggardfirmsitisonly27%.
Figure7
Wesuspectthisdifferenceoccursbecause,astherestofthisreportshows,atthosemeetingsthe
Starfirmsare:
Moreproactive
Morelikelytoshareideasthatcangeneratesignificantadditionalamountsofcashfortheclients
Morelikelytolinkthefeetothevaluesothattheclientcan’tpossiblylose,and
Makeiteasierfortheclienttosay“yes”byofferingclientsatisfactionguarantees
Whilstfirmswillprobablygetbetterresultswhentheydomoreofthosekindsofthings,thekey
messagefromthesefindingsisevensimpler:themoremeetingsyouhavewithclients,thehigher
yourfeesandprofits.
Infact“havemoremeetings”maywellbethesimplestandmostpowerfulactionpointforanyfirm
thatwantstogrow.
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Casestudy:Thoburn&Chapman–Betterresultsfromclientmeetings
Thoburn&Chapmanisalongestablished13personpracticeinSouthShieldsrunbyRalphThoburn
Junior.Inordertoensureconsistentlyhighlevelsofservice,andthatnothingimportantisever
missedorglossedover,theyusestandardagendasforallmeetings.Theseagendascoverfourmain
areas:
Accountingandauditissues
Advancedtaxplanning–toimprovetheclient’staxbills
Wealthcreation–toaddtotheclient’swealthby,forexample,makingtheirbusinessesmore
successfulandprofitable
Wealthmanagement–tomakethemostoftheirwealthoncetheyhavecreatedit
Theiragendasalwaysalsoincludethreekeyquestions:
Whatelsedoyouwantustotalkabouttoday?‐Thisisaskedatthestartofthemeeting,notat
theend,sinceiftheclienthasaburningissueitisvitalthatisdealtwithbeforeanythingelseon
theagenda
Howarewedoing?–Proactivelycheckingthatthecustomerishappywiththeservicetheyare
receivingmeansthatanyproblemscanbecorrectedquickly,andpreventedfromfesteringinto
somethingfarworse
Doyouknowanyoneyoucanintroducetous?–Byaskingforreferralswheneverthecustomer
hasjustsaidthattheyarehappy,Ralphandhisteamendupreceivingmorereferrals.
“Importantlywealsomakesureclientsknowthereisnochargeforphoningusbetweenmeetings,”
explainsRalph,“andwerepeatthemessagewheneverweseethem.Sincethemoretimesthey
phoneuswithproblems,themoretimeswecanhelpthemwithsolutions.Solutionsthatweuse
ExtraWorkOrderstochargeextrafeesfor.”
SeeAppendix3forthecompletemeetingagendausedbyThoburn&Chapman.
Keythoughts: WhatsystemsdoyouhaveinplacetogenerateExtraWorkOrdersfromclient
meetings?Howoftendoyouaskforreferralsatclientmeetings?
Which3actionswillyoutaketoincreasethenumberandeffectivenessofclientmeetings?
1.
2.
3.
3.
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Casestudy:Thoburn&Chapman–Betterresultsfromclientmeetings
Thoburn&Chapmanisalongestablished13personpracticeinSouthShieldsrunbyRalphThoburn
Junior.Inordertoensureconsistentlyhighlevelsofservice,andthatnothingimportantisever
missedorglossedover,theyusestandardagendasforallmeetings.Theseagendascoverfourmain
areas:
Accountingandauditissues
Advancedtaxplanning–toimprovetheclient’staxbills
Wealthcreation–toaddtotheclient’swealthby,forexample,makingtheirbusinessesmore
successfulandprofitable
Wealthmanagement–tomakethemostoftheirwealthoncetheyhavecreatedit
Theiragendasalwaysalsoincludethreekeyquestions:
Whatelsedoyouwantustotalkabouttoday?‐Thisisaskedatthestartofthemeeting,notat
theend,sinceiftheclienthasaburningissueitisvitalthatisdealtwithbeforeanythingelseon
theagenda.
Howarewedoing?–Proactivelycheckingthatthecustomerishappywiththeservicetheyare
receivingmeansthatanyproblemscanbecorrectedquicklyandpreventedfromfesteringinto
somethingfarworse.
Doyouknowanyoneyoucanintroducetous?–Byaskingforreferralswheneverthecustomer
hasjustsaidthattheyarehappy,Ralphandhisteamendupreceivingmorereferrals.
“Importantlywealsomakesureclientsknowthereisnochargeforphoningusbetweenmeetings,”
explainsRalph,“andwerepeatthemessagewheneverweseethem.Sincethemoretimesthey
phoneuswithproblems,themoretimeswecanhelpthemwithsolutions.Solutionsthatweuse
ExtraWorkOrderstochargeextrafeesfor.”
SeeAppendix3forthecompletemeetingagendausedbyThoburn&Chapman.
Keythoughts: WhatsystemsdoyouhaveinplacetogenerateExtraWorkOrdersfromclient
meetings?Howoftendoyouaskforreferralsatclientmeetings?
Which3actionswillyoutaketoincreasethenumberandeffectivenessofclientmeetings?
1.
2.
3.
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Betterengagementlettersystems
Engagementlettersarefundamentaltotheentireaccountant‐clientrelationship.Soitis
instructionaltoseewhattheydoanddonotspecificallyreferto.
Thedatashowsthat:
31%ofStarfirmsspecificallyrefertoTaxCreditsintheirengagementletters,comparedtoonly
15%ofLaggards
17%ofStarsspecificallyrefertotaxavoidance,comparedtoonly10%ofLaggards
12%ofStarsspecificallyrefertoR&Dtaxcredits,comparedtoonly5%ofLaggards
10%ofStarsspecificallyrefertocarefeeplanning,comparedtoonly2%ofLaggards
Interestingly,however,thetrendisreversedforIHTplanning–with16%ofLaggardsreferringto
it,butonly10%ofStarsdoingso
Figure8:%offirmswhospecificallyincludetheaboveintheirengagementletters
Ofcourse,thesedifferencescouldbedrivenbyclients.Inotherwords,theymaysimplyand
legitimatelyreflectthedifferingneedsoftheclientbasesofthetwotypesoffirms:i.e.moreofthe
clientsoftheStarfirmsactuallywanthelpinthesemoreadvancedareas.Andifthatisthecase,it
reinforcestheviewthattheStarfirmsareabletoattractwhatmanywouldregardas“better”clients
–i.e.clientswhoaremorereceptivetothethingsagoodaccountantcandoforthem.
Ontheotherhand,thesedifferencescouldbetheresultofsomethingmuchlessbenign:theymay
bedrivenbytheincompetenciesandinertiaoftheaccountants.Inotherwords,becausesome
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accountantsdon’tknowhowtohelptheirclientsintheseareas,don’twantto,orhaven’tevergiven
itanyproperthought.
Eitherway,therearekeylessonsherefortheprofession.
Engagementletterssetthetonefortheaccountant‐clientrelationship.Theyshouldnotstaysilent
onanyoftheissuesthatareimportanttoclients,sincethatleadstouncertainty,misunderstandings
andexpectationgaps.
Wheretheaccountantshavethein‐houseskillstodealwithanimportantsetofissues,theyshould
doso,andshoulddosoproactively.Andwheretheaccountantsdonothavethenecessaryin‐house
skillstheyshoulddooneoftwothings.
Eithertheyshouldspecificallyexcludethoseissuesintheirengagementletters.Inwhichcase
notonlywilltheymissoutonthefeepotentialfromthistypeofwork,buttheyalsoruntherisk
thattheylosetheclienttoanotheraccountantwhoisabletomeettheirneedsmorefully.
Ortheyshouldspecificallyincludethemintheirengagementletters,andthendeliverthe
promisebyforgingastrategicalliancewithathirdpartyexpertwhocandealwiththoseissues
ontheirbehalf.Formanyfirmsthiswillbethepreferredoption.Notonlydoesitgiveclients
whattheyneed.Butitalsoallowsthefirmtogeneratesubstantialextraprofits,oftenwithlittle
ornoextrawork,byvirtueofthemreceivingashareofthefeeschargedtoclientsforthework
donebythethirdpartyexpert.
Example‐ThewaymanyStarfirmsworkwiththirdpartyexperts
Initsseminal2003report“Theprofitableandsustainablepractice”,theICAEWsaidthat,as
legislationandthebusinesslandscapebecomeincreasinglycomplex,thereisnowaythatmost
practicescanaffordtodevelopallthein‐houseskillstheyneedtomeettheirclientsfullrangeof
needs.AsaresulttheICAEWrecommendedthat:
“...thereisanincreasingneedtomakestrategicalliances…withotherorganisationswhocansupply
expertisetheydon’thavein‐house,easilyandefficiently.”(page14)
Inresponsetothisrecommendation,manypracticeshavesetupstrategicalliancesinthethreekey
areasofadvancedtaxplanning,financialservicesandbusinessconsulting.Andasaconsequence
theyreportthefollowingbenefits:
Substantiallyimprovedclientservice
Substantiallyincreasedrevenues
Substantiallyreducedpartnerworkinghours,and
Substantiallyreducedtimecosts
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accountantsdon’tknowhowtohelptheirclientsintheseareas,don’twantto,orhaven’tevergiven
itanyproperthought.
Eitherway,therearekeylessonsherefortheprofession.
Engagementletterssetthetonefortheaccountant‐clientrelationship.Theyshouldnotstaysilent
onanyoftheissuesthatareimportanttoclients,sincethatleadstouncertainty,misunderstandings
andexpectationgaps.
Wheretheaccountantshavethein‐houseskillstodealwithanimportantsetofissues,theyshould
doso,andshoulddosoproactively.Andwheretheaccountantsdonothavethenecessaryin‐house
skillstheyshoulddooneoftwothings.
Eithertheyshouldspecificallyexcludethoseissuesintheirengagementletters.Inwhichcase
notonlywilltheymissoutonthefeepotentialfromthistypeofwork,buttheyalsoruntherisk
thattheylosetheclienttoanotheraccountantwhoisabletomeettheirneedsmorefully.
Ortheyshouldspecificallyincludethemintheirengagementletters,andthendeliverthe
promisebyforgingastrategicalliancewithathirdpartyexpertwhocandealwiththoseissues
ontheirbehalf.Formanyfirmsthiswillbethepreferredoption.Notonlydoesitgiveclients
whattheyneed.Butitalsoallowsthefirmtogeneratesubstantialextraprofits,oftenwithlittle
ornoextrawork,byvirtueofthemreceivingashareofthefeeschargedtoclientsforthework
donebythethirdpartyexpert.
Example‐ThewaymanyStarfirmsworkwiththirdpartyexperts
Initsseminal2003report“Theprofitableandsustainablepractice”,theICAEWsaidthat,as
legislationandthebusinesslandscapebecomeincreasinglycomplex,thereisnowaythatmost
practicescanaffordtodevelopallthein‐houseskillstheyneedtomeettheirclients’fullrangeof
needs.AsaresulttheICAEWrecommendedthat:
“...thereisanincreasingneedtomakestrategicalliances…withotherorganisationswhocansupply
expertisetheydon’thavein‐house,easilyandefficiently.”(page14)
Inresponsetothisrecommendation,manypracticeshavesetupstrategicalliancesinthethreekey
areasofadvancedtaxplanning,financialservicesandbusinessconsulting.Andasaconsequence
theyreportthefollowingbenefits:
Substantiallyimprovedclientservice
Substantiallyincreasedrevenues
Substantiallyreducedpartnerworkinghours,and
Substantiallyreducedtimecosts
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£100,000inpayawaysayear.Andweareevenawareoffirmsthathaveearnedover£100,000in
payawayfeesfromasingleclient.Thesefeesareinvariablyverymuchhigherthanthefirm
wouldhaveearnedunderthetraditional“doalltheworkandtakealltherisk”businessmodel.
Asaresultclientsgettheverybesttaxplanningadviceandsupport,theirtaxbillsareverymuch
lower,andthepracticeearnssubstantiallyhigherfees.Inaddition,thetimecostsinvolvedin
generatingthesefeesareverysmall.
Importantnote
Wehavefocussedonadvancedtaxplanningsincethatistheareawhereweseethemostfirms
forgingsuccessfulstrategicalliances.However,theprinciplesapplyequallytoanyareawhereclients
haveamajorneed,butyourpracticedoesn’thavethein‐houseskill/capacitytomeetthatneed
brilliantlywell.
Keythoughts: Whatelseshouldbespecificallyincludedandexcludedfromyourengagement
letters?Whatotherprofitablestrategicalliancesshouldyourfirmforgeinorder
toensurethatclientsgetaccesstothebestpossiblesolutions?
Which3actionswillyoutaketogiveclaritytoyourengagementlettersandtoforgeprofitable
strategicalliances?
1.
2.
3.
Bettertaxplanningsystems
Interestingly,thesurveyrevealsthatthereisnearunanimityineverypartoftheprofessionthat
“mostclientswanttopaythelegalminimumamountoftax”.
Tobeprecise,98%ofStarssaidthatmostoftheirclientswanttopaythelegalminimumamountof
tax,and97%ofLaggardssaidthesame.
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Inmanycasesthecostreductionsareverysubstantialindeed–withthetimecostelementoffees
usuallybeingreducedto10%orlessoftherelevantfees.Andsomepracticessaythattheirtime
costsareindeedmuchcloserto0%thanto10%offees.
Howsomefirmsworkwiththirdpartytaxexperts
FollowingtheICAEW’sadvice,manysuccessfulpracticesnowworkwithanumberofcarefullydue
diligencedtaxplanningspecialistswhocanbringadvancedtaxplanningsolutionstothetableforthe
benefitoftheirclients.Typicallytheirarrangementsworklikethis:
Thepracticemakestheirclientsandprospectsawareoftheirstrategicallianceswiththirdparty
taxspecialists–e.g.throughseminarsandone‐to‐onediscussionsetc.
Whenaclientisinterestedthepracticewillintroducethemtothetaxspecialist.
Thetaxspecialistdoesalltheexplaining–i.e.theydescribethetaxplanningoptionsthatsuitthe
client’sneeds,explainalltheprosandcons,includingtherisk‐rewardtradeoff,andanswerall
theclient’squestions.
Thetaxspecialistwillalsodoallthe“selling”–althoughthistendstobeverysoftsell,sincethe
potentialtaxsavingsareusuallylargeenoughtomakeitano‐brainerformanyclients.
Wheretheclientwantstogoaheadwithapieceofadvancedtaxplanningthetaxspecialist
agreesavalue‐basedfeewiththeclient–typically25%ofthetaxthatwillbesaved.
Thetaxspecialistentersintoaseparateengagementwiththeclient,doesallthetechnicalwork
andbearsalltheengagementrisk(sothetimecostforthepracticeisgenerallynegligible).
Thetaxspecialistwillalreadyhavesigneda“nopoach”agreement.
Asaresult,clientserviceisimproved,andclientsendupwithverymuchlowertaxbillsthanthey
wouldhavedoneifthepracticehadnotsetupthesestrategicalliances.
Thetaxspecialistneverchargesthepracticeasinglepennyforthistypeofarrangement.Instead
theyactuallyrewardthepracticebypayingthema“payaway”:
Thesepayawaysarefullydisclosedtotheclientandretainedunderthetermsoftheir
engagementletter–sotheyfullycomplywithallrelevantprofessionalandlegalrequirements.
Payawayswilltypicallybe10%to40%ofthefeepaidbytheclienttothetaxspecialist.And
giventhatthetaxspecialistwillgenerallychargetheclient25%ofthetaxsaved,theaccountant
willtypicallyearnpayawaysequalto2.5%to10%ofthetaxsaved.
Asaresultpayawaysarerarelylessthan£2,000perparticipatingclient.Andtheyareusuallyin
therangeof£2,000–£20,000perclient.Soacrossaclientbasethetotalfeepotentialcanbe
verysubstantialindeed.Forexample,weareawareofmanypracticesearningwellinexcessof
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£100,000inpayawaysayear.Andweareevenawareoffirmsthathaveearnedover£100,000in
payawayfeesfromasingleclient.Thesefeesareinvariablyverymuchhigherthanthefirm
wouldhaveearnedunderthetraditional“doalltheworkandtakealltherisk”businessmodel.
Asaresultclientsgettheverybesttaxplanningadviceandsupport,theirtaxbillsareverymuch
lower,andthepracticeearnssubstantiallyhigherfees.Inaddition,thetimecostsinvolvedin
generatingthesefeesareverysmall.
Importantnote
Wehavefocussedonadvancedtaxplanningsincethatistheareawhereweseethemostfirms
forgingsuccessfulstrategicalliances.However,theprinciplesapplyequallytoanyareawhereclients
haveamajorneed,butyourpracticedoesn’thavethein‐houseskill/capacitytomeetthatneed
brilliantlywell.
Keythoughts: Whatelseshouldbespecificallyincludedandexcludedfromyourengagement
letters?Whatotherprofitablestrategicalliancesshouldyourfirmforgeinorder
toensurethatclientsgetaccesstothebestpossiblesolutions?
Which3actionswillyoutaketogiveclaritytoyourengagementlettersandtoforgeprofitable
strategicalliances?
1.
2.
3.
Bettertaxplanningsystems
Interestingly,thesurveyrevealsthatthereisnearunanimityineverypartoftheprofessionthat
“mostclientswanttopaythelegalminimumamountoftax”.
Tobeprecise,98%ofStarssaidthatmostoftheirclientswanttopaythelegalminimumamountof
tax,and97%ofLaggardssaidthesame.
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Andtodoallofthisproactivelyforeverysingleclient,everysingleyear–notjustforsome
clientssomeofthetime
Keythought: Howcanyoubecomebetteratidentifyingallthekeytaxopportunities,
quantifyingtheimpactandhelpingclientstomakefullyinformeddecisions?
Which3actionswillyoutaketoimproveyourtaxplanningsystemssothattheybenefityour
clientsandyourpractice?
1.
2.
3.
Bettermarketingsystems
Thesurveydidnotattempttoevaluateeveryaspectofthemarketingcarriedoutbyaccountancy
firms.Insteaditconcentratedonwhatisprobablythemostrapidlygrowingformofmarketing–
socialmedia.
Theresultscontainafewsurprises.Whenaskedwhethertheysawthevariouskindsofsocialmedia
asbigmarketingopportunities,theanswerswereasfollows:
Seenasa“Bigopportunity”by
this%ofStars
Seenasa“Bigopportunity”by
this%ofLaggards
LinkedIn 88% 93%
Twitter 63% 52%
Facebook 55% 53%
YouTube 52% 37%
Table3
Whatisnotsurprisingisthat:
LinkedInisseenaspresentingthebiggestopportunitybyeveryone
Allfourmaintypesofsocialmediaareseenasbigopportunitiesbymostoftheprofession
ThefirstsurpriseisthatLinkedInisseenasmoreofanopportunitybyLaggardsthanitisbyStars.
However,thisisprobablymerelyreflectingthefindingsinthebook“TheUK’sbestaccountancy
practices”,whichrevealedthatthebestfirmshavealreadymadealotmoreconnectionsonLinkedIn
andalsoreceivedalotmorerecommendationsthere.Andifthebestpracticeshavealready
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Figure9
Soitiscrystalclearthataccountantshaveadutytohelptheirclientstodoexactlythat.Andthat,of
course,meansleavingnostoneunturnedintheirquesttoprovidebettertaxoutcomes.
Itisthereforebothalarmingandwhollyunacceptablethat:
Accountantsaremakingmistakesonaroundhalfofalltheirclients’affairs‐andthatagreat
manyoftheseerrorsandomissionsaretaxrelated(seesectiononspottingmoremistakes
above)
Someaccountantsarenotforgingstrategicallianceswiththirdpartytaxexperts–preferring
eithertomeddleintaxissuesbeyondtheircompetencyortoleavetheirclientshighanddry
withoutanyadviceincertainkeyareas(seeexampleofhowStarfirmsworkwiththirdparty
expertsabove)
AhighproportionofLaggardsarecreatingconfusionandmisunderstandingbystayingsilenton
keytaxissuesintheirengagementletters(seesectiononbetterengagementlettersabove)
Otherresearchsuggeststhat,inadditiontorectifyingtheshortcomingsdescribedabove,besttax
practiceincludeshavingrobustsystemsto:
Identifyallthekeytaxissuesandopportunitiesfacingclients
Quicklyquantifytheapproximatemagnitudeoftheirimpact–e.g.usingsoftwaretoestimate
thetaxsavingsfromincorporating,capitalisinggoodwill,andextractingprofitsinthemosttax
efficientways
Communicateallofthisclearly,effectivelyandconciselytoclientssothatthey“getit”andare
abletomakeinformeddecisionsabouttheirtaxoptions
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Andtodoallofthisproactivelyforeverysingleclient,everysingleyear–notjustforsome
clientssomeofthetime
Keythought: Howcanyoubecomebetteratidentifyingallthekeytaxopportunities,
quantifyingtheimpactandhelpingclientstomakefullyinformeddecisions?
Which3actionswillyoutaketoimproveyourtaxplanningsystemssothattheybenefityour
clientsandyourpractice?
1.
2.
3.
Bettermarketingsystems
Thesurveydidnotattempttoevaluateeveryaspectofthemarketingcarriedoutbyaccountancy
firms.Insteaditconcentratedonwhatisprobablythemostrapidlygrowingformofmarketing–
socialmedia.
Theresultscontainafewsurprises.Whenaskedwhethertheysawthevariouskindsofsocialmedia
asbigmarketingopportunities,theanswerswereasfollows:
Seenasa“Bigopportunity”by
this%ofStars
Seenasa“Bigopportunity”by
this%ofLaggards
LinkedIn 88% 93%
Twitter 63% 52%
Facebook 55% 53%
YouTube 52% 37%
Table3
Whatisnotsurprisingisthat:
LinkedInisseenaspresentingthebiggestopportunitybyeveryone
Allfourmaintypesofsocialmediaareseenasbigopportunitiesbymostoftheprofession
ThefirstsurpriseisthatLinkedInisseenasmoreofanopportunitybyLaggardsthanitisbyStars.
However,thisisprobablymerelyreflectingthefindingsinthebook“TheUK’sbestaccountancy
practices”,whichrevealedthatthebestfirmshavealreadymadealotmoreconnectionsonLinkedIn
andalsoreceivedalotmorerecommendationsthere.Andifthebestpracticeshavealready
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extractedagreatdealofmarketingvaluefromLinkedIn,itisperhapsunderstandablethattheyare
slightlylessexcitedaboutitsscopetodoevenmoreforthem.Incontrast,thefirmsthathaveyetto
getproperlystartedwithLinkedInareperhapsanticipatingmorequickwinsandlowlyingfruit.
Thesecondintriguingresultisthatthetwogroupsdiffermostovertheirassessmentofthe
usefulnessofYouTube:with52%ofStarsseeingitasabigopportunity,comparedtoonly37%of
Laggards.
Wesuspectthisreflectsthefactthatusingvideowelltakesmoretime,effortandskillthantypinga
fewwordsintoatweet,LinkedInforumorFacebookpage,andrequiresmoreinvestmenttoo.And
alsothatcreatingasuccessfulYouTubechannel,forexample,willprobablytakemoreofalongterm
commitment.WhilsttheStarsseemtobeupforthechallenge,andwillingtomakethenecessary
investment,theLaggardsdonot.
Howeveryouinterprettheseresults,twothingsareclear:socialmediaisnotsomethingthancanbe
ignored,andthosefirmsthatcreatethebestsystemstomakethemostofitwillhaveamajor
marketingadvantage.
CaseStudy:StuartRamsay–Makingsocialmediawork
Stuartisasolepractitionerwhoemploys3peopleatAccountancyExtrainHalifax,WestYorkshire
(establishedJuly2007).
Thisisagreatexampleofhowasolepractitionercanintegratesocialmediaintohispractice’s
planningstrategy.Stuarthashadalargeamountofsuccesswithsocialmedia,andparticularly
LinkedInandTwitter,whichhasledtoanumberofnewclients,amuchimprovedrelationshipwith
hiscurrentclientsandhasalsoprovidedhimwithaplatformtosharebestpracticewithother
accountantsacrosstheUK.HereareaselectionofStuart’sthoughtsonhowaccountantscanutilise
socialmedia(thisistakenfromthevideo‘Socialmedia:anaccountant’sperspective’whichcanbe
foundontheAVNYouTubechannelatwww.youtube.com/avnteam):
“Ithinksocialmediaisaverysuccessfulrouteformarketingforaccountants,but:youhavetouseit
properly,youhavetouseitintherightway,youhavetobecommitted,inthesamewayasyou
wouldbeatanofflinenetworkingevent
There’snopointjoiningup,creatingaLinkedInprofileandthenconnectingwithpeopleanddoing
nothingwiththoseconnections.It’salittlebitlikewalkingintoanetworkingeventandmeshovinga
businesscardintosomeone’shandandthenwalkingaway.We’dhavenothingofarelationshipfrom
itsoyou’renotgoingtogainanybusinessthatway.Similarly,ifIshovedacardinyourhandand
thenstartedspammingyouwithsalesmessages,you’regoingtoveryquicklywalkawayfrommeat
anetworkingevent.Thesamerulesapplywithonlinenetworking(socialmedia)astheydowith
offlinenetworking,face‐to‐faceevents.
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extractedagreatdealofmarketingvaluefromLinkedIn,itisperhapsunderstandablethattheyare
slightlylessexcitedaboutitsscopetodoevenmoreforthem.Incontrast,thefirmsthathaveyetto
getproperlystartedwithLinkedInareperhapsanticipatingmorequickwinsandlowlyingfruit.
Thesecondintriguingresultisthatthetwogroupsdiffermostovertheirassessmentofthe
usefulnessofYouTube:with52%ofStarsseeingitasabigopportunity,comparedtoonly37%of
Laggards.
Wesuspectthisreflectsthefactthatusingvideowelltakesmoretime,effortandskillthantypinga
fewwordsintoatweet,LinkedInforumorFacebookpage,andrequiresmoreinvestmenttoo.And
alsothatcreatingasuccessfulYouTubechannel,forexample,willprobablytakemoreofalongterm
commitment.WhilsttheStarsseemtobeupforthechallenge,andwillingtomakethenecessary
investment,theLaggardsdonot.
Howeveryouinterprettheseresults,twothingsareclear:socialmediaisnotsomethingthancanbe
ignored,andthosefirmsthatcreatethebestsystemstomakethemostofitwillhaveamajor
marketingadvantage.
CaseStudy:StuartRamsay–Makingsocialmediawork
Stuartisasolepractitionerwhoemploys3peopleatAccountancyExtrainHalifax,WestYorkshire
(establishedJuly2007).
Thisisagreatexampleofhowasolepractitionercanintegratesocialmediaintohispractice’s
planningstrategy.Stuarthashadalargeamountofsuccesswithsocialmedia,andparticularly
LinkedInandTwitter,whichhasledtoanumberofnewclients,amuchimprovedrelationshipwith
hiscurrentclientsandhasalsoprovidedhimwithaplatformtosharebestpracticewithother
accountantsacrosstheUK.HereareaselectionofStuart’sthoughtsonhowaccountantscanutilise
socialmedia(thisistakenfromthevideo‘Socialmedia:anaccountant’sperspective’whichcanbe
foundontheAVNYouTubechannelatwww.youtube.com/avnteam):
“Ithinksocialmediaisaverysuccessfulrouteformarketingforaccountants,but:youhavetouseit
properly,youhavetouseitintherightway,youhavetobecommitted,inthesamewayasyou
wouldbeatanofflinenetworkingevent.”
“There’snopointjoiningup,creatingaLinkedInprofileandthenconnectingwithpeopleanddoing
nothingwiththoseconnections.It’salittlebitlikewalkingintoanetworkingeventandmeshovinga
businesscardintosomeone’shandandthenwalkingaway.We’dhavenothingofarelationshipfrom
itsoyou’renotgoingtogainanybusinessthatway.Similarly,ifIshovedacardinyourhandand
thenstartedspammingyouwithsalesmessages,you’regoingtoveryquicklywalkawayfrommeat
anetworkingevent.Thesamerulesapplywithonlinenetworking(socialmedia)astheydowith
offlinenetworking,face‐to‐faceevents.”
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
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“WithLinkedIn,thepowerformeisnotjustwiththeconnectionsyou’vegot,butit’sincollecting
thetestimonialsonyourownprofileandinusingthegroups.I’vegotalotofbenefitoutofjoiningin
localgroups,specialistgroups,groupswheremypotentialclientswillbehangingoutandjustgetting
involved,enteringdiscussionsevenifthey’renottodowithaccountancy.”
“Aswellasfindingnewpotentialclients,bothLinkedInandTwitterhavebeenagreatwayfor
networkingwithotherlike‐mindedaccountants;gainingnewideas,thoughts,insightsintowhat
worksforthemandwhatworksforme.Justsharingreallyandthatwaywecanallimprove.”
“MypresenceonallsocialmediaismeasanindividualandIdothatbecauseIbelieveifIwenttoa
networkingeventitwouldbemethatwouldbetalkingtopeople.SomyviewisthatonlineItake
thatsamepersonaandit’smethatpeoplearebuyingintoandinteractingwith,ratherthana
corporateidentity.“
“Twitterhasprovedquiteinterestingreally,becauseIhavefoundthatpeoplewillpostonthere
lookingforanaccountantandanexistingclientwillgoonandsay“talktoStuart,weusehimandwe
findhimreallygood”andthenallofasuddentheycan‘tyrekick’youbeforehavingtoreallyinteract
withyouintherealworld.Sothat’sprovedquiteagentleintroductiontoprospectiveclientsbefore
theyeverhavetopickupthephoneandtalktous.”
“OnaverageeachweekIprobablyspendsomewherearound5hoursonsocialmedia.Iprobably
split50‐50betweenLinkedInandTwitter(abouthalfanhouradayoneach).LinkedIntendstobeall
inonego–I’llhavealookatwhat’sgoingoninthegroupsthatI’mamemberofandpostanything
ontherethat’srelevant.Twittertendstobethreeorfour10‐15minutechunksthroughouttheday.”
“AlotofmyclientsareonLinkedInandTwitter–IfinditveryusefulthatIcansendouttheodd
tweetandaclientwillrespondandwecanjusthaveaverybrief‘conversation’,whereasbefore
therewouldhaveprobablybeenanexchangeofemailsoraphonecall.Soalotofmyclientslikeit
becauseit’slive,it’sthereandtheyknowtheycanjustmoveonanddothenextthing.”
“WithregardtoclientsbeingonLinkedIn,Ithinkthetestimonialsarereallyquiteapowerfulpartof
that,andIdomakeitaruletoaskclientsfortestimonialsonaregularbasis,andwe’vewonalotof
newbusinessthroughhavingthetestimonialsonmyLinkedInprofile.”
“IfIwastalkingtosomeonewhowasscepticalaboutit,I’dsayhaveagoandseehowitworksfor
you,butbecommittedanddoitproperly.Youcan’tjustjoinupandexpectafloodofnewbusiness
tocomeyourwaybecauseyou’vegotaprofileonLinkedInoryou’vesentafewtweetsoutabout
thelatestBudgetupdate;you’vegottogetonthereandyou’vegottointeractwithpeople,justin
exactlythesamewayyouwouldifyouwereamemberofabreakfastnetworkingclubora
lunchtimenetworkingclub–treatitexactlythesamewayandyou’llgetbenefitsfromit.”
Keythoughts: Howwellisyourfirmcurrentlyusingsocialmedia?Areallyourkeypeopleatleast
27www.myaccountantsclub.co.uk
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
Yourblueprintforabetteraccountancypractice
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www.myaccountantsclub.co.uk Page28
“WithLinkedIn,thepowerformeisnotjustwiththeconnectionsyou’vegot,butit’sincollecting
thetestimonialsonyourownprofileandinusingthegroups.I’vegotalotofbenefitoutofjoiningin
localgroups,specialistgroups,groupswheremypotentialclientswillbehangingoutandjustgetting
involved,enteringdiscussionsevenifthey’renottodowithaccountancy.”
“Aswellasfindingnewpotentialclients,bothLinkedInandTwitterhavebeenagreatwayfor
networkingwithotherlike‐mindedaccountants;gainingnewideas,thoughts,insightsintowhat
worksforthemandwhatworksforme.Justsharingreallyandthatwaywecanallimprove.”
“MypresenceonallsocialmediaismeasanindividualandIdothatbecauseIbelieveifIwenttoa
networkingeventitwouldbemethatwouldbetalkingtopeople.SomyviewisthatonlineItake
thatsamepersonaandit’smethatpeoplearebuyingintoandinteractingwith,ratherthana
corporateidentity.“
“Twitterhasprovedquiteinterestingreally,becauseIhavefoundthatpeoplewillpostonthere
lookingforanaccountantandanexistingclientwillgoonandsay“talktoStuart,weusehimandwe
findhimreallygood”andthenallofasuddentheycan‘tyrekick’youbeforehavingtoreallyinteract
withyouintherealworld.Sothat’sprovedquiteagentleintroductiontoprospectiveclientsbefore
theyeverhavetopickupthephoneandtalktous.”
“OnaverageeachweekIprobablyspendsomewherearound5hoursonsocialmedia.Iprobably
split50‐50betweenLinkedInandTwitter(abouthalfanhouradayoneach).LinkedIntendstobeall
inonego–I’llhavealookatwhat’sgoingoninthegroupsthatI’mamemberofandpostanything
ontherethat’srelevant.Twittertendstobethreeorfour10‐15minutechunksthroughouttheday.”
“AlotofmyclientsareonLinkedInandTwitter–IfinditveryusefulthatIcansendouttheodd
tweetandaclientwillrespondandwecanjusthaveaverybrief‘conversation’,whereasbefore
therewouldhaveprobablybeenanexchangeofemailsoraphonecall.Soalotofmyclientslikeit
becauseit’slive,it’sthereandtheyknowtheycanjustmoveonanddothenextthing.”
“WithregardtoclientsbeingonLinkedIn,Ithinkthetestimonialsarereallyquiteapowerfulpartof
that,andIdomakeitaruletoaskclientsfortestimonialsonaregularbasis,andwe’vewonalotof
newbusinessthroughhavingthetestimonialsonmyLinkedInprofile.”
“IfIwastalkingtosomeonewhowasscepticalaboutit,I’dsayhaveagoandseehowitworksfor
you,butbecommittedanddoitproperly.Youcan’tjustjoinupandexpectafloodofnewbusiness
tocomeyourwaybecauseyou’vegotaprofileonLinkedInoryou’vesentafewtweetsoutabout
thelatestBudgetupdate;you’vegottogetonthereandyou’vegottointeractwithpeople,justin
exactlythesamewayyouwouldifyouwereamemberofabreakfastnetworkingclubora
lunchtimenetworkingclub–treatitexactlythesamewayandyou’llgetbenefitsfromit.”
Keythoughts: Howwellisyourfirmcurrentlyusingsocialmedia?Areallyourkeypeopleatleast
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page29
usingLinkedIntoobtaintestimonials,makenewconnectionsandnurtureexisting
contacts?Andwhatnewsocialmediainitiativescanyoutest?
Which3actionswillyoutaketoimprovetheeffectivenessofyoursocialmediause?
1.
2.
3.
Betteraccountssystems
NB:Theresearchinthissectionwasnotpartofthemainsurvey,butwascarriedoutalongsideitwith
aseparategroupofpractitioners.
AfewyearsagoStevePipesurveyed250accountancyfirmsandfoundthat73%oftheirpartners
(i.e.thepeoplewhomaketheirlivingproducingannualaccounts)acknowledgedthatthereareat
leastfivefundamentalflawsinannualaccounts.
Thisyearherepeatedthesurveywithover100additionalpartnersandfoundthatnothinghad
changed.
Ofcourse,73%ofaccountantsarenotsayingthataccountsarewrong,don’taddupordon’tfully
complywithalltherelevantlawsandreportingstandards.Whattheyaresayingisthatannual
accountsareoflittleornousetothebusinessesthatareforcedtopayforthemsincetheydon’t
givebusinessownerstheinformationtheyreallyneedtodrivetheirbusinessesforward.
Morespecifically,inthesurveyaccountantssaidthatannualaccountsarefundamentallyflawed
becausethey:
Don’tmakeeasyreading
Don’tshowhowwellabusinessisdoingcomparedtoothersintheindustry
Don’tidentifystrengthsandweaknesses
Don’tidentifythescopeforimprovement
Don’tsupportdecisionmaking
Don’tshowallthenumbersthatmatter
Toomanyofthenumberstheydoincludearebasedonjudgement
Mostofthenumbersareseriouslyoutofdatebythetimeanyoneseesthem
28www.myaccountantsclub.co.uk
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page29
usingLinkedIntoobtaintestimonials,makenewconnectionsandnurtureexisting
contacts?Andwhatnewsocialmediainitiativescanyoutest?
Which3actionswillyoutaketoimprovetheeffectivenessofyoursocialmediause?
1.
2.
3.
Betteraccountssystems
NB:Theresearchinthissectionwasnotpartofthemainsurvey,butwascarriedoutalongsideitwith
aseparategroupofpractitioners.
AfewyearsagoStevePipesurveyed250accountancyfirmsandfoundthat73%oftheirpartners
(i.e.thepeoplewhomaketheirlivingproducingannualaccounts)acknowledgedthatthereareat
leastfivefundamentalflawsinannualaccounts.
Thisyearherepeatedthesurveywithover100additionalpartnersandfoundthatnothinghad
changed.
Ofcourse,73%ofaccountantsarenotsayingthataccountsarewrong,don’taddupordon’tfully
complywithalltherelevantlawsandreportingstandards.Whattheyaresayingisthatannual
accountsareoflittleornousetothebusinessesthatareforcedtopayforthemsincetheydon’t
givebusinessownerstheinformationtheyreallyneedtodrivetheirbusinessesforward.
Morespecifically,inthesurveyaccountantssaidthatannualaccountsarefundamentallyflawed
becausethey:
Don’tmakeeasyreading
Don’tshowhowwellabusinessisdoingcomparedtoothersintheindustry
Don’tidentifystrengthsandweaknesses
Don’tidentifythescopeforimprovement
Don’tsupportdecisionmaking
Don’tshowallthenumbersthatmatter
Toomanyofthenumberstheydoincludearebasedonjudgement
Mostofthenumbersareseriouslyoutofdatebythetimeanyoneseesthem
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page30
Someaccountantsbelievethatthisisnottheirproblem.Afterall,theyargue,theyareproducing
fullycompliantaccounts,sowhyshouldtheydomore?Theanswerissimple…tostopthereistolet
clientsdown.Businessesdeserveandneedmorefromtheiraccountants.
Manyaccountantsarealreadyrisingtothischallengebyaddinga“FinancialPerformanceReview”to
theiraccounts–i.e.aplainEnglishsupplementaryreportcontaininggraphs,ratios,sensitivity
analysisandcommentary.
Andothersarealsoaddingbenchmarkinginformationtotheiraccounts–mostusuallyintheformof
asupplementaryplainEnglishreportthatexplainshowthebusinesscompareswithothersinits
industry,itskeyfinancialstrengthsandweaknesses,howmuchadditionalprofittheevidenceshows
theyaremissingouton,andhowtheycanreclaimthosemissingprofits.
Thesesortsofreportscanbeproducedinminutesusingthenewbreedofpracticesupportsoftware
nowreadilyavailable.Andnotonlydotheydelivernewinsightsandrealvaluetoclients,butthese
newreportsalsodifferentiatetheaccountantsproducingthem.Asaresulttheymakeitmucheasier
forfirmstowinnewclients,keepexistingclientsandchargepremiumprices.
Worthwhileasthesetwosupplementaryreportsare,inouropiniontheydonotgofarenough.
WebelievetheprofessionneedsacompletelynewtypeofPerformanceMeasurementand
ImprovementSystem(‘PMISystem’)thatfollowsonfromwheretraditionalaccountsleaveoff.
ThisnewPMISystemapproachbuildsonwhataccountantshavealwaysdone–butstartswhere
traditionalaccountsfinish.Andessentiallyitisaneightstepcodificationofbestpractice.
PMI‐The8stepstobestpracticeforbusinessowners
Step1 Decidewhatyouwanttoachieveintheyear‐i.e.takeyourgoalsandplansandturnthem
intoforecastsandbudgets.
Step2 Measurehowwellyouactuallyperformeachmonth–usingacombinationoftraditional
managementaccountinginformationandotherkeyperformanceindicators,sothatyouhaveyour
fingeronthepulseofeverythingthatmatters.Andthenusethatinformationtofine‐tuneyour
actionplans.
Step3 Measureyourfullyear’sperformance–byproducingfullfinancialaccountsattheendof
theyear,asrequiredbylaw.
Step4 Evaluateyourperformancebycomparingtopreviousyears–sothattheunderlyingtrends
arecrystalclear.
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
29www.myaccountantsclub.co.uk
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page31
Step5 Evaluateyourperformancebycomparingittotherestofyourindustry–using
benchmarkingtoidentifyyourstrengthsandweaknesses.
Step6 Estimatehowmuchyourbusinessisworth–sothatyoucanassesshowwellyouare
creatingvalue.
Step7 Calculatehowmuchmoreprofitableandvaluableyourbusinesscouldbe–useeverything
youhavelearnedaboutyourownperformanceandtheperformanceofotherstoestimatehow
muchmoresuccessfulyourbusinesscouldbe.
Step8 Developaperformanceimprovementplan–i.e.anactionplansettingoutpreciselywhat
youaregoingtodotoimproveyourperformance.
Ofcourse,someaccountantswillarguethattheyhelptheirclientsintheseeightwaysalready–and
thatmaybetrue.Butourviewisthatitisnotgoodenoughtobedoingitsomeofthetimeforsome
clients.Wehavetostartdoingitallofthetimeforeverysingleclient,becauseeverysingleclient
deservesthissortofinput,guidanceandsupport(suitablytailoredtotheirleveloffinancial
sophistication,ofcourse).
Allreallysuccessfulbusinessesrecognisethatthetraditionalprofitandlossaccountandbalance
sheetdoesnotgivethemenoughinformationtoreallydrivetheirbusinessesforward.Thereforeall
reallysuccessfulbusinessesalsomeasureotherKeySuccessDrivers(alsoknownasKeyPerformance
Indicatorsor‘KPIs’),sothattheycanreallyunderstandwhatishappeningwhilethereisstilltimeto
dosomethingaboutit.
Example
Theonlyinformationtraditionalmanagementaccountsgiveaboutsalesisthevalueofinvoices
raised.Butformanybusinessesthatkindofbackwardslooking“lagindicator”isnotveryusefulfor
understandingwhatisalreadyhappening,orpredictingwhatwillhappennext.
MuchmorehelpfulformanagingsalesareKeySuccessDriverssuchasthenumberofsalesleads,the
conversionratefromleadtosaleandthesizeoforderbooks.
SomostsuccessfulbusinessesnowsystematicallymapoutandmeasurethosekindsofKeySuccess
Driverstoo.
Whenyouthinkaboutit,justabouteverythingthatreallymattersinabusinesscanbemeasuredby
anumber.
Someofthosekeynumbersmaybeobvious,suchasthenumberofcustomers,sales,profitsand
yourtaxbills.
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page30
Someaccountantsbelievethatthisisnottheirproblem.Afterall,theyargue,theyareproducing
fullycompliantaccounts,sowhyshouldtheydomore?Theanswerissimple…tostopthereistolet
clientsdown.Businessesdeserveandneedmorefromtheiraccountants.
Manyaccountantsarealreadyrisingtothischallengebyaddinga“FinancialPerformanceReview”to
theiraccounts–i.e.aplainEnglishsupplementaryreportcontaininggraphs,ratios,sensitivity
analysisandcommentary.
Andothersarealsoaddingbenchmarkinginformationtotheiraccounts–mostusuallyintheformof
asupplementaryplainEnglishreportthatexplainshowthebusinesscompareswithothersinits
industry,itskeyfinancialstrengthsandweaknesses,howmuchadditionalprofittheevidenceshows
theyaremissingouton,andhowtheycanreclaimthosemissingprofits.
Thesesortsofreportscanbeproducedinminutesusingthenewbreedofpracticesupportsoftware
nowreadilyavailable.Andnotonlydotheydelivernewinsightsandrealvaluetoclients,butthese
newreportsalsodifferentiatetheaccountantsproducingthem.Asaresulttheymakeitmucheasier
forfirmstowinnewclients,keepexistingclientsandchargepremiumprices.
Worthwhileasthesetwosupplementaryreportsare,inouropiniontheydonotgofarenough.
WebelievetheprofessionneedsacompletelynewtypeofPerformanceMeasurementand
ImprovementSystem(‘PMISystem’)thatfollowsonfromwheretraditionalaccountsleaveoff.
ThisnewPMISystemapproachbuildsonwhataccountantshavealwaysdone–butstartswhere
traditionalaccountsfinish.Andessentiallyitisaneightstepcodificationofbestpractice.
PMI–The8stepstobestpracticeforbusinessowners
Step1 Decidewhatyouwanttoachieveintheyear–i.e.takeyourgoalsandplansandturnthem
intoforecastsandbudgets.
Step2 Measurehowwellyouactuallyperformeachmonth–usingacombinationoftraditional
managementaccountinginformationandotherkeyperformanceindicators,sothatyouhaveyour
fingeronthepulseofeverythingthatmatters.Andthenusethatinformationtofine‐tuneyour
actionplans.
Step3 Measureyourfullyear’sperformance–byproducingfullfinancialaccountsattheendof
theyear,asrequiredbylaw.
Step4 Evaluateyourperformancebycomparingtopreviousyears–sothattheunderlyingtrends
arecrystalclear.
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page30
Someaccountantsbelievethatthisisnottheirproblem.Afterall,theyargue,theyareproducing
fullycompliantaccounts,sowhyshouldtheydomore?Theanswerissimple…tostopthereistolet
clientsdown.Businessesdeserveandneedmorefromtheiraccountants.
Manyaccountantsarealreadyrisingtothischallengebyaddinga“FinancialPerformanceReview”to
theiraccounts–i.e.aplainEnglishsupplementaryreportcontaininggraphs,ratios,sensitivity
analysisandcommentary.
Andothersarealsoaddingbenchmarkinginformationtotheiraccounts–mostusuallyintheformof
asupplementaryplainEnglishreportthatexplainshowthebusinesscompareswithothersinits
industry,itskeyfinancialstrengthsandweaknesses,howmuchadditionalprofittheevidenceshows
theyaremissingouton,andhowtheycanreclaimthosemissingprofits.
Thesesortsofreportscanbeproducedinminutesusingthenewbreedofpracticesupportsoftware
nowreadilyavailable.Andnotonlydotheydelivernewinsightsandrealvaluetoclients,butthese
newreportsalsodifferentiatetheaccountantsproducingthem.Asaresulttheymakeitmucheasier
forfirmstowinnewclients,keepexistingclientsandchargepremiumprices.
Worthwhileasthesetwosupplementaryreportsare,inouropiniontheydonotgofarenough.
WebelievetheprofessionneedsacompletelynewtypeofPerformanceMeasurementand
ImprovementSystem(‘PMISystem’)thatfollowsonfromwheretraditionalaccountsleaveoff.
ThisnewPMISystemapproachbuildsonwhataccountantshavealwaysdone–butstartswhere
traditionalaccountsfinish.Andessentiallyitisaneightstepcodificationofbestpractice.
PMI–The8stepstobestpracticeforbusinessowners
Step1 Decidewhatyouwanttoachieveintheyear–i.e.takeyourgoalsandplansandturnthem
intoforecastsandbudgets.
Step2 Measurehowwellyouactuallyperformeachmonth–usingacombinationoftraditional
managementaccountinginformationandotherkeyperformanceindicators,sothatyouhaveyour
fingeronthepulseofeverythingthatmatters.Andthenusethatinformationtofine‐tuneyour
actionplans.
Step3 Measureyourfullyear’sperformance–byproducingfullfinancialaccountsattheendof
theyear,asrequiredbylaw.
Step4 Evaluateyourperformancebycomparingtopreviousyears–sothattheunderlyingtrends
arecrystalclear.
30www.myaccountantsclub.co.uk
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page32
Someofthekeynumbersarealittlelessobvious,suchashowmanyhoursyouhavetoworkaweek,
andhowmanyweeksholidayyoucantakeayear.
Andsomeofthekeynumberscanonlybemeasuredonamoresubjective1‐100scale,perhaps
includingcustomersatisfactionlevels,teammoraleandyourpersonalhappiness.
Buteverythingthatmatterscanbemeasuredbyanumber.And,here’sthereallyimportantpart,we
havenevermetabusinessthatdoesn’twanttochangesomeofthosenumbers–whetherit’sthe
numberofhourstheywork,thenumberofcustomerstheyhaveorthenumberofpoundnotesthey
haveinthebank.Everybusinesswantstochangethenumbers.
Soinouropinionthatiswhataccountantsshouldbedoing…usingtheirskillswithnumberstohelp
clientsmeasureandchange(i.e.improve)thenumbersthatmatter.Infact,tousitiswhat
accountancyactuallymeans–changingthenumbers.Notthroughcreativeaccounting,ofcourse.
Butbyusingourunderstandingofwhatliesbehindthenumberstohelpbringaboutrealchange.
Andthatiswhythe8stepPMISystemapproachissovaluabletoclients–becauseithelps
businessesunderstandandchangethenumbersthatreallymattertothem.
Itisalsowhyitissovaluabletotheaccountingprofession–sinceitbuildsonourmeasurement
skills,andappliesthemtotheareaswhereclientsreallyneedhelp.Theareaswhereclientscan’tdo
itthemselvesbypressingabuttoninSageoroutsourcingtoIndia.
Soitcreatesanexcitingandprofitablenewrolefortheprofession.Arolethatreallymakesa
difference.Aroletobeproudof.
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page31
Step5 Evaluateyourperformancebycomparingittotherestofyourindustry–using
benchmarkingtoidentifyyourstrengthsandweaknesses.
Step6 Estimatehowmuchyourbusinessisworth–sothatyoucanassesshowwellyouare
creatingvalue.
Step7 Calculatehowmuchmoreprofitableandvaluableyourbusinesscouldbe–useeverything
youhavelearnedaboutyourownperformanceandtheperformanceofotherstoestimatehow
muchmoresuccessfulyourbusinesscouldbe.
Step8 Developaperformanceimprovementplan–i.e.anactionplansettingoutpreciselywhat
youaregoingtodotoimproveyourperformance.
Ofcourse,someaccountantswillarguethattheyhelptheirclientsintheseeightwaysalready–and
thatmaybetrue.Butourviewisthatitisnotgoodenoughtobedoingitsomeofthetimeforsome
clients.Wehavetostartdoingitallofthetimeforeverysingleclient,becauseeverysingleclient
deservesthissortofinput,guidanceandsupport(suitablytailoredtotheirleveloffinancial
sophistication,ofcourse).
Allreallysuccessfulbusinessesrecognisethatthetraditionalprofitandlossaccountandbalance
sheetdoesnotgivethemenoughinformationtoreallydrivetheirbusinessesforward.Therefore,all
reallysuccessfulbusinessesalsomeasureotherKeySuccessDrivers(alsoknownasKeyPerformance
Indicatorsor‘KPIs’),sothattheycanreallyunderstandwhatishappeningwhilethereisstilltimeto
dosomethingaboutit.
Example
Theonlyinformationtraditionalmanagementaccountsgiveaboutsalesisthevalueofinvoices
raised.Butformanybusinessesthatkindofbackwardslooking“lagindicator”isnotveryusefulfor
understandingwhatisalreadyhappening,orpredictingwhatwillhappennext.
MuchmorehelpfulformanagingsalesareKeySuccessDriverssuchasthenumberofsalesleads,the
conversionratefromleadtosaleandthesizeoforderbooks.
SomostsuccessfulbusinessesnowsystematicallymapoutandmeasurethosekindsofKeySuccess
Driverstoo.
Whenyouthinkaboutit,justabouteverythingthatreallymattersinabusinesscanbemeasuredby
anumber.
Someofthosekeynumbersmaybeobvious,suchasthenumberofcustomers,sales,profitsand
yourtaxbills.
31www.myaccountantsclub.co.uk
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page32
Someofthekeynumbersarealittlelessobvious,suchashowmanyhoursyouhavetoworkaweek,
andhowmanyweeksholidayyoucantakeayear.
Andsomeofthekeynumberscanonlybemeasuredonamoresubjective1‐100scale,perhaps
includingcustomersatisfactionlevels,teammoraleandyourpersonalhappiness.
Buteverythingthatmatterscanbemeasuredbyanumber.And,here’sthereallyimportantpart,we
havenevermetabusinessthatdoesn’twanttochangesomeofthosenumbers–whetherit’sthe
numberofhourstheywork,thenumberofcustomerstheyhaveorthenumberofpoundnotesthey
haveinthebank.Everybusinesswantstochangethenumbers.
Soinouropinionthatiswhataccountantsshouldbedoing…usingtheirskillswithnumberstohelp
clientsmeasureandchange(i.e.improve)thenumbersthatmatter.Infact,tousitiswhat
accountancyactuallymeans–changingthenumbers.Notthroughcreativeaccounting,ofcourse.
Butbyusingourunderstandingofwhatliesbehindthenumberstohelpbringaboutrealchange.
Andthatiswhythe8stepPMISystemapproachissovaluabletoclients–becauseithelps
businessesunderstandandchangethenumbersthatreallymattertothem.
Itisalsowhyitissovaluabletotheaccountingprofession–sinceitbuildsonourmeasurement
skills,andappliesthemtotheareaswhereclientsreallyneedhelp.Theareaswhereclientscan’tdo
itthemselvesbypressingabuttoninSageoroutsourcingtoIndia.
Soitcreatesanexcitingandprofitablenewrolefortheprofession.Arolethatreallymakesa
difference.Aroletobeproudof.
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
32www.myaccountantsclub.co.uk
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page33
Betterpricing
Starfirms’clientsarelesspricesensitive
Asthefigurebelowillustrates,theStarsbelievethat20%oftheirfeescomefrompricesensitive
clientscomparedwith24%fortheLaggards.
Figure10:%ofclientswhoarehighlypricesensitive
OneofthepossiblereasonsforthisisthatStarfirmshavebetterclientselectioncriteria.Anotheris
thattheyarebetteratexplainingthevalue.Alternatively,ofcourse,sincethedifferencebetween
20%and24%issmall,itmaymerelybeaquirkofthedata.
Whatisparticularlyinterestingfromthesurveyiswhatthecontributingfirmslistedasthe
characteristicsofpricesensitivefirms.Ahandfulofrespondentssaidthattheirpricesensitiveclients
tendedtobesuccessful,lowmaintenanceandquickpayers.However,thevastmajoritypainteda
verydifferentpicture,describingpricesensitiveclientsas:
difficultanddemandingcomplainers,
withsmallandunprofitablebusinessesandlittleloyaltytothepractice,
wholackedvision,
hadnodesiretogrow,
wereonlyinterestedincomplianceservices,and
whowerenotagoodsourceofreferrals.
Thefigurebelowshowsthesefindingsgraphically:
33www.myaccountantsclub.co.uk
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Betterpricing
Starfirms’clientsarelesspricesensitive
Asthefigurebelowillustrates,theStarsbelievethat20%oftheirfeescomefrompricesensitive
clientscomparedwith24%fortheLaggards.
Figure10:%ofclientswhoarehighlypricesensitive
OneofthepossiblereasonsforthisisthatStarfirmshavebetterclientselectioncriteria.Anotheris
thattheyarebetteratexplainingthevalue.(Alternatively,ofcourse,sincethedifferencebetween
20%and24%issmall,itmaymerelybeaquirkofthedata.)
Whatwasparticularlyinterestingfromthesurveyarewhatthecontributingfirmslistedasthe
characteristicsofpricesensitivefirms.Ahandfulofrespondentssaidthattheirpricesensitiveclients
tendedtobesuccessful,lowmaintenanceandquickpayers.However,thevastmajoritypainteda
verydifferentpicture,describingpricesensitiveclientsas:
difficultanddemandingcomplainers,
withsmallandunprofitablebusinessesandlittleloyaltytothepractice,
wholackedvision,
hadnodesiretogrow,
wereonlyinterestedincomplianceservices,and
whowerenotagoodsourceofreferrals.
Thefigurebelowshowsthesefindingsgraphically:
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Figure11:Characteristicsofhighlypricesensitiveclients
Thisprovidesuswithaclearerpicturethaneverbeforeofwhatapricesensitiveclientnormally
lookslike.
Mostpeoplebuybaseduponvalueandnotprice
Itiswidelyacceptedthatoneofthekeystobuildingamoreprofitableaccountingpracticeistoonly
actforclientswhoappreciatethevalueyoubringandwhobuybasedonthatvalueandnotprice.
Thereforewewouldsuggestthatclientswhoexhibitthecharacteristicsintheaboveanalysisarenot
idealclients.Ifyouhaveclientswiththesecharacteristicsyoushouldeitherhaveaconversationwith
themaboutthevalueyoucanbringtothem(sincetheymightnotbepriceshoppers,theymight
insteadjustnotyethaveappreciatedthevaluetheygetfromyou),or–iftheyaregenuineprice
sensitiveclients,ratherthanvaluesensitive–findwaystomanagethemoutofyourpractice.
Keythoughts: Howprofitableareyourpricesensitiveclientswhenyoutakeintoaccountthe
timeandresourcestheyconsume?Howmanyofyourexistingclientsfityour
idealclientprofile?
Which3actionswillyoutaketoeitherupgradeormanageoutyourgenuinelypricesensitive
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Figure11:Characteristicsofhighlypricesensitiveclients
Thisprovidesuswithaclearerpicturethaneverbeforeofwhatapricesensitiveclientnormally
lookslike.
Mostpeoplebuybaseduponvalueandnotprice.
Itiswidelyacceptedthatoneofthekeystobuildingamoreprofitableaccountingpracticeistoonly
actforclientswhoappreciatethevalueyoubringandwhobuybasedonthatvalueandnotprice.
Thereforewewouldsuggestthatclientswhoexhibitthecharacteristicsintheaboveanalysisarenot
idealclients.Ifyouhaveclientswiththesecharacteristicsyoushouldeitherhaveaconversationwith
themaboutthevalueyoucanbringtothem(sincetheymightnotbepriceshoppers,theymight
insteadjustnotyethaveappreciatedthevaluetheygetfromyou),or–iftheyaregenuineprice
sensitiveclients,ratherthanvaluesensitive–findwaystomanagethemoutofyourpractice.
Keythoughts: Howprofitableareyourpricesensitiveclientswhenyoutakeintoaccountthe
timeandresourcestheyconsume?Howmanyofyourexistingclientsfityour
idealclientprofile?
Which3actionswillyoutaketoeitherupgradeormanageoutyourgenuinelypricesensitiveclients?
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clients?
1.
2.
3.
Starfirmshavefoundbetterwaystopricetheirservices
Thereareanumberofdifferentwaystoprice.Thetraditionalwayofpricingintheaccounting
professionhasbeentime‐basedpricing.Fixedpricing(e.g.unitpricing)andvaluepricing(e.g.results
pricingandcontingentpricing)aretheotherprimarymethods.Therearealsomanyvariationsof
thesesuchasblendedhourlyrates,fixedpriceplushourlyrates,retrospectivepricingandsoon.
Figure12:Howfeesarecalculated
Thesurveyresultsshowthat:
23%ofthefeesearnedbyStarsarebasedontimecosts,comparedto41%ofLaggards.
71%ofthefeesofStarsareagreedinadvanceandfixed,comparedtoonly50%ofLaggards.
12%ofthefeesofStarsarevaluebased,comparedtoonly8%ofLaggards.
(Somemethodsofcalculatingpricesarenotmutuallyexclusivehencetheapparentdiscrepancyintotalfees
forStars)
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
Figure12:Howfeesarecalculated
Completeresults:1‐Doyouwanttosubstantiallymakechangesasabove?
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Time‐costbasis Fixedprice Valuebased
Stars
Laggards
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Reducetheamount
of'overIme'you
workbeyonda
convenIonal9‐5?
Increasethenumber
ofclientsthefirm
has?
Increasetheaverage
feespaidperclient?
Reduce'lockup'–i.e.
debtors+Workin
progress?
Improveclient
service?
Yes
No
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Inotherwords,theStarsaremoreinclinedtogivefixedpricesinadvanceandaremorelikelytouse
valuepricingratherthantime‐basedpricing.
Baseduponourownresearchoverthelast10yearsandtheteachingsofpeoplelikeRonBaker,itis
ourviewthatthereisnoplaceintheaccountingprofessionfortime‐basedbilling.Timeandtime
againwehaveseenthatvaluepricing–whendonecorrectly–isafarsuperiorwayoftrulycapturing
valueandproperlyrewardingtheaccountant.
Keythought: Whatkindofpricingwouldyourclientsprefer?
Which3actionswillyoutaketoimprovetheeffectivenessofyourpricingstrategy?
1.
2.
3.
Starfirmsarebetteratgettingpaid
74%ofStarswantedtoreducetheir‘lockup’(i.e.workinprogressanddebtors),comparedto84%
ofLaggards.
Figure13
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ThissuggeststhatStarfirmsarebetteratmanagingtheirworkingcapital.Infact,weknowfrom
benchmarkingthattheaveragedebtordaysfigureforUKaccountingfirmsis70.8daysandyetthe
topquartileoffirmsgetthisdowntolessthan46days(seeAppendix2).Evenworse,thebottom
quartilehavedebtordaysofatleast93days,andatsomefirmsthefigureisover200days!So
clearlythereareveryrealdifferencesbetweentheperformanceoffirmsinthisarea.
Oneofthekeystothisisindicatedbyanothertellingfindingfromthesurvey;30%ofStars’feesare
collectedbystandingorder,comparedtoonly21%forLaggardsand23%ofStars’feesarecollected
byDirectDebit,comparedtoonly8%forLaggards.
Figure14
Figure15
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Inotherwords,theStarfirmshavefoundbetterwaysofgettingpaid.GettingpaidbyDirectDebitis
arguablythebestwayofgettingpaid,becausethewholeprocessisautomated.Andunlikestanding
orders,theamountscanbevaried.
Whatismore,thefactthatagreatmanyfirmsarealreadyusingDirectDebitsmeansthattherestof
theprofessioncannolongerhidebehindexcusessuchas“accountantscan’tusedirectdebits”or
“businessesaren’twillingtopaythatway.”
Keythoughts: Whatisthedebtordaysfigureforyourpractice?Whatpaymentmethodscould
youusethatyouaren’talreadyofferingyourclients?
Which3actionswillyoutaketoreducedebtordaysandgetpaidmorequickly?
1.
2.
3.
StarsandLaggardsbothwanttoearnhigheraveragefees
Almosteveryfirmofaccountantswespeakwithwantsbetterclients.Andby‘betterclients’they
usuallyciteoneormoreofthefollowingcharacteristics:
Clientswhoareeithercorporateclientsorhighnetworthindividuals
Clientswhosebusinessesaregrowing
Clientswhoareopentoaddedvalueservicessuchastaxplanningandprofitimprovement
advice
Clientswithhigherfees
Toattractthesesortsofclients–sometimesreferredtoas‘jewel‐box’clients–wehavetobecome
betteratgivingtheseclientswhattheywant.Thesesortsofclientstypicallywantmoremeetings,
morehelp,moreadvice,andaccesstoadvancedtaxplanningandprofitimprovementhelp.
Whattheydon’twantisacheapaccountant!
Theyappreciatevalueandtheywillpayforvalue.
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Andsince93%ofStarsand91%ofLaggardssaidthattheywantedtoincreasetheaveragefeesthey
earnperclient,itisclearthatbothgroupsneedtofocusevenmoredeterminedlyondoingthe
thingsthatclientsseeassufficientlyvaluabletojustifypayinghigherfees.
Figure16
Figure17
Muchthesamepointappliestotherelatedfindingthat72%ofStarsand68%ofLaggardswantto
attractmoreclients.Inordertoattractmoreclientsathigherfeesbothgroupsneedtomake
themselvesmoreattractiveby(a)doingmoreofthethingsgoodclientsreallywant,and(b)
communicatingthefactmoreeffectivelythroughtheirsalesandmarketingsystems.
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Keythoughts: Howmanyofyourexistingclientsfallintothesecategories?Whatcouldyoudoto
increasethevalueofyourofferingtothemandthusincreasethefeestheypay?
Which3actionswillyoutaketojustifyhigherfeesandattractmore‘jewel‐box’clients?
1.
2.
3.
Starfirmsdon’tcompeteonprice
Asthefigurebelowillustrates,only7%ofStarsareworriedbythethreatfromunqualifiedandcheap
accountants,comparedto25%ofLaggards.
Figure18
Therearemanyunqualifiedandcheapaccountantsoutthere.They’recheapbecausetheyknowthe
valueofwhattheydo.
It’sgreatnewsthattheyareoutthere!Theywillhappilytakeyourpricesensitiveclientsoffyou...
thoseclientsthatdonotfityouridealclientprofile.
Don’tworryaboutthoseunqualifiedandcheapaccountants.Anddon’tcompeteonprice.It’sa
dangerousgame.
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Insteadfocusonyouridealclients.Focusonaddingmorevaluetotherightclients.Focusonbetter
explainingthevaluetothoseclientssothattheyfullyunderstandthebenefittothemofwhatyou
do.Andfocusonlinkingyourpricetothevaluesothatyouareabletochargepremiumfees.
It’saprovenformulaforbuildingamoreprofitableaccountingpractice.
Keythought: Howdoyoucommunicatethevalueofyourservicestoclientsandprospects?
Which3actionswillyoutaketoaddmorevaluetoyouridealclients?
1.
2.
3.
Howbadpricingleadstoharmfulcompromises
Notchargingenoughleadstothreetypesofharmfulcompromise…
Compromisedfinancially–Eitherthepractitionersettlesforearningless,whichmeansthatthey
andtheirfamily’sfinancialsecurityandprospectsarecompromisedandharmed.Or,
Compromisedpersonally–Thepractitionerattemptstorectifymattersbyworkinglongerhoursand
doingmoreoftheworkhimself,ratherthanpayingotherstodoit–whichcompromisesandharms
hislife‐workbalance,thetimeheisabletospendwithhisfamily,andperhapsevenhishealth.Or,
Compromisedclientservice–Thepractitionercutscornersonserviceinordertokeepthings
“withinbudget”–compromisingandharmingtheinterestsofhisclients.
Sadly,theevidencesuggeststhatpractitionersarebeingforcedtomakeallthreeofthese
compromises,andasaresultthey,theirfamiliesandtheirclientsarealllosingout.Forexample:
1. Financialcompromisesevidence–Evidenceelsewheresuggeststhatoverhalfofallaccountants
aremakingwhateconomistswouldregardaslosses.Whichispresumablywhy92%ofLaggards
inthissurveyarenothappywiththeirresults.
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2. Personalcompromisesevidence–2010researchbytheCharteredAccountants’Benevolent
Associationfoundthat82%ofaccountantssufferfromstress,77%thinktheyworktoomany
hours,and71%saythattheirlife‐workbalanceisaproblem.Inaddition,inoursurvey70%of
Starsand62%ofLaggardssaidtheywantedtoimprovetheirlife‐workbalance.Thereforeitis
clearthatthemajorityofpractitionersareworkingtoohard,andthatforthesakeoftheirhealth
andhappinesstheyneedtofindbetterwaysofrunningtheirbusinesses.Itwouldalsoappear
thatsomeStarsareachievingtheirsuccessbyworkingharderratherthanworkingsmarter.
3. Servicecompromisesevidence–March2010researchbyCCHfoundthat36%ofclientsarenot
highlysatisfiedwiththetaxservicetheygetfromtheiraccountants.Inaddition,ofcourse,we
sawearlierinthissurveythat65%ofLaggardsrecognisetheneedtoimproveclientservice,and
thatservicefailuresappeartobecostingclientsastaggering£1.8billion.
Whytheprofessionmuststopbeingcheap
Thebiggestcauseofnotearningenoughisnotchargingenough.Itreallyisthatsimple.Afterall,on
ajobbyjobandclientbyclientbasis,profitisthedifferencebetweenwhatyouchargeandwhatit
costs.
Similarly,thebiggestcauseofnotdeliveringexcellentserviceisnotchargingenough–sinceifthere
isn’tabigenoughfee,therewon’tbeabigenoughbudgettoservetheclientproperly.
Generallymostaccountantshavegotaprettygoodhandleontheircosts,butit’sthepricingside
thatreallymessesthingsupforthem.
Andwhentheychargehigherprices,thingsgetbetter.
“Butsurely”,you’llsay,“wecan’tchargemorethanthemarketprice,canwe?”Theanswertowhich
isaresounding“yesyoucan”,becauseofthefollowingincrediblyliberatingfact...
Thereisnosuchthingas“themarketprice”foraccountancyservices
Thereisnosuchthingasthemarketpriceintheory.Andtheevidenceshowsthatthereisalsono
suchthinginrealityeither.Letmeexplain.
Economiststellusthatinaperfectmarket(i.e.wheretherearealargenumberofsuppliersselling
identicalproducts,withnoswitchingcosts,toconsumerswhohaveperfectinformationandmake
perfectlyrationalchoices)therewillbeasinglemarketprice.Butitiscrystalclearthataccountancy
isnothinglikethattypeoftextbookperfectmarket.
Inthemarketforaccountancyservices:mostfirmshavetheirownwaysofdoingthings;serviceisall
aboutpeople,andclientscanonlygetyourpeoplefromyourfirm;clientsrarelyhavetheskillsor
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informationtoproperlycompareandcontrastdifferentfirms;andthereislittletransparencyover
pricing.Consequentlydecisionstoappointandsackaccountantsareofteninevitablymadeon
emotionalratherthanperfectlyrationalgrounds.
Andinthattypeofmarket,accordingtoeconomists,therewillbenosuchthingasthemarketprice.
Insteadwhatweshouldseeisthatpricesaresetbyaccountantsnotbythemarket,andthatasa
resulttherewillbeverybigdifferencesbetweenwhatdifferentfirmscharge.
Tellingly,thatisexactlywhattheOctober2010studyofthepricesactuallychargedby180UKsmall
independentaccountingpracticesfound:verybigdifferencesbetweenwhatdifferentfirmscharge.
Forexample,whenlookingatthepricechargedfortwocommonservicesofferedbyalmostevery
accountant,thestudyfoundthatthetophalfoffirmssuccessfullychargearoundtwiceasmuchas
thebottomhalf,asthefollowingtableshows:
QuartilesPricechargedforasimple
self‐employedtaxreturn
Pricechargedforasimple
incorporationwithno
goodwillcapitalisation
Thebottom25%offirms
charged
£75‐£250 £100‐£300
Thebelowaverage25%of
firmscharged
£250‐£350 £300‐£500
Theaboveaverage25%of
firmscharged
£350‐450 £500‐£1,000
Thetop25%offirms
charged
£450‐£1,000 £1,000‐£4,500
Table4
Source:“Yourblueprintforabettertaxpractice”–StevePipeFCAandMarkWickershamFCA–
Surveyof180independentUKaccountancypractices–October2010
Thetablefocusesontwoparticulartypesofservices,butthefindingswerethesameforallthe
servicesstudiedbytheresearchteam.Andtheconclusionsarecrystalclear:
1. Thereisnosinglemarketpriceforanyserviceprovidedbyaccountants
2. InsteadthepriceschargedarespreadevenlyoveraVERYwiderange
3. Thetophalfoffirmssuccessfullychargearoundtwiceasmuchasthebottomhalf
Clearly,marketsdonotsetprices,accountantsdo.Andsomeaccountantsareverymuchbetteratit
thanothers.Asaresultsomeaccountantsareabletochargemuchhigherprices.
Wemuststopcomplacentlyandmistakenlybelievingthatthereisasinglepricesetbythemarket.
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Wemustrecognisethatwearesolelyresponsibleforourprices.Wemuststarttorisetothe
challengeofchargingmorebypricingproperly.Andwemuststoptakingtheeasyoptionof“last
year’sfeeplusinflation”,sincethatjustmeanswekeeprepeatingthesamemistakesyearafteryear.
Butsurely,wefrequentlyhearfirmsrespond,noteveryclientiswillingtopaybigfees.
Thatstatement,however,isbothfactuallycorrectandirrelevant.
Itdoesn’treallymatterwhethereveryclientisupforit.Theonlythingthatmattersiswhether
ENOUGHclientsareupforit.Andthatisaquestionofsimplemathematics.
ObviouslywehavenoideawhatyourP&Laccountcurrentlylookslike,sowecanonlydothemaths
fortheaveragepartner,andleaveittoyoutoreplacetheseaverageswithyourownnumbers.
Theaveragepartner’sP&Laccount
Beforepriceincrease
Afterincreasingpricesby20%
andlosing10%ofclientsNote1
Fees £247,000 £266,760 Note2
Costs £169,000 £155,480 Note3
Profit £78,000 £111,280
Table5
Note1:Thereisnothingmagicalaboutthe20%and10%.Theyaremerelymathematicalexamples
andarenotrecommendationsorbenchmarks.
Note2:Mostfirmsfindthattheylosemuchlessthan10%oftheirclientswhentheyincreasetheir
pricesby20%,butwehaveassumeda10%lossforprudence.
Note3:Inthemediumtolongrunmostpracticecostsarevariable(i.e.youcanmovetobiggeror
smallerpremises,andemploymoreorfewerpeopleasthesizeofthepracticechanges).So
asthepracticeloses10%ofitsclientsandworkloaditwill,induecourse,beabletoshave
10%offmanyofitscosts.Buttobeprudentwehaveassumedtheyareonlyabletoreduce
costsby8%.
Asthemathsaboveshow,iftheaveragepartnerweretoincreasepricesby20%,andasa
consequencelose10%ofclients,thentheywouldendupbeing£33,280ayearbetteroff.Which
overa25yearcareeraddsuptoanextra£832,000inprofitsforthepartnerandhisfamily.
Andprovidedhedoesn’tlosemorethanc.30%ofhisclients,thenhewillstillbefinanciallybetter
offafterthepriceincrease.
Betterstill,notonlywouldtheaveragepartnerbe£832,000betteroff,buttheywouldalsohavea
betterlife‐workbalance–sincewithfewerclientstheywon’thavetoworksohardorsolong,and
willgetmoretimeofftoenjoyalltheirextramoney.
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Butisn’tchargingmore“rippingclientsoff”?
No.No.No.
BMWaren’trippingyourclientoffwhentheychoosetobuyoneoftheircarsfortwotimestheprice
ofabroadlysimilarFord.Starbucksaren’trippingyourclientsoffwhentheychoosetobuyacupof
coffeeattwicewhattheycouldpayelsewhere,and10timesthecostofmakingitathome.Andthe
localprivateschoolisn’trippingyourclientsoffwhentheychoosetosendtheirchildrenthererather
thantothelocalcomprehensive.
Thepointisthis:yourclientsarealwayschoosingtopaymorethanthebareminimumforthings–
providedthattheybelievetheyareworthpayingmorefor.
Iftheychoosetoacceptyourhigherpricesthatisbecausetheyfeelyourservicesareworthpaying
morefor–justasallthoseclientsofthefirmsinthetophalfofTable4feelthattheiraccountant’s
servicesareworthpayingmoreforthanthoseinthebottomhalf.
Ontheotherhand,iftheychoosenottoacceptyourhigherpricesthatisgivingyouhugelyuseful
feedback–i.e.thatyourclientsdonotbelieveyouareworththeextramoney.Andonceyouknow
thatyoucan,ofcourse,startworkingoutwhatyouaregoingtodoaboutit.
But,eitherway,howcanyoupossiblybe“rippingthemoff”?Infact,tosuggestthatitisripping
clientsoffistantamounttotreatingthemasmorons.
Clientsaren’tstupid.Theyknowwhat’swhat.Theyknowwhattheywant.Andtheyknowtheyarein
thedrivingseat.
Youcan’thoodwinkthem.Andtheydon’tsufferfoolsgladly.
So,ifwebelievethatwhentheyagreetopayabiggerfeetofirmXthantheycouldhavepaidtofirm
Y,firmXisrippingthemoff,weareinsultingthem.Weare,ineffect,callingthemstupidforpaying
more,andsayingthattheydon’tmakegoodbusinessdecisions.
Wewouldneverdreamofcriticisingtheminthiswayforchoosingtobuyamoreexpensivecar,
houseoreducationfortheirchildren.Sohowdarewecriticisethemwhentheychoosetopaymore
foraccountancyservicesthattheyreallyvalue?
Thebottomlineisclear…ifyouwanttoserveclientsbetter,andearnmoreforyourselfinthe
process,youneedtoworkouthowtochargemore.
Keythought: Whatcouldyoudotoincreaseperceivedvalueintheeyesofyourclients?
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Butisn’tchargingmore“rippingclientsoff”?
No.No.No.
BMWaren’trippingyourclientoffwhentheychoosetobuyoneoftheircarsfortwotimestheprice
ofabroadlysimilarFord.Starbucksaren’trippingyourclientsoffwhentheychoosetobuyacupof
coffeeattwicewhattheycouldpayelsewhere,and10timesthecostofmakingitathome.Andthe
localprivateschoolisn’trippingyourclientsoffwhentheychoosetosendtheirchildrenthererather
thantothelocalcomprehensive.
Thepointisthis:yourclientsarealwayschoosingtopaymorethanthebareminimumforthings–
providedthattheybelievetheyareworthpayingmorefor.
Iftheychoosetoacceptyourhigherpricesthatisbecausetheyfeelyourservicesareworthpaying
morefor–justasallthoseclientsofthefirmsinthetophalfofTable4feelthattheiraccountant’s
servicesareworthpayingmoreforthanthoseinthebottomhalf.
Ontheotherhand,iftheychoosenottoacceptyourhigherpricesthatisgivingyouhugelyuseful
feedback–i.e.thatyourclientsdonotbelieveyouareworththeextramoney.Andonceyouknow
thatyoucan,ofcourse,startworkingoutwhatyouaregoingtodoaboutit.
But,eitherway,howcanyoupossiblybe“rippingthemoff”?Infact,tosuggestthatitisripping
clientsoffistantamounttotreatingthemasmorons.
Clientsaren’tstupid.Theyknowwhat’swhat.Theyknowwhattheywant.Andtheyknowtheyarein
thedrivingseat.
Youcan’thoodwinkthem.Andtheydon’tsufferfoolsgladly.
So,ifwebelievethatwhentheyagreetopayabiggerfeetofirmXthantheycouldhavepaidtofirm
Y,firmXisrippingthemoff,weareinsultingthem.Weare,ineffect,callingthemstupidforpaying
more,andsayingthattheydon’tmakegoodbusinessdecisions.
Wewouldneverdreamofcriticisingtheminthiswayforchoosingtobuyamoreexpensivecar,
houseoreducationfortheirchildren.Sohowdarewecriticisethemwhentheychoosetopaymore
foraccountancyservicesthattheyreallyvalue?
Thebottomlineisclear…ifyouwanttoserveclientsbetter,andearnmoreforyourselfinthe
process,youneedtoworkouthowtochargemore.
Keythought: Whatcouldyoudotoincreaseperceivedvalueintheeyesofyourclients?
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Which3actionswillyoutakeinordertobeabletochargehigherprices?
1.
2.
3.
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Butisn’tchargingmore“rippingclientsoff”?
No.No.No.
BMWaren’trippingyourclientoffwhentheychoosetobuyoneoftheircarsfortwotimestheprice
ofabroadlysimilarFord.Starbucksaren’trippingyourclientsoffwhentheychoosetobuyacupof
coffeeattwicewhattheycouldpayelsewhere,and10timesthecostofmakingitathome.Andthe
localprivateschoolisn’trippingyourclientsoffwhentheychoosetosendtheirchildrenthererather
thantothelocalcomprehensive.
Thepointisthis:yourclientsarealwayschoosingtopaymorethanthebareminimumforthings–
providedthattheybelievetheyareworthpayingmorefor.
Iftheychoosetoacceptyourhigherpricesthatisbecausetheyfeelyourservicesareworthpaying
morefor–justasallthoseclientsofthefirmsinthetophalfofTable4feelthattheiraccountant’s
servicesareworthpayingmoreforthanthoseinthebottomhalf.
Ontheotherhand,iftheychoosenottoacceptyourhigherpricesthatisgivingyouhugelyuseful
feedback–i.e.thatyourclientsdonotbelieveyouareworththeextramoney.Andonceyouknow
thatyoucan,ofcourse,startworkingoutwhatyouaregoingtodoaboutit.
But,eitherway,howcanyoupossiblybe“rippingthemoff”?Infact,tosuggestthatitisripping
clientsoffistantamounttotreatingthemasmorons.
Clientsaren’tstupid.Theyknowwhat’swhat.Theyknowwhattheywant.Andtheyknowtheyarein
thedrivingseat.
Youcan’thoodwinkthem.Andtheydon’tsufferfoolsgladly.
So,ifwebelievethatwhentheyagreetopayabiggerfeetofirmXthantheycouldhavepaidtofirm
Y,firmXisrippingthemoff,weareinsultingthem.Weare,ineffect,callingthemstupidforpaying
more,andsayingthattheydon’tmakegoodbusinessdecisions.
Wewouldneverdreamofcriticisingtheminthiswayforchoosingtobuyamoreexpensivecar,
houseoreducationfortheirchildren.Sohowdarewecriticisethemwhentheychoosetopaymore
foraccountancyservicesthattheyreallyvalue?
Thebottomlineisclear…ifyouwanttoserveclientsbetter,andearnmoreforyourselfinthe
process,youneedtoworkouthowtochargemore.
Keythought: Whatcouldyoudotoincreaseperceivedvalueintheeyesofyourclients?
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Betterteamengagement
Gettingtherightpeopleonthebus
Researchfrommanyquartersovermanyyearsconsistentlyshowsthatthepeoplewhomakeupan
organisationareoneofthemostsignificantfactorsinthatorganisation’ssuccessorfailure.
Everywherefromthebiggestglobalcorporationtothesmallestaccountancyfirm,theattitude,
engagementandhappinessoftheteamareascrucialastheproductsandservicesprovidedandthe
pricescharged.
Inhis2001bookPracticeWhatYouPreach,DavidMaistershowedthatthecorrelationbetweena
firm’sperformanceandtheattitudesoftheteamisunmistakeable.Themostfinanciallysuccessful
businessesdobetterthantherestonvirtuallyeveryaspectofemployeeattitudes,andthosethatdo
bestonemployeeattitudesaremeasurablymoreprofitable.
Evenmoresignificantly,Maister’sresearchshowsthatitisattitudesthatdrivefinancialresults,not
theotherwayround.Somuchso,infact,thata10to15%increaseinthescoresgivenbyemployees
totheelementsofemployeesatisfactionresultina42.06%increaseinfinancialperformance.
Whatoursurveyshowsisthatwhenitcomestocreatingtherightteam,fromtherecruitment
processonwards,theStarsdon’tleaveittochance.36%ofStarsusepersonalprofiling(suchasthe
DISCsystemorMyersBriggs)whenrecruitingnewteammembers,comparedtoonly14%of
Laggards.
Figure19
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Therearemanymisconceptionsaboutpersonalprofiling,butinessenceithelpsyoutounderstand
thedifferenttypesofbehaviouryouwillseeamongstteammembers,anddiscoverhowto
communicatebetterwiththemasaresult.Thereisno‘good’or‘bad’profileandthemosteffective
teamswillincludeawellbalancedmixofdifferenttypes.Traditionally,recruitmentisoftendoneby
instinct(nottomentionfirstimpressions)anditcanbetemptingtorecruitonaPLUbasis–i.e.
recruiting‘peoplelikeus’–resultinginateamwithsimilarstrengthsandweaknessesandtherefore
amorelimitedabilitytoadapttochangingcircumstancesandnewopportunities.
Asprettymuchanyoneinbusinesswilltestify,thecostsofrecruitingthewrongpeoplearehigh.As
wellasfinancialconsiderations(particularlyifyouusearecruitmentconsultancy)teammorale
suffersandyoucanspendagreatdealoftimetryingtomakethesituationbetterandtheneven
moretimerecruitingsomeoneelseifitdoesn’tworkout.Personalprofilingreducestherisk,and
expense,ofgettingitwrong.
InGoodtoGreat,astudyof11companiesthatoutperformedtheUSstockmarket(byatleast3
times)overaperiodof15years,JimCollinsanalysedthefactorsthatwerecommontothesuccess
ofallofthem.
Oneofthekeyfactorswasthattheexecutives‘firstgottherightpeopleonthebus(andthewrong
peopleoffthebus)andthenfiguredoutwheretodriveit.’
GoodtoGreat,JimCollins,2001
Puttingproperrecruitmentsystemsinplacealsohelpstoreducetheriskofmistakes.Aneffective
recruitmentsystemwillincludenotonlythetechnicalskillsrequiredforthejobbutalsothetypeof
personwhowillfitintotheteamaswhole.AsJimCollinssays‘Whethersomeoneisthe‘right
person’hasmoretodowithcharactertraitsandinnatecapabilitiesthanwithspecificknowledge,
backgroundorskills.’
Keythought: Howcanyoumakethebestuseofpersonalprofilinginyourfirm?
Which3actionswillyoutaketo‘gettherightpeopleonthebus’andbuildawellbalancedteam?
1.
2.
3.
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Thosewithemployeeengagementscoresinthebottomquartileaveraged31–51%more
employeeturnover,51%moreinventoryshrinkageand62%moreaccidents.
Thosewithemployeeengagementscoresinthetopquartileaveraged12%highercustomer
advocacy,18%higherproductivityand12%higherprofitability.
AsecondGallupstudyofthesameyearofearningspershare(EPS)growthof89organisationsfound
thattheEPSgrowthrateoforganisationswithengagementscoresinthetopquartilewas2.6times
thatoforganisationswithbelow‐averageengagementscores.
Harter,J.K.etal(2006),GallupQ12Meta‐Analysis.GallupOrganisation(2006).‘Engagementpredictsearnings
pershare’.
QuotedinEngagingforsuccess:Enhancingperformancethroughemployeeengagement–DavidMacleodand
NitaClarke–ReporttoGovernment2009.http://www.bis.gov.uk/files/file52215.pdf
Keythoughts: Areyoucompletelyclearaboutthepurposeandvisionofyourfirm?How
effectiveareyouatcommunicatingittoothers?
Which3actionswillyoutaketoensurethatyourentireteamfullyunderstandandbuyintoyour
vision?
1.
2.
3.
StarssharetheirKPIswiththeirentireteam
Perhapsevenmoresignificantly,76%ofStarssharemostoftheirKeyPerformanceIndicators(KPIs)
withtheentireteam,comparedto47%ofLaggards.
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Starscommunicatetheirvision
ThesurveyrevealsmoredifferencesbetweenStarsandLaggardswhenwelookathowtheyengage
withexistingteammembers.
Tellingly,74%ofStarshaveensuredthattheirentireteamfullyunderstandstheowner’svisionfor
thepractice,comparedtoonly50%ofLaggards.Withoutthisunderstanding,it’simpossibleforteam
memberstogive100%commitment;afterall,theydon’tknowwherethepracticeisgoingandwhy,
howtheyfitintotheschemeofthingsorwhatcontributiontheycanmake.
Figure20
Again,Starsdon’tleavethistochance;theydon’tmaketheassumptionthateveryoneknowswhat
thevisionis,theygooutoftheirwaytocommunicateittotheteam.Teamengagementlevelsare
proventoplayanimportantpartinoverallresultsandsharingyourvisioniskeytobringingyour
teamwithyou.Theresultsthatcomefromastrongteampullingtogetherarealwaysgoingtobe
betterthanonepersontryingtoforgeaheadbythemselves,sothisissomethingthatcannotbe
overlooked.
In2006aGalluppollof23,910businessescomparedfinancialperformancewithemployee
engagementscores(wherehighscoresmeanthatemployeesarecommittedtotheirorganisation’s
goalsandvalues,motivatedtocontributetoorganisationalsuccess,andareableatthesametimeto
enhancetheirownsenseofwell‐being).Theyfoundthat:
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Figure21
Infirmswheretheteamdon’thaveaccesstothiskindofinformation,theyarequitesimplyworking
inthedark.Iftheydon’tknowwhichprocessesandsystemsaresuccessfulandwhichonesare
failing,howwilltheyknowwheretofocustheirenergies?Anyimprovementswillbeaccidental
ratherthansystematic.What’smore,acultureofsecrecythatleavessometeammembersfeeling
excludedisabreedinggroundforrumourandbadfeeling–asure‐firewaytoreducemotivationand
productivity.
Keythought: Wouldyourteammakebetterdecisionsandtakebetteractionsifthey
understoodmoreaboutyourKPIs?
Which3actionswillyoutaketomakeyourentireteamawareoftheKPIsthatmattertothem?
1.
2.
3.
StarsmeasurenonfinancialKPIs
ThereislessofagapintermsofmeasuringKPIsthatdon’tcomefromatraditionalsetofaccounts.
63%ofStarsregularlymeasuresuchKPIs,against57%ofLaggards,indicatingthatthereisafairly
widespreadacknowledgementamongstaccountancypracticesthatmorethanjustthefinancial
figuresareimportant.Forexample,KPIsofteamhappiness(seenextsectionbelow),teamlearning,
numberofprospectmeetingsandconversionratesarealllikelytohaveamajorinfluenceonyour
results.
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Thosewithemployeeengagementscoresinthebottomquartileaveraged31–51%more
employeeturnover,51%moreinventoryshrinkageand62%moreaccidents.
Thosewithemployeeengagementscoresinthetopquartileaveraged12%highercustomer
advocacy,18%higherproductivityand12%higherprofitability.
AsecondGallupstudyofthesameyearofearningspershare(EPS)growthof89organisationsfound
thattheEPSgrowthrateoforganisationswithengagementscoresinthetopquartilewas2.6times
thatoforganisationswithbelow‐averageengagementscores.
Harter,J.K.etal(2006),GallupQ12Meta‐Analysis.GallupOrganisation(2006).‘Engagementpredictsearnings
pershare’.
QuotedinEngagingforsuccess:Enhancingperformancethroughemployeeengagement–DavidMacleodand
NitaClarke–ReporttoGovernment2009.http://www.bis.gov.uk/files/file52215.pdf
Keythoughts: Areyoucompletelyclearaboutthepurposeandvisionofyourfirm?How
effectiveareyouatcommunicatingittoothers?
Which3actionswillyoutaketoensurethatyourentireteamfullyunderstandandbuyintoyour
vision?
1.
2.
3.
StarssharetheirKPIswiththeirentireteam
Perhapsevenmoresignificantly,76%ofStarssharemostoftheirKeyPerformanceIndicators(KPIs)
withtheentireteam,comparedto47%ofLaggards.
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Figure21
Infirmswheretheteamdon’thaveaccesstothiskindofinformation,theyarequitesimplyworking
inthedark.Iftheydon’tknowwhichprocessesandsystemsaresuccessfulandwhichonesare
failing,howwilltheyknowwheretofocustheirenergies?Anyimprovementswillbeaccidental
ratherthansystematic.What’smore,acultureofsecrecythatleavessometeammembersfeeling
excludedisabreedinggroundforrumourandbadfeeling–asure‐firewaytoreducemotivationand
productivity.
Keythought: Wouldyourteammakebetterdecisionsandtakebetteractionsifthey
understoodmoreaboutyourKPIs?
Which3actionswillyoutaketomakeyourentireteamawareoftheKPIsthatmattertothem?
1.
2.
3.
StarsmeasurenonfinancialKPIs
ThereislessofagapintermsofmeasuringKPIsthatdon’tcomefromatraditionalsetofaccounts.
63%ofStarsregularlymeasuresuchKPIs,against57%ofLaggards,indicatingthatthereisafairly
widespreadacknowledgementamongstaccountancypracticesthatmorethanjustthefinancial
figuresareimportant.Forexample,KPIsofteamhappiness(seenextsectionbelow),teamlearning,
numberofprospectmeetingsandconversionratesarealllikelytohaveamajorinfluenceonyour
results.
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Figure21
Infirmswheretheteamdon’thaveaccesstothiskindofinformation,theyarequitesimplyworking
inthedark.Iftheydon’tknowwhichprocessesandsystemsaresuccessfulandwhichonesare
failing,howwilltheyknowwheretofocustheirenergies?Anyimprovementswillbeaccidental
ratherthansystematic.What’smore,acultureofsecrecythatleavessometeammembersfeeling
excludedisabreedinggroundforrumourandbadfeeling–asure‐firewaytoreducemotivationand
productivity.
Keythought: Wouldyourteammakebetterdecisionsandtakebetteractionsifthey
understoodmoreaboutyourKPIs?
Which3actionswillyoutaketomakeyourentireteamawareoftheKPIsthatmattertothem?
1.
2.
3.
Starsmeasurenon‐financialKPIs
ThereislessofagapintermsofmeasuringKPIsthatdon’tcomefromatraditionalsetofaccounts.
63%ofStarsregularlymeasuresuchKPIs,against57%ofLaggards,indicatingthatthereisafairly
widespreadacknowledgementamongstaccountancypracticesthatmorethanjustthefinancial
figuresareimportant.Forexample,KPIsofteamhappiness(seenextsectionbelow),teamlearning,
numberofprospectmeetingsandconversionratesarealllikelytohaveamajorinfluenceonyour
results.
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Figure22
WheretheLaggardsfailhowever,isonfollowingthroughandcommunicatingthistotheirteam(see
Figure21above).IfKPIsareworthmeasuring,they’reworthsharingtoo.Afterall,theywillhavean
impactontheentireteam.TorepeatDavidMaister’sfindingsagain,teamattitudesaffectfinancial
performance,nottheotherwayround
Keythought: WhatadditionalKPIscouldhelpyourfirmbemoreeffective?
Which3actionswillyoutaketoidentifyandmeasurenon‐financialKPIs?
1.
2.
3.
Starsmeasureteamhappiness
In2011,accountantsrespondingtothesurveyfortheWhitePaper:Thebiggestchallengesfacing
theaccountancyprofessionoverthenextfiveyears(seeAppendix1)citedthatgetting,keepingand
motivatingtherightteamwasoneoftheirkeyissues.
Itisalongstandingcomplaint–whatevertheeconomicclimate–thatfindingtherightpeopleand
thenhangingontothemisverydifficulttodo.
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Figure4
WheretheLaggardsfailhowever,isonfollowingthroughandcommunicatingthistotheirteam(see
Figure21above).IfKPIsareworthmeasuring,they’reworthsharingtoo.Afterall,theywillhavean
impactontheentireteam.TorepeatDavidMaister’sfindingsagain,teamattitudesaffectfinancial
performance,nottheotherwayround
Keythought: WhatadditionalKPIscouldhelpyourfirmbemoreeffective?
Which3actionswillyoutaketoidentifyandmeasurenon‐financialKPIs?
1.
2.
3.
Starsmeasureteamhappiness
In2011,accountantsrespondingtothesurveyfortheWhitePaper:Thebiggestchallengesfacing
theaccountancyprofessionoverthenextfiveyears(seeAppendix1)citedthatgetting,keepingand
motivatingtherightteamwasoneoftheirkeyissues.
Itisalongstandingcomplaint–whatevertheeconomicclimate–thatfindingtherightpeopleand
thenhangingontothemisverydifficulttodo.
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Onceagain,intheBlueprintsurveytheStarsdemonstratedthattheytakeactiononteamwelfare,
with57%measuringthehappinessoftheirteamdaily,weeklyormonthly,comparedtoonly31%of
Laggards.
Figure23
Teamhappinessmaysoundtoo‘touchyfeely’tobesomethingthatcanbeeasilyquantifiedbut
thereareseveralsoftwarepackagesavailablethatenableyoutodoexactlythat.Evenapaper‐based
systemwouldwork;asimplescorechartandspacetomakeanycommentsisallthat’sneeded.
It’salltooeasytothinkthatyouknowhowthepeopleinyourteamarefeeling,butunlessyouask
them,you’rereallyjustguessing.Andgivingthemthespacetosaywhat’smakingthemhappyor
unhappyisequallyimportantsoyoucandomoreoftheformerandlessofthelatter!Ofcourse,
measuringisonlythefirststep;lowscoresrequirefurtheractionasamatterofurgencyoritwillbe
obvioustoallteammembersthatit’sjustacosmeticexercise.
Keythought: Whichfactorsinfluencethehappinessofyourteam?
Which3actionswillyoutaketostartmeasuringand/orincreasingteamhappiness?
1.
2.
3.
Starshavemoreteammeetings
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Onceagain,intheBlueprintsurveytheStarsdemonstratedthattheytakeactiononteamwelfare,
with57%measuringthehappinessoftheirteamdaily,weeklyormonthly,comparedtoonly31%of
Laggards.
Figure23
Teamhappinessmaysoundtoo‘touchyfeely’tobesomethingthatcanbeeasilyquantifiedbut
thereareseveralsoftwarepackagesavailablethatenableyoutodoexactlythat.Evenapaper‐based
systemwouldwork;asimplescorechartandspacetomakeanycommentsisallthat’sneeded.
It’salltooeasytothinkthatyouknowhowthepeopleinyourteamarefeeling,butunlessyouask
them,you’rereallyjustguessing.Andgivingthemthespacetosaywhat’smakingthemhappyor
unhappyisequallyimportantsoyoucandomoreoftheformerandlessofthelatter!Ofcourse,
measuringisonlythefirststep;lowscoresrequirefurtheractionasamatterofurgencyoritwillbe
obvioustoallteammembersthatit’sjustacosmeticexercise.
Keythought: Whichfactorsinfluencethehappinessofyourteam?
Which3actionswillyoutaketostartmeasuringand/orincreasingteamhappiness?
1.
2.
3.
Starshavemoreteammeetings
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Givingyourteamtheopportunitytomaketheirvoicesheardmakesahugedifferencetolevelsof
teamengagementandStarsout‐performLaggardsheretoo:
TheentireownershipteamatStarfirmshaveformalmeetingsanaverageof14.1timesayear,
comparedtoonly10.4forLaggards
TheentireleadershipteamatStarfirmshaveformalmeetingsanaverageof14.5timesayear,
comparedtoonly9.9forLaggards
TheentireteamatStarfirmshaveformalmeetingsanaverageof14.0timesayear,compared
toonly8.4forLaggards
Figure24:Averagemeetingsperannum
Again,Starsareensuringthatregularlyandconsistently‐atleastonceamonth‐thewholeteam
meetstogether.Wheneveryoneisinvolvedinthisway,itmakesiteasyforinformationtobe
communicatedandissuesraised.Theyalsofosteragreatteamspiritandoffertheopportunityto
recogniseandrewardteammembers’achievements.Innovationandmotivationthriveinan
environmentwhereideasflowfreelyandeveryonefeelstheycanmakeacontribution;regular
meetingshelptoprovidethatenvironment.
Keythought: Whatopportunitiesdoyourteamhavetovoiceideas,successes,complaintsor
anythingelsetheywanttosay?
Which3actionswillyoutaketoimprovethenumberandeffectivenessofthekeyinternal
meetingswithinyourfirm?
1.
2.
3.
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3.
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Givingyourteamtheopportunitytomaketheirvoicesheardmakesahugedifferencetolevelsof
teamengagementandStarsout‐performLaggardsheretoo:
TheentireownershipteamatStarfirmshaveformalmeetingsanaverageof14.1timesayear,
comparedtoonly10.4forLaggards
TheentireleadershipteamatStarfirmshaveformalmeetingsanaverageof14.5timesayear,
comparedtoonly9.9forLaggards
TheentireteamatStarfirmshaveformalmeetingsanaverageof14.0timesayear,compared
toonly8.4forLaggards
Figure24:Averagemeetingsperannum
Again,Starsareensuringthatregularlyandconsistently–atleastonceamonth–thewholeteam
meetstogether.Wheneveryoneisinvolvedinthisway,itmakesiteasyforinformationtobe
communicatedandissuesraised.Theyalsofosteragreatteamspiritandoffertheopportunityto
recogniseandrewardteammembers’achievements.Innovationandmotivationthriveinan
environmentwhereideasflowfreelyandeveryonefeelstheycanmakeacontribution;regular
meetingshelptoprovidethatenvironment.
Keythought: Whatopportunitiesdoyourteamhavetovoiceideas,successes,complaintsor
anythingelsetheywanttosay?
Which3actionswillyoutaketoimprovethenumberandeffectivenessofthekeyinternal
meetingswithinyourfirm?
1.
2.
3.
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Casestudy:McKellens–Buildingagreatteam
EstablishedinStockportforover100years,in2010this2‐directorpracticemadefundamental
changesthathelpedittowin4timesmorenewclientsthaninthepreviousyear.
Engagingtheteam
Giventhefirm’slonghistoryandatendencyinthepastnottofollowthroughwithnewinitiatives,
therewasanaturalscepticismamongteammemberswhenchangeswereproposed.Thedoubts
werereinforcedbyMcKellenshavingpreviouslybeenreluctanttorevealfinancialfigurestothe
team.
Thedecisionwastakentosweepawaythesecrecyandinvolvetheteammoreby:
Holdingmonthlywholeteammeetingswherefeetargetsandprogressagainstthosetargetsare
shared
Introducingaquarterlybonusschemeforteammemberswithpaymentsopenlyandvisibly
basedonhittingfeetargets
Gettingtheteamtohelpinmakingsuggestionstoimproveclientserviceandidentifyingand
implementingwaysto‘wow’clients
Holdingaweeklyteam‘huddle’onaMondayafternoonsothateveryoneshareswhattheyare
doingthatweekandwheretheycanaskforhelpfromotherteammembers.Thishas
significantlyimprovedcommunicationandhelpseachteammembertounderstandthepressure
feltbyothers.
Addedtothis,thedirectorshave:
Clarifiedthefirm’sgoalssoeveryoneknowswhatitistryingtoachieveandthedirectionin
whichitneedstotravel
Clearlydefinedtherolesandresponsibilitiesofeverysinglepersoninthepractice,whichhas
broughtfurtherclarityandfocus
Increasedthefrequencyandvarietyofteambuildingevents.ChrisBoothcomments:“Oneofthe
morememorableoneswasanafternoonfencing(oftheepeevariety);agreatwaytogeteven
withtheboss!”
Theresultoftheseeffortshasbeenthatteammoraleandengagementhaveincreasedsubstantially.
Clarifyingtheculture
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Casestudy:McKellens–Buildingagreatteam
EstablishedinStockportforover100years,in2010this2‐directorpracticemadefundamental
changesthathelpedittowin4timesmorenewclientsthaninthepreviousyear.
Engagingtheteam
Giventhefirm’slonghistoryandatendencyinthepastnottofollowthroughwithnewinitiatives,
therewasanaturalscepticismamongteammemberswhenchangeswereproposed.Thedoubts
werereinforcedbyMcKellenshavingpreviouslybeenreluctanttorevealfinancialfigurestothe
team.
Thedecisionwastakentosweepawaythesecrecyandinvolvetheteammoreby:
Holdingmonthlywholeteammeetingswherefeetargetsandprogressagainstthosetargetsare
shared
Introducingaquarterlybonusschemeforteammemberswithpaymentsopenlyandvisibly
basedonhittingfeetargets
Gettingtheteamtohelpinmakingsuggestionstoimproveclientserviceandidentifyingand
implementingwaysto‘wow’clients
Holdingaweeklyteam‘huddle’onaMondayafternoonsothateveryoneshareswhattheyare
doingthatweekandwheretheycanaskforhelpfromotherteammembers.Thishas
significantlyimprovedcommunicationandhelpseachteammembertounderstandthepressure
feltbyothers.
Addedtothis,thedirectorshave:
Clarifiedthefirm’sgoalssoeveryoneknowswhatitistryingtoachieveandthedirectionin
whichitneedstotravel
Clearlydefinedtherolesandresponsibilitiesofeverysinglepersoninthepractice,whichhas
broughtfurtherclarityandfocus
Increasedthefrequencyandvarietyofteambuildingevents.ChrisBoothcomments:“Oneofthe
morememorableoneswasanafternoonfencing(oftheepeevariety);agreatwaytogeteven
withtheboss!”
Theresultoftheseeffortshasbeenthatteammoraleandengagementhaveincreasedsubstantially.
Clarifyingtheculture
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Casestudy:McKellens–Buildingagreatteam
EstablishedinStockportforover100years,in2010this2‐directorpracticemadefundamental
changesthathelpedittowin4timesmorenewclientsthaninthepreviousyear.
Engagingtheteam
Giventhefirm’slonghistoryandatendencyinthepastnottofollowthroughwithnewinitiatives,
therewasanaturalscepticismamongteammemberswhenchangeswereproposed.Thedoubts
werereinforcedbyMcKellenshavingpreviouslybeenreluctanttorevealfinancialfigurestothe
team.
Thedecisionwastakentosweepawaythesecrecyandinvolvetheteammoreby:
Holdingmonthlywholeteammeetingswherefeetargetsandprogressagainstthosetargetsare
shared.
Introducingaquarterlybonusschemeforteammemberswithpaymentsopenlyandvisibly
basedonhittingfeetargets.
Gettingtheteamtohelpinmakingsuggestionstoimproveclientserviceandidentifyingand
implementingwaysto‘wow’clients.
Holdingaweeklyteam‘huddle’onaMondayafternoonsothateveryoneshareswhattheyare
doingthatweekandwheretheycanaskforhelpfromotherteammembers.Thishas
significantlyimprovedcommunicationandhelpseachteammembertounderstandthepressure
feltbyothers.
Addedtothis,thedirectorshave:
Clarifiedthefirm’sgoalssoeveryoneknowswhatitistryingtoachieveandthedirectionin
whichitneedstotravel.
Clearlydefinedtherolesandresponsibilitiesofeverysinglepersoninthepractice,whichhas
broughtfurtherclarityandfocus.
Increasedthefrequencyandvarietyofteambuildingevents.ChrisBoothcomments:“Oneofthe
morememorableoneswasanafternoonfencing(oftheepeevariety);agreatwaytogeteven
withtheboss!”
Theresultoftheseeffortshasbeenthatteammoraleandengagementhaveincreasedsubstantially.
Clarifyingtheculture
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SinceMcKellenshasbeenaroundformanyyearsandhasseverallong‐standingteammembers,
therewasageneralassumptionthatthefirm’scultureandwayofworkingwereknownand
understood.However,nothingwasdefinedandsoanine‐point‘ThisiswhatMcKellensisallabout’
documentwasproducedtosetoutwhatthefirmstandsfor,howthingsaredoneandhowittreats
clientsandteammembers.
Thedocumentwasproducedafterdiscussionwithallteammemberstodeterminetheirviewson
thefirm’scurrentpositionandwhereitshouldaimtobe.Becauseteammemberswereinvolvedin
discussionsanddebate,theresultingdocumentwasacollectiveefforttowhicheveryonesignedup.
DirectorChrisBoothsays:“Thissummaryofourcultureisnowframedandhangingupintheoffice
foralltosee,includingvisitors.Andithasaprofoundimpact,sincebyclarifyingthestandardswe
workbyithasactuallyhelpedtoimprovethosestandards,andensurethatwealloperatetothem.”
Casestudy:StarkMain–Buildingagreatteam
Setupin2006,StarkMainisatwodirectorpracticewhichnowemploysateamof15fulltimersand
4parttimersandhasalreadygrownfeestomore£800,000peryear.Theyarejointwinnersofthe
AVNFirmoftheYearAward2011/2012andEmployeroftheYear2011intheScottishBorders
BusinessExcellenceAwards.
“In2008ourentireteamworkedtogethertodevelopourmissionstatement,whichis:
"WeaimtobetheleadingfirmofcharteredtaxadvisorsandaccountantsintheScottishBorders
andbeyondwithahappyandskilledteam"
Everythingwedoisalignedclearlytothismission,andthe"happy"and"skilled"teamelements
arefocussedupononanongoingbasis.Forexample:
Wehavebannedtheword“staff”,withitsconnotationsof“themandus”,andinsteadreferto
ourselvesastheteam,sinceweareallinittogether
Weoperateanopenculture;wemeetasafullteameverymonthforadevelopmentmeeting,
eachteammembertakesaturnatchairinganddirectingthesemeetingsandallhaveachance
tocontributetostrategyatthesemeetings.
Weshareopenlyourkeyperformanceindicators(KPI’s)andfinancesonaOnePagePlanat
thesemeetingsinaspiritofopenness.
Wehavecreatedcareerdevelopmentpathsandhaveno'glassceilings',havingcreated19jobs
in4yearssincecommencement,including5managementpositions
Ourstructure,withthepartnersnotinvolvedinmuchofthedaytodaytechnicalwork,
automaticallygivesteammembersmoreexposuretointerestingworkandresponsibilitythanis
thecaseatmanyotherfirms
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page55
Casestudy:McKellens–Buildingagreatteam
EstablishedinStockportforover100years,in2010this2‐directorpracticemadefundamental
changesthathelpedittowin4timesmorenewclientsthaninthepreviousyear.
Engagingtheteam
Giventhefirm’slonghistoryandatendencyinthepastnottofollowthroughwithnewinitiatives,
therewasanaturalscepticismamongteammemberswhenchangeswereproposed.Thedoubts
werereinforcedbyMcKellenshavingpreviouslybeenreluctanttorevealfinancialfigurestothe
team.
Thedecisionwastakentosweepawaythesecrecyandinvolvetheteammoreby:
Holdingmonthlywholeteammeetingswherefeetargetsandprogressagainstthosetargetsare
shared.
Introducingaquarterlybonusschemeforteammemberswithpaymentsopenlyandvisibly
basedonhittingfeetargets.
Gettingtheteamtohelpinmakingsuggestionstoimproveclientserviceandidentifyingand
implementingwaysto‘wow’clients.
Holdingaweeklyteam‘huddle’onaMondayafternoonsothateveryoneshareswhattheyare
doingthatweekandwheretheycanaskforhelpfromotherteammembers.Thishas
significantlyimprovedcommunicationandhelpseachteammembertounderstandthepressure
feltbyothers.
Addedtothis,thedirectorshave:
Clarifiedthefirm’sgoalssoeveryoneknowswhatitistryingtoachieveandthedirectionin
whichitneedstotravel.
Clearlydefinedtherolesandresponsibilitiesofeverysinglepersoninthepractice,whichhas
broughtfurtherclarityandfocus.
Increasedthefrequencyandvarietyofteambuildingevents.ChrisBoothcomments:“Oneofthe
morememorableoneswasanafternoonfencing(oftheepeevariety);agreatwaytogeteven
withtheboss!”
Theresultoftheseeffortshasbeenthatteammoraleandengagementhaveincreasedsubstantially.
Clarifyingtheculture
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page56
SinceMcKellenshasbeenaroundformanyyearsandhasseverallong‐standingteammembers,
therewasageneralassumptionthatthefirm’scultureandwayofworkingwereknownand
understood.However,nothingwasdefinedandsoanine‐point‘ThisiswhatMcKellensisallabout’
documentwasproducedtosetoutwhatthefirmstandsfor,howthingsaredoneandhowittreats
clientsandteammembers.
Thedocumentwasproducedafterdiscussionwithallteammemberstodeterminetheirviewson
thefirm’scurrentpositionandwhereitshouldaimtobe.Becauseteammemberswereinvolvedin
discussionsanddebate,theresultingdocumentwasacollectiveefforttowhicheveryonesignedup.
DirectorChrisBoothsays:“Thissummaryofourcultureisnowframedandhangingupintheoffice
foralltosee,includingvisitors.Andithasaprofoundimpact,sincebyclarifyingthestandardswe
workbyithasactuallyhelpedtoimprovethosestandards,andensurethatwealloperatetothem.”
Casestudy:StarkMain–Buildingagreatteam
Setupin2006,StarkMainisatwo‐directorpracticewhichnowemploysateamof15fulltimersand
4parttimersandhasalreadygrownfeestomore£800,000peryear.Theyarejointwinnersofthe
AVNFirmoftheYearAward2011/2012andEmployeroftheYear2011intheScottishBorders
BusinessExcellenceAwards.DirectorIanMainexplains:“In2008ourentireteamworkedtogether
todevelopourmissionstatement,whichis:
"WeaimtobetheleadingfirmofcharteredtaxadvisorsandaccountantsintheScottishBordersand
beyondwithahappyandskilledteam".
Everythingwedoisalignedclearlytothismission,andthe"happy"and"skilled"teamelements
arefocussedupononanongoingbasis.Forexample:
Wehavebannedtheword“staff”,withitsconnotationsof“themandus”,andinsteadreferto
ourselvesastheteam,sinceweareallinittogether.
Weoperateanopenculture;wemeetasafullteameverymonthforadevelopmentmeeting,
eachteammembertakesaturnatchairinganddirectingthesemeetingsandallhaveachance
tocontributetostrategyatthesemeetings.
Weshareopenlyourkeyperformanceindicators(KPIs’)andfinancesonaOnePagePlanat
thesemeetingsinaspiritofopenness.
Wehavecreatedcareerdevelopmentpathsandhaveno'glassceilings',havingcreated19jobs
in4yearssincecommencement,including5managementpositions.
Ourstructure,withthepartnersnotinvolvedinmuchofthedaytodaytechnicalwork,
automaticallygivesteammembersmoreexposuretointerestingworkandresponsibilitythanis
thecaseatmanyotherfirms.
Wetakeourteam'shealthseriouslyandachievedBronzeawardstatusundertheHealthy
WorkingLivesprogrammein2010.Aspartofthisweoperateacycletoworkscheme.
54www.myaccountantsclub.co.uk
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page57
Wealsotaketeamhappinessseriously.Weuseanelectronicmonitoringsystem(TeamMatters)
wherebyallteammembersarerequiredtocompleteashortquestionnaireonaweeklybasis
andamoredetailedonemonthly.Thesereportsarethenautomatedandcollatedtoallowa
monthlyanalysisofeachteammember'shappiness,andtoidentifyanyissuesarisingand
providesupportwhererequired.Wehavetargetedaminimumlevelofhappinessof4outof6
(i.e.aratingof'excellent'happiness)andcurrentlyhaveawholeteamaverageof4.6outof6.
Whenanyindividual'sscoreisrespondedatalevelof3orlessthedirectorsreceiveaninstant
emailandtextmessagetomakethemawareandareaffordedtheopportunitytomeetand
discussthepotentialissuewiththeindividualteammember.Ifnoissuesariseofthisnaturethe
monthlyreportsareanalysedandsharedwiththewholeteamatthedevelopmentmeeting.
Growingourpeople
Someofthethingswedoinordertoensurethatourteammembersdevelopandgrowaspeople
andprofessionalsinclude:
Weholdtwiceyearlyindividualappraisalsandagreepersonalimprovementplans.
Wehold'onthejob'projectdeliveryappraisalsandfeedbackaftereachengagement.
Weuseinhouse'roleplaying'sessionstobuildconfidenceandskills.
Wealsocreatementoringandshadowingopportunitiesdailytoallowteammembersto
experienceaspectsofwhatthefirmdoesthatarenewtothemandbuildcompetenceinthose
areas.
WeworkhardtosystemisethebusinessusingourSystemBuildersoftware,andinthelast12
monthsafurther82systemshavebeenwrittenand62systemsimplementedbytheteam.As
wellasleadingtosignificantefficiencysavings,thesesystemsalsoallowteammemberstolearn
newskillsandconsistentlydelivertheverybestservicetoclients.
Wehaverecentlyinvested£6,000inamanagementtrainingneedsanalysisprojectin
conjunctionwithaleadingtrainingprovider.Alldirectorsandmanagershavebeenallowedto
assesstheirskillsandapproachbywayofpsychometricand360degreeappraisalsandpersonal
developmentplanshavebeenagreedbasedontheresults.
Weinvestheavilyininternaltrainingandexternalcourses.Allteammembersareoffered100%
fundingoftrainingrequirementsandgivenadditionalholidaysforexamandstudypurposes.
84%ofourteamarefollowingprofessionalstudiesatpresent.
Wehavecommenceda‘MBALite’trainingprogrammeforthedirectorsandmanagersinorder
tostrengthenourstrategicdirection.
Wehavesetamonthlytargetoftraininghoursandreportboththatandouractualperformance
onourmonthlyOnePagePlan.
Weagreeasawholeteamwhattrainingwillbeheldinthenextmonthandstructuredeliveryof
this,andagreeactionsandmethodsappropriately.
Ourelectronichappinessmonitoringsystemalsoprovidesamechanismforteammembersto
communicatetheirideasforimprovingthebusiness.
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page56
SinceMcKellenshasbeenaroundformanyyearsandhasseverallong‐standingteammembers,
therewasageneralassumptionthatthefirm’scultureandwayofworkingwereknownand
understood.However,nothingwasdefinedandsoanine‐point‘ThisiswhatMcKellensisallabout’
documentwasproducedtosetoutwhatthefirmstandsfor,howthingsaredoneandhowittreats
clientsandteammembers.
Thedocumentwasproducedafterdiscussionwithallteammemberstodeterminetheirviewson
thefirm’scurrentpositionandwhereitshouldaimtobe.Becauseteammemberswereinvolvedin
discussionsanddebate,theresultingdocumentwasacollectiveefforttowhicheveryonesignedup.
DirectorChrisBoothsays:“Thissummaryofourcultureisnowframedandhangingupintheoffice
foralltosee,includingvisitors.Andithasaprofoundimpact,sincebyclarifyingthestandardswe
workbyithasactuallyhelpedtoimprovethosestandards,andensurethatwealloperatetothem.”
Casestudy:StarkMain–Buildingagreatteam
Setupin2006,StarkMainisatwo‐directorpracticewhichnowemploysateamof15fulltimersand
4parttimersandhasalreadygrownfeestomore£800,000peryear.Theyarejointwinnersofthe
AVNFirmoftheYearAward2011/2012andEmployeroftheYear2011intheScottishBorders
BusinessExcellenceAwards.DirectorIanMainexplains:“In2008ourentireteamworkedtogether
todevelopourmissionstatement,whichis:
"WeaimtobetheleadingfirmofcharteredtaxadvisorsandaccountantsintheScottishBorders
andbeyondwithahappyandskilledteam"
Everythingwedoisalignedclearlytothismission,andthe"happy"and"skilled"teamelementsare
focussedupononanongoingbasis.Forexample:
Wehavebannedtheword“staff”,withitsconnotationsof“themandus”,andinsteadreferto
ourselvesastheteam,sinceweareallinittogether.
Weoperateanopenculture;wemeetasafullteameverymonthforadevelopmentmeeting,
eachteammembertakesaturnatchairinganddirectingthesemeetingsandallhaveachance
tocontributetostrategyatthesemeetings.
Weshareopenlyourkeyperformanceindicators(KPIs)andfinancesonaOnePagePlanatthese
meetingsinaspiritofopenness.
Wehavecreatedcareerdevelopmentpathsandhaveno'glassceilings',havingcreated19jobs
in4yearssincecommencement,including5managementpositions.
Ourstructure,withthepartnersnotinvolvedinmuchofthedaytodaytechnicalwork,
automaticallygivesteammembersmoreexposuretointerestingworkandresponsibilitythanis
thecaseatmanyotherfirms.
Wetakeourteam'shealthseriouslyandachievedBronzeawardstatusundertheHealthy
WorkingLivesprogrammein2010.Aspartofthisweoperateacycletoworkscheme.
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page56
SinceMcKellenshasbeenaroundformanyyearsandhasseverallong‐standingteammembers,
therewasageneralassumptionthatthefirm’scultureandwayofworkingwereknownand
understood.However,nothingwasdefinedandsoanine‐point‘ThisiswhatMcKellensisallabout’
documentwasproducedtosetoutwhatthefirmstandsfor,howthingsaredoneandhowittreats
clientsandteammembers.
Thedocumentwasproducedafterdiscussionwithallteammemberstodeterminetheirviewson
thefirm’scurrentpositionandwhereitshouldaimtobe.Becauseteammemberswereinvolvedin
discussionsanddebate,theresultingdocumentwasacollectiveefforttowhicheveryonesignedup.
DirectorChrisBoothsays:“Thissummaryofourcultureisnowframedandhangingupintheoffice
foralltosee,includingvisitors.Andithasaprofoundimpact,sincebyclarifyingthestandardswe
workbyithasactuallyhelpedtoimprovethosestandards,andensurethatwealloperatetothem.”
Casestudy:StarkMain–Buildingagreatteam
Setupin2006,StarkMainisatwo‐directorpracticewhichnowemploysateamof15fulltimersand
4parttimersandhasalreadygrownfeestomore£800,000peryear.Theyarejointwinnersofthe
AVNFirmoftheYearAward2011/2012andEmployeroftheYear2011intheScottishBorders
BusinessExcellenceAwards.DirectorIanMainexplains:“In2008ourentireteamworkedtogether
todevelopourmissionstatement,whichis:
"WeaimtobetheleadingfirmofcharteredtaxadvisorsandaccountantsintheScottishBordersand
beyondwithahappyandskilledteam".
Everythingwedoisalignedclearlytothismission,andthe"happy"and"skilled"teamelements
arefocussedupononanongoingbasis.Forexample:
Wehavebannedtheword“staff”,withitsconnotationsof“themandus”,andinsteadreferto
ourselvesastheteam,sinceweareallinittogether.
Weoperateanopenculture;wemeetasafullteameverymonthforadevelopmentmeeting,
eachteammembertakesaturnatchairinganddirectingthesemeetingsandallhaveachance
tocontributetostrategyatthesemeetings.
Weshareopenlyourkeyperformanceindicators(KPIs’)andfinancesonaOnePagePlanat
thesemeetingsinaspiritofopenness.
Wehavecreatedcareerdevelopmentpathsandhaveno'glassceilings',havingcreated19jobs
in4yearssincecommencement,including5managementpositions.
Ourstructure,withthepartnersnotinvolvedinmuchofthedaytodaytechnicalwork,
automaticallygivesteammembersmoreexposuretointerestingworkandresponsibilitythanis
thecaseatmanyotherfirms.
Wetakeourteam'shealthseriouslyandachievedBronzeawardstatusundertheHealthy
WorkingLivesprogrammein2010.Aspartofthisweoperateacycletoworkscheme.
55www.myaccountantsclub.co.uk
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page57
Wealsotaketeamhappinessseriously.Weuseanelectronicmonitoringsystem(TeamMatters)
wherebyallteammembersarerequiredtocompleteashortquestionnaireonaweeklybasis
andamoredetailedonemonthly.Thesereportsarethenautomatedandcollatedtoallowa
monthlyanalysisofeachteammember'shappiness,andtoidentifyanyissuesarisingand
providesupportwhererequired.Wehavetargetedaminimumlevelofhappinessof4outof6
(i.e.aratingof'excellent'happiness)andcurrentlyhaveawholeteamaverageof4.6outof6.
Whenanyindividual'sscoreisrespondedatalevelof3orlessthedirectorsreceiveaninstant
emailandtextmessagetomakethemawareandareaffordedtheopportunitytomeetand
discussthepotentialissuewiththeindividualteammember.Ifnoissuesariseofthisnaturethe
monthlyreportsareanalysedandsharedwiththewholeteamatthedevelopmentmeeting.
Growingourpeople
Someofthethingswedoinordertoensurethatourteammembersdevelopandgrowaspeople
andprofessionalsinclude:
Weholdtwiceyearlyindividualappraisalsandagreepersonalimprovementplans.
Wehold'onthejob'projectdeliveryappraisalsandfeedbackaftereachengagement.
Weuseinhouse'roleplaying'sessionstobuildconfidenceandskills.
Wealsocreatementoringandshadowingopportunitiesdailytoallowteammembersto
experienceaspectsofwhatthefirmdoesthatarenewtothemandbuildcompetenceinthose
areas.
WeworkhardtosystemisethebusinessusingourSystemBuildersoftware,andinthelast12
monthsafurther82systemshavebeenwrittenand62systemsimplementedbytheteam.As
wellasleadingtosignificantefficiencysavings,thesesystemsalsoallowteammemberstolearn
newskillsandconsistentlydelivertheverybestservicetoclients.
Wehaverecentlyinvested£6,000inamanagementtrainingneedsanalysisprojectin
conjunctionwithaleadingtrainingprovider.Alldirectorsandmanagershavebeenallowedto
assesstheirskillsandapproachbywayofpsychometricand360degreeappraisalsandpersonal
developmentplanshavebeenagreedbasedontheresults.
Weinvestheavilyininternaltrainingandexternalcourses.Allteammembersareoffered100%
fundingoftrainingrequirementsandgivenadditionalholidaysforexamandstudypurposes.
84%ofourteamarefollowingprofessionalstudiesatpresent.
Wehavecommenceda‘MBALite’trainingprogrammeforthedirectorsandmanagersinorder
tostrengthenourstrategicdirection.
Wehavesetamonthlytargetoftraininghoursandreportboththatandouractualperformance
onourmonthlyOnePagePlan.
Weagreeasawholeteamwhattrainingwillbeheldinthenextmonthandstructuredeliveryof
this,andagreeactionsandmethodsappropriately.
Ourelectronichappinessmonitoringsystemalsoprovidesamechanismforteammembersto
communicatetheirideasforimprovingthebusiness.
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page58
Supportingandrewardingourpeople
Someofthewayswesupportandrewardourteaminclude:
Marketleadingremunerationlevels.
Flexitimeforallteammembers.
Aflexiblebenefitspackage.
Holidaytimebank.
Regularmedicalhealthchecksandprivatehealthcarescheme.
Remoteworkingisanoptionforthosewhowantit.
PDA/i‐phoneaccesstodiary,emailandremoteaccesstoserver.
100%ofourmanagementteamareyoungmothers,andareaffordedparttimeandadditional
flexibleworkingpracticestoallowcareerprogressionalongsideparentalresponsibilities.
An'opendoor'policyforteamaccesstothedirectorshipteam.
Thebenefitsfromourteamapproach
Asaconsequenceofourcommitmenttobuildingagreatteam,andworkingtogetherasateam,we
haveexperiencedthefollowingbenefits:
Earnedanexcellentreputationasafirm.
Hadalotoffun,andcreatedawonderfulteamspiritwithgenuinelyhappyteammemberswho
'love'theirjob.
WerenamedastheEmployeroftheYearinthe2011ScottishBordersBusinessExcellence
Awards.
Wehavea'waitinglist'ofsuitablecandidateslookingtojoinourteamasopportunityarises.
Inaddition,thespectaculargrowthofthebusinessisadirectconsequenceofthewaywetreatour
people.Wehaveprovidedamodern,dynamicandcaringenvironmentforourteam.Andthey,in
turn,havedeliveredamodern,dynamicandcaringservicetoourclients.”
Itiseasierforsolepractitioners
Thefinalresearchfindingisoneofthemostinteresting:
• 62%ofStarsaresolepractitioners,comparedtoonly39%ofLaggards
• Only9%ofStarshavethreeormorepartners,comparedto33%ofLaggards
Onthefaceofitthisseemstosuggestthatitiseasiertobesuccessfulifyouareasolepractitioner
thanifyouareamultipartnerfirm.
Itcould,ofcourse,bethat20%growthiseasiertoachievewhenyourfeebaseisacoupleof
hundredthousandpoundsratherthanacoupleofmillionpounds.Butinouropinionthereislikely
tobemoretoitthansimplythat.
56www.myaccountantsclub.co.uk
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page58
Supportingandrewardingourpeople
Someofthewayswesupportandrewardourteaminclude:
Marketleadingremunerationlevels.
Flexitimeforallteammembers.
Aflexiblebenefitspackage.
Holidaytimebank.
Regularmedicalhealthchecksandprivatehealthcarescheme.
Remoteworkingisanoptionforthosewhowantit.
PDA/i‐phoneaccesstodiary,emailandremoteaccesstoserver.
100%ofourmanagementteamareyoungmothers,andareaffordedparttimeandadditional
flexibleworkingpracticestoallowcareerprogressionalongsideparentalresponsibilities.
An'opendoor'policyforteamaccesstothedirectorshipteam.
Thebenefitsfromourteamapproach
Asaconsequenceofourcommitmenttobuildingagreatteam,andworkingtogetherasateam,we
haveexperiencedthefollowingbenefits:
Earnedanexcellentreputationasafirm.
Hadalotoffun,andcreatedawonderfulteamspiritwithgenuinelyhappyteammemberswho
'love'theirjob.
WerenamedastheEmployeroftheYearinthe2011ScottishBordersBusinessExcellence
Awards.
Wehavea'waitinglist'ofsuitablecandidateslookingtojoinourteamasopportunityarises.
Inaddition,thespectaculargrowthofthebusinessisadirectconsequenceofthewaywetreatour
people.Wehaveprovidedamodern,dynamicandcaringenvironmentforourteam.Andthey,in
turn,havedeliveredamodern,dynamicandcaringservicetoourclients.”
Itiseasierforsolepractitioners
Thefinalresearchfindingisoneofthemostinteresting:
• 62%ofStarsaresolepractitioners,comparedtoonly39%ofLaggards
• Only9%ofStarshavethreeormorepartners,comparedto33%ofLaggards
Onthefaceofitthisseemstosuggestthatitiseasiertobesuccessfulifyouareasolepractitioner
thanifyouareamultipartnerfirm.
Itcould,ofcourse,bethat20%growthiseasiertoachievewhenyourfeebaseisacoupleof
hundredthousandpoundsratherthanacoupleofmillionpounds.Butinouropinionthereislikely
tobemoretoitthansimplythat.
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page59
Basedonourexperienceofstudyingandworkingwithhundredsofaccountancypractices,we
suspectthatmuchofthedifferenceisduetothefollowingfactors:
• Solepractitionerstendtohavegreaterclarityovertheirvision–whereasinmultipartnerfirms
theneedtobalancethe(sometimesconflicting)hopesandaspirationsofallthepartnerscan
leadtoconfusion.
• Solepractitionerstendtobemoredecisive–whereasinmultipartnerfirmsdecisionsare
delayedanddeferredbecausepartnermeetingsareinfrequentandthepartnerscan’talways
agree.
• Solepractitionersalsotendmakebetterdecisions–sincetheydon’thavetowaterideasdown
tothelowestcommondenominatorinordertogainacquiescencefromtheirpartners.
• Solepractitionerstendtobebetteratimplementingtheirdecisions–whereasinpartnerships
itisnotuncommonforoneormorepartnerstoeithernotputtheirweightbehindadecision
theydidn’tfullyagreewith,oreventoactivelyundermineit.
Ultimately,ofcourse,allofthiscomesdowntooneword:“leadership”.
Inasolepractitionerfirmthereisasingleundisputedleader.Incontrast,multipartnerfirmsare
oftenrunbywhatisineffectacommittee.Andcommitteesarerarelyifeveraseffectiveasaclear,
strong,decisiveleader–whichiswhywearetoldthereisnotasinglestatueanywhereintheworld
dedicatedtoacommittee!
57www.myaccountantsclub.co.uk
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page59
Basedonourexperienceofstudyingandworkingwithhundredsofaccountancypractices,we
suspectthatmuchofthedifferenceisduetothefollowingfactors:
• Solepractitionerstendtohavegreaterclarityovertheirvision–whereasinmultipartnerfirms
theneedtobalancethe(sometimesconflicting)hopesandaspirationsofallthepartnerscan
leadtoconfusion.
• Solepractitionerstendtobemoredecisive–whereasinmultipartnerfirmsdecisionsare
delayedanddeferredbecausepartnermeetingsareinfrequentandthepartnerscan’talways
agree.
• Solepractitionersalsotendmakebetterdecisions–sincetheydon’thavetowaterideasdown
tothelowestcommondenominatorinordertogainacquiescencefromtheirpartners.
• Solepractitionerstendtobebetteratimplementingtheirdecisions–whereasinpartnerships
itisnotuncommonforoneormorepartnerstoeithernotputtheirweightbehindadecision
theydidn’tfullyagreewith,oreventoactivelyundermineit.
Ultimately,ofcourse,allofthiscomesdowntooneword:“leadership”.
Inasolepractitionerfirmthereisasingleundisputedleader.Incontrast,multipartnerfirmsare
oftenrunbywhatisineffectacommittee.Andcommitteesarerarelyifeveraseffectiveasaclear,
strong,decisiveleader–whichiswhywearetoldthereisnotasinglestatueanywhereintheworld
dedicatedtoacommittee!
58www.myaccountantsclub.co.uk
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page60
Animpassionedpleatotheprofession…
Whilsttherearemanyextremelypositiveandusefulfindingsinthisreport,therearealsosometruly
shockingfindings.
Thoseshockingfindingsmustactasawakeupcall.
Accountancyisagreatandnobleprofession.ButsomeaspectsofwhatitdoesMUSTchange
dramatically.
Itissimplynotacceptabletobeincompetent–Currentlyaccountantsseemtobemaking
mistakeswithalmosthalfofalltheirclients,andfor15‐20%ofalltheirclientsthosemistakesare
whataccountantsthemselvesregardas“major”.Evenusingconservativeestimates,itseems
likelythatthesefailingsarecostingtheiroverlookedclients£1.8billion.Forthegoodofclients
andtheprofession,thishastochange.
Itissimplynotacceptabletolie–Ontheirwebsitesandintheirbrochuresthevastmajorityof
accountantsclaimtobe“proactive”.Butbytheirownadmission,82%ofallaccountantsarenot
asproactiveastheyshouldbe.Forthegoodofclientsandtheprofession,thishastochange.
Itissimplynotacceptabletobearrogant–Whilstthearrogant“Iknowbest”typeofattitudeis
anathematothevastmajorityofdecentprofessionals,forothersitisnot.Alarmingly5%ofall
accountantssaythattheybelieveitisacceptableforthemtoarbitrarilyassumethatclientswill
notbeinterestedincertaintaxplanningideasthatcouldsavethemagreatdealofmoney,and
sodonotseetheneedtolettheirclientsmakeuptheirownmindsontheirowntaxaffairs.For
thegoodofclientsandtheprofession,thishastochange.
Itissimplynotacceptabletocreateconfusion–56‐91%ofengagementletterscreateconfusion
andmisunderstandingbybeingsilentonwhetherkeyissuessuchastaxcredits,IHTplanningand
oneofftaxplanningopportunitieswillbeconsideredbytheaccountant.Forthesakeofclarity,
andforthegoodofclientsandtheprofession,thishastochange.
Itissimplynotacceptabletosettleforsecondrateresults–64%ofallaccountantsarenot
happywiththeamountofovertimetheyhavetowork.69%arenothappywiththenumberof
clientstheyhave.82%arenothappywiththeir‘lockup’.91%arenothappywiththeservice
theirfirmgives.And92%arenothappywiththeaveragefeestheyareabletocharge.Yetrather
thantackletheseissuesinwaysthathavealreadybeenproventoworkbyotherfirms,many
firmsseemtoprefertositback,play“victim”andblameothers(e.g.theeconomy,theInstitute,
theirclientsetc).Forthegoodoftheirclients,colleagues,themselvesandtheirlovedones,this
hastochange.
Thisreport,andotherresearchprojectslikeit,haveprovidedclearandunequivocalevidenceon
exactlyhoweachofthesechallengescanbeovercome.
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Sothequestionisnotwhetheraccountantscangetbetterinalltheseways.
Thequestioniswhethertheywill.
Andthatistheprofoundlyimportantquestionthateveryreaderofthisreportmustanswerfor
themselves.
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
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Appendices
Appendix1–Whitepaper:Thebiggestchallengesfacingthe 63
accountancyprofessionoverthenextfiveyears
Appendix2–HowUKaccountantsarereallyperforming 79
Appendix3–Exampleofastandardmeetingagenda 80
Appendix4–Referencesandfurtherreading 83
Appendix5–Suggestedactionplan 84
Appendix6–Freeresourcesthatcanhelp 91
Appendix7–Completesurveyresults 93
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79
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Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
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Appendix1:ThefulltextfromtheJune2011White
Paper
Copyright©2011TheAccountantsClub
PublishedbyTheAccountantsClubinJune2011.Allrightsreserved.Nopartofthispublicationmaybereproduced,stored
inaretrievalsystemortransmittedinanyformorbyanymeans,electronic,mechanical,photocopying,recordingor
otherwisewithoutthepriorpermissionoftheauthors.
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About the authors Mark Wickersham, FCA Mark is passionate about the accounting profession. Since selling the practice he founded, his focus has been exclusively on helping accountants to become much more profitable. He led the team that developed over a thousand tools and systems as part of the System Builder software suite for accountants, including many which help practitioners grow their fees, profits and capital value. He is the driving force behind both The Accountants Club and The Tax Club and is also a widely published author on practice issues, with his most recent publication ‘Effective Pricing for Accountants’ becoming an Amazon number 1 bestseller in May 2011. Mark Lloydbottom, FCA, CPC Mark started his own practice in Bristol in 1978 and was a practitioner for 20 years. He is the founder of the Association of British Independent Accounting Firms, Practice Track and PracticeWEB and he has also served on various committees with the Institute of Chartered Accountants including the 2005 Working Party. He is devoted to researching and identifying strategies to enable accounting firms to build the top and bottom line. He achieves this by delivering high quality consulting and lecturing and is PracticeWEB’s principal author maintaining the site content for more than 750 accounting firms. Susan Clegg Since 2004 Susan has researched and written on a wide variety of subjects for accountants in practice. She produces newsletters, marketing material and web content, always with the aim of helping accountants to take action to do things differently. In 2005 she co-authored ‘Everlasting Phone Impressions’ with Paul Shrimpling.
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Challenging times The last few years have seen challenging times for accountants and we’ve been keen to find out what the next five years has in store. What’s really interesting at the moment are the mixed messages we’re hearing from conversations with accountants in practice. There are clearly many, many firms of accountants still finding life tough and the future bleak. And yet there are many others who are getting great results and who see big opportunities over the next few years. This White Paper looks at what are likely to be the biggest challenges over the next few years and the possible solutions for overcoming those challenges. It is based on a survey of 108 accountants in practice carried out in May 2011 and on what other accountants are telling us. This White Paper sets out the “what”. It is the first part of a bigger survey which identifies best practice and “how” firms are overcoming these challenges. This White Paper is the preface for the full “Your blueprint to a better accountancy practice” which will be published in September 2011. Let’s start with the top five challenges based upon the findings from the survey, since they are the most pressing issues for many practices.
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Challenge number 5 – Finding, keeping and motivating the right people Here are some of the comments made by participants in the survey: Getting relevant qualified persons in the business. Delegating work to others and trust that they won't screw it up. Finding suitably committed staff - that is ‘who get it’. My team not being as clever as me! It is becoming increasingly difficult to recruit team members with the right attitudes and skills. Staff are not commercial. Finding the right level of staff with the advanced skill sets to cope with client demands. The ability to identify and attract excellent team members. And it’s not a new problem. Finding, keeping and motivating the right people are challenges that few accountants overcome. And yet the consequences that stem from these challenges are far-reaching. As David Maister found in his extensive research behind the book, “Practice what you preach”, there is a very strong positive correlation between team happiness and profitability; even more so than the positive correlation between client happiness and profitability. Aside from the ultimate impact on profitability, failing to overcome these challenges results in higher recruitment costs from high levels of staff turnover, sub-standard work impacting on quality and service levels, partners not feeling they can delegate and so they end up doing the wrong types of work, succession problems by not having the right people to take over the practice in the future, and many more. We see a number of common factors amongst firms of accountants that have largely overcome these issues. Probably the most important issue to consider is the state of your systems. For example, what systems do you have for recruiting people? Do those systems embody best practice? For example, do you use personality profiling as part of your recruitment process. This is becoming increasingly popular and it can be extremely helpful in building a well-balanced team of people. If you suffer from – as someone said in the survey – “staff are not commercial”, or as we often hear, “my client managers are useless at bringing in new work” then it could be that you’re trying to fit ‘square pegs into round holes’. So that’s recruitment systems. What about your systems for doing the technical work? One of the survey comments was, “Delegating work to others and trust that they won't screw it up” and another was, “My team not being as clever as me!” These are classic symptoms of not having the right systems in place.
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If you’ve not already read it, then Michael Gerber’s “The E-Myth Revisited” is essential reading for all business owners. And in the last few months Michael has published “The E-Myth Accountant” which applies his systems message to an accountancy practice. This book is available on Amazon and is a must-read. The other key factor is culture. For example, in your practice do you see the structure as partners and “staff”, or are you one team? This might sound like a small thing, but breaking away from thinking of your team as your “staff” makes a big difference... the us and them mentality creates barriers. Successful firms with a team culture have regular meetings, share key numbers with the team, have an openness, share the vision and strategy with the team, build trust, recognise and reward people.
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Challenge number 4 – getting new clients Growth is clearly a big challenge. In fact these are some of the specific comments we found from the survey: Winning more clients. We are a new small business, how do we get our name out there? And also how do we compete
with the big firms? As a small practice, my biggest challenge is attracting new clients through marketing and selling,
whilst at the same time, ensuring average fees remain high. Identifying targets and converting "cold" cases. The practice is not growing fast enough due to it being difficult to attract enough new clients. Effective marketing. The big problem here is marketing and selling. Accountants in general don’t understand marketing and in general don’t like selling. And it’s not surprising. Going back to the subject of personality profiling, accountants usually do not have the profile to be great at selling. So why is it that in an accountancy practice the people that do the selling are accountants? In most other businesses the owners recruit sales people. It’s an interesting question. And yet there are firms of accountants who have recognised this and - often using personality profiling - look for team members who have both a financial awareness and the profile suited to a sales person to be involved in the selling process. Very often these are ex-bank managers or IFAs. It’s also not surprising because most accountants have not acquired any formal sales and marketing skills through training. This could be due to a lack of interest, a lack of time or a lack of budget. If it is a lack of interest, then recognise this fact and instead either recruit someone to do the marketing or outsource the marketing. Doing nothing is not an option if you want to grow the practice. If the reason is lack of time, then again either recruit or outsource. Or free up time – which is something covered later on in this White Paper. And if it is lack of budget then it should be recognised that marketing is an investment... if done effectively it should produce a return. Not only that, some of the most effective marketing for accountants does not have to cost a single penny. If budget is an issue then forget expensive advertising. Forget expensive telemarketing campaigns. Forget building a flash website. Forget direct mail. We’re not saying those things don’t work... they can do, but if budget is an issue consider email marketing, consider social media, consider other online marketing, consider referral systems, develop systems for collecting testimonials and success stories, improve your pricing (pricing is part of marketing). At this point we know some of you will have read that last sentence and thought, “social media – that will never work for accountants.” Twelve months ago we thought exactly the same. But over the last year we have seen so many instances of it working that the proof is irrefutable. If other accountants tell you that social media does not work, what they
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are really saying to you is, “I haven’t yet worked out how to make social media work.” And that’s nothing to be ashamed of... social media is very, very new. Even most of the so-called social media experts and consultants out there are still trying to figure out how to get the best results from it. Think about this. Everyone knows that the best way to grow an accountancy practice is word-of- mouth and referrals. It’s why so many accountants spend time networking at breakfast clubs like BNI and similar events. And no one is disputing that. We are in a relationship business and it’s all about building trust and credibility. Well, that’s exactly what social media is all about. Forget about the scary technology and new terminology for now... what it’s all about is building up networks and relationship, about building trust and credibility.
One of our key predictions is that by the year 2015 social media will be the PRIMARY way that firms of accountants attract new business. It’s inevitable because social media is simply an online way of doing what we already do. You cannot afford to ignore it... you just
have to figure out how best to use it before everybody else. And some firms of accountants have already figured it out. If you want to grow your practice, standing still is not an option in these ever-changing times – and marketing is not an option. You must either invest time and money in training, or you must recruit the right people or you must outsource the marketing function.
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are really saying to you is, “I haven’t yet worked out how to make social media work.” And that’s nothing to be ashamed of... social media is very, very new. Even most of the so-called social media experts and consultants out there are still trying to figure out how to get the best results from it. Think about this. Everyone knows that the best way to grow an accountancy practice is word-of- mouth and referrals. It’s why so many accountants spend time networking at breakfast clubs like BNI and similar events. And no one is disputing that. We are in a relationship business and it’s all about building trust and credibility. Well, that’s exactly what social media is all about. Forget about the scary technology and new terminology for now... what it’s all about is building up networks and relationship, about building trust and credibility.
One of our key predictions is that by the year 2015 social media will be the PRIMARY way that firms of accountants attract new business. It’s inevitable because social media is simply an online way of doing what we already do. You cannot afford to ignore it... you just
have to figure out how best to use it before everybody else. And some firms of accountants have already figured it out. If you want to grow your practice, standing still is not an option in these ever-changing times – and marketing is not an option. You must either invest time and money in training, or you must recruit the right people or you must outsource the marketing function.
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Challenge number 3 – external threats The survey shows that many accountants see the big challenge coming from external threats. This includes cut-throat competition for compliance work as technology and outsourcing make it cheap, fast and easy to access. Due to low barriers to entry it is easy for unqualified accountants to enter the market, there is an increasing risk from outsourcing of accountants in places like India working directly with clients, and technology makes it cheaper and easier to carry out compliance work. Here are some of the specific comments from the survey: Trash like iXBRL imposing new costs. Competitive market place and difficult economic situation. The pace of change in the industry. Cut throat competition from accountants working from home. Dealing with the increasing poor service level of HMRC. No regulation of unqualified people setting up as accountants. Anyone can call themselves an
accountant - book-keepers etc, without the regulation that qualified accountants have to comply with.
Here’s the thing... there will always be external threats. And guess what? There is nothing you can do about them. We will always be battling HMRC, we’ll always have to adapt to new legislation, increasing rates of change in technology is here to stay and there will always be seemingly unfair competition. However, those external threats affect all firms of accountants. And yet some are performing better than others. Very often it’s in the mindset. It’s interesting that one firm in the survey said they did not see any challenges, only opportunities. It’s the “glass half full versus glass half empty” issue. Firms that complain about external threats will probably become victims, whilst others say, “Bring it on!” For example, the glass is half full accountant will say things like: “iXBRL imposes new costs – fantastic, that’s an opportunity to review our pricing levels” “Competitive market place and difficult economic situation – great news, our competitors will be
struggling so let’s find out what services business owners faced with recession want from an accountant and let’s adapt our service offering to give them what they want”
“The pace of change in the industry – wonderful, that will make it harder for our competitors. We don’t have to keep pace with change, we just have to adapt faster than the competition”
“Dealing with the increasing poor service level of HMRC – that’s brilliant, taxpayers will increasingly realise that they need an accountant”
Practices need to focus on differentiating their compliance services to avoid them becoming a commodity or they need to develop niche service offerings such as advanced tax planning and business consultancy. So let’s not over-worry about the external threats. Instead, focus on the wonderful opportunities facing accountants. For example, Increasing use of outsourcing provides an opportunity to build a practice based on adding value
to the client – this is the more enjoyable and profitable work – and we can transform fixed costs associated with processing compliance work to variable costs by outsourcing it
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Increasing complexities in tax provide an opportunity to form joint ventures with boutique tax firms enabling us to outsource specialist work and earn fees from making referrals rather than having to do the work ourselves
The rise in social media and other online marketing opens up a cheaper and more effective way to grow the practice
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Challenge number 2 – It is becoming increasing difficult to charge prices that reflect the quality of the work we do Pricing is a big challenge. Just like all other aspects of marketing it is an area where accountants do not get any formal training. Furthermore, there is a lack of information about pricing that is relevant to accountants. Here are some of the comments from the survey: Winning quality business at acceptable margins. Overcoming fee resistance in a relatively poor area - average fee per client in Devon is low. Getting a high price for the work I do. Clients do not value compliance work (it is a straightforward cost to them, a necessary evil) and
are unappreciative of benefits from business advice and or tax savings. However, where there is challenge there is also opportunity, and pricing is one of the biggest opportunities facing accountants. Why do we say this? Over the last 10 years Mark Wickersham has been working with hundreds of accountants in practice and has studied how the most successful firms price. One thing is clear; the easiest way to make more money is simple... get the price right. Of all areas of marketing it is changes in pricing that have the fastest and biggest impact on bottom line profit. At the risk of over-simplification there are essentially three key areas that firms should think about in order to overcome this challenge. 1) Pricing strategy – The really successful firms have a clearly defined pricing strategy. This is a
critical starting point. 2) How you price - Historically professional service firms have priced based upon time. However,
over the last 10 years we’ve seen a significant shift towards other methods of pricing, such as offering fixed fees and value pricing. Mark’s research shows that the more successful firms have found better ways to price which get much, much better results.
3) The tactics of pricing - There are a number of powerful tactics available to help you get better
results from pricing. To improve your results it is critical to understand things like how to manage client perceptions, the right way to have price discussions, the power of menu pricing, how to deal effectively with price objections and much more.
To find out more we recommend you get a copy of Mark’s book, which in May 2011 was an Amazon number one bestseller. It’s called “Effective Pricing for Accountants” and is available from Amazon. Alternatively you can get a completely free copy of a book he published in 2010 called “Practical Pricing for Accountants” by visiting www.FreePricingBook.co.uk/acc. And next we have what the survey suggested is the biggest challenge facing accountancy practices over the next five years ...
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The biggest challenge – not enough of the right sort of clients This was really interesting. It was also quite encouraging. In other words, it seems that many accountants are now focussed much more on wanting the right clients than on simply wanting more clients. We have often believed that many of the big problems in accountancy practices stem from a really weird method in valuing firms. In other words, accountancy practices are valued based upon a multiple of gross recurring fees (GRF). This is quite bizarre! It doesn’t make any logical sense that an accountancy practice is valued based on GRF rather than sustainable profit levels. A natural consequence of this is that many practitioners with a focus on exit strategy obsess over increasing their GRF rather than thinking about profitability. And so there seems an obsession in the profession over getting more clients (because this increases GRF and therefore the value of the practice). The trouble with this strategy of attracting any old client is that the wrong client drains resources, time and energy from the practice So it’s quite encouraging that – at least based on this survey – firms are now thinking about the right sorts of clients, rather than growth for the sake of growth. Here are some of the comments from the survey: Changing our client base to encompass more clients who would appreciate
business/management advice and be prepared to pay for it. Determining which clients to keep and which to jettison. Being selective of which new clients to take on. Identifying and getting the message to the right sort of clients is an ongoing challenge. The key here is to be clear on your strategy and vision. What sort of practice are you trying to build? What do you want it to look like when you come to retire? What sort of clients do you want to have? What sort of services do you want to offer? What is your pricing strategy? We said earlier that the main source of growth in an accountancy practice comes from referrals. The quality of those referrals will largely reflect the quality of your current client base. In other words, if you’re looking for corporate clients with a turnover of £1m and upwards, and yet your current practice is made up predominantly of smaller clients such as corner shops, taxi drivers, sub contract labour and tradesmen then you have a problem. You see, those sorts of clients will know lots of other people just like them. And that’s the sort of people they will refer to you. This means you’ll end up with even more corner shops, taxi drivers, sub contract labour and tradesmen. To attract more of the right sort of clients you have to be more attractive to those sorts of clients. For example, if you want more clients who are high net worth individuals and very profitable companies then you have to offer what they want. This may be for example, advanced tax planning. When you give these clients what they want – and deliver it to a high standard and with outstanding service – they will tell other people just like them.
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You need to have a clear picture of the type of client you want; your “ideal client”. It is then worth grading your current clients into categories, such as A, B, C and D with the A clients being your ideal clients. The trouble is, if you currently have a practice made up of mainly C and D clients, where do you start? Well, let us share with you a very real and very recent success story... Jason Blackman is a sole practitioner working in Lewes, East Sussex, with two other team members. Until recently he had about 100 clients, mostly sole trade accounts and tax returns, and worked long hours processing the myriad pieces of paper and receipts they sent him - ‘shoe box’ information he called it. The work was hard, tiring and unrewarding, particularly when January came round. Although he wanted and needed to make changes, he hesitated. After all, change can be frightening and although most of his clients were far from ideal, they generated the majority of his turnover. But in February 2011 he made a decision: “I talked to a lot of people and slowly gained inspiration until, one day, the change happened. I decided to ‘scale down’ my practice with the ultimate aim of having a lot less clients, but giving the ones I had left a far better service, and ultimately to earn more money. Sounds impossible, but it’s been done. I’ve managed to sell off around 85 clients to a good friend of mine (so she’s happy) and just kept the clients that I have graded ‘A’ with the grading tool in System Builder (System Builder is a tool used by AVN members). An invaluable exercise that really opened my eyes to who I’d been neglecting all this time.” The reaction he had from his clients was overwhelmingly positive, even those he sold on! “It was a slightly difficult situation with my ‘A’ clients as I wanted to increase the fees in line with Time’s Up (fixed pricing software available to AVN members). In some cases it was a fairly big jump and it was quite a scary exercise, but I’ve had such a favourable response from all my ‘A’ clients; in fact, a lot of them are just as excited about my plans as I am! I guess it’s also taught me that if clients are getting a good service, they’re willing to pay for it.” “The reaction from the 85 clients I have sold on has been amazing. Instead of being angry at me passing them on to someone else, they have been hugely complimentary in terms of the service I have given them in the past and have even wished me luck for the future. In fact, some have been so nice to me it’s been a little emotional at times!” Despite losing 85 clients, Jason has actually increased his turnover. He can now offer his remaining clients additional services which he, and they, find much more rewarding: “Now I can really give them a totally personal, complete and, above all, proactive service – much more so than I ever could before.”
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You need to have a clear picture of the type of client you want; your “ideal client”. It is then worth grading your current clients into categories, such as A, B, C and D with the A clients being your ideal clients. The trouble is, if you currently have a practice made up of mainly C and D clients, where do you start? Well, let us share with you a very real and very recent success story... Jason Blackman is a sole practitioner working in Lewes, East Sussex, with two other team members. Until recently he had about 100 clients, mostly sole trade accounts and tax returns, and worked long hours processing the myriad pieces of paper and receipts they sent him - ‘shoe box’ information he called it. The work was hard, tiring and unrewarding, particularly when January came round. Although he wanted and needed to make changes, he hesitated. After all, change can be frightening and although most of his clients were far from ideal, they generated the majority of his turnover. But in February 2011 he made a decision: “I talked to a lot of people and slowly gained inspiration until, one day, the change happened. I decided to ‘scale down’ my practice with the ultimate aim of having a lot less clients, but giving the ones I had left a far better service, and ultimately to earn more money. Sounds impossible, but it’s been done. I’ve managed to sell off around 85 clients to a good friend of mine (so she’s happy) and just kept the clients that I have graded ‘A’ with the grading tool in System Builder (System Builder is a tool used by AVN members). An invaluable exercise that really opened my eyes to who I’d been neglecting all this time.” The reaction he had from his clients was overwhelmingly positive, even those he sold on! “It was a slightly difficult situation with my ‘A’ clients as I wanted to increase the fees in line with Time’s Up (fixed pricing software available to AVN members). In some cases it was a fairly big jump and it was quite a scary exercise, but I’ve had such a favourable response from all my ‘A’ clients; in fact, a lot of them are just as excited about my plans as I am! I guess it’s also taught me that if clients are getting a good service, they’re willing to pay for it.” “The reaction from the 85 clients I have sold on has been amazing. Instead of being angry at me passing them on to someone else, they have been hugely complimentary in terms of the service I have given them in the past and have even wished me luck for the future. In fact, some have been so nice to me it’s been a little emotional at times!” Despite losing 85 clients, Jason has actually increased his turnover. He can now offer his remaining clients additional services which he, and they, find much more rewarding: “Now I can really give them a totally personal, complete and, above all, proactive service – much more so than I ever could before.”
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Other challenges The above five challenges are what the 108 accountants in our survey told us were the biggest issues facing them. However, there were a number of others that we will cover briefly here. Time and workload management Lack of time is clearly a big issue for accountants. There were many comments from the survey along the lines of, “My time management skills”, “Time to implement changes”, “Finding the time to develop the practice while acting for my existing clients”, “Making time to promote my business” and “Too much time being spent on practice management and administration matters.” Very often we find that partners are doing the wrong sort of work and the main cause of this is a lack of systems. Yes, we keep on mentioning systems, but really that is at the heart of most challenges, i.e. a lack of an appropriate system that works. With great systems it becomes much, much easier to delegate work. Too many of the wrong sort of clients will also add to the challenge of lack of time. It is perhaps worth re-reading Jason Blackman’s story above. If you have too many clients and too low fees then you’ll always be fire-fighting and won’t have the time to do the things you should be doing with your A clients. And of course, the other issue here is that as accountants we don’t get any formal training on time management. So if this is a challenge for you, it’s worth investigating some of the time management strategies available. Strategy Making changes to your practice as Jason did is one thing; knowing what to change in the first place is quite another. It may be quite simple – better quality clients, more profitable prices, being able to offer additional or added value services. The key is to decide what you and your partners really want (and crucially, to make sure that you want the same thing) then set goals and milestones accordingly. If you decide that what you really want is a better work-life balance, there’s no point developing a strategy that focuses only on increasing GRF. Examining these fundamental issues can provoke some uncomfortable questions but it’s worth doing – after all, you’ll only know if you’re on the right path once you’ve decided where you want to go. Slow paying clients, high debtor days and bad debts are a continual challenge Increasingly, the internet changes and advances the way in which we access services and the way in which we pay. Can you think of a website that will take and supply an order without first taking payment? As of 30 June 2011 cheques are no longer capable of being guaranteed. Changing practices, all the time; it’s an everyday occurrence. For one moment, take every year end creditor schedule you have ever seen. Who was the last creditor on that schedule who was paid? Probably more than 95 per cent of the time it was the accountant. Why? Because we normally bill after the work has been done. But why is this when business owners are accustomed and expect to pay for their goods and services [give or take 30-60
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days] in the accounting year? Combined with our belief that the profession will have to change to fixed pricing for work is the fact that it makes no sense whatsoever to have that fee paid after the end of the year. Our belief as to what is fair [to the client and the accountant] is that fees should be paid 75-90 per cent during the accounting period. Furthermore, timeliness of work will need to be measured from the 5 April [tax returns] and the financial year end – not from the date the records are received. I do not have a clear exit strategy and so I am worried about being able to fund retirement Too many baby boomers will be looking to retire over the next few years and there are not enough younger partners willing and able to buy them out. Younger partners will be looking at return on investment and very often it is much, much cheaper to start a practice from scratch than to buy into an existing practice. Some inter firm surveys indicate that probably more than 75 per cent of firms have lock up [WIP at retail and debtors excluding VAT] in excess of 35 per cent of gross income. This is a titanic model which will eventually restrict the ability of baby boomers to extract their capital and goodwill at full value. Research by Mark Lloydbottom and others shows that the average partner now has a cash expectation in the region of £400-£500k. How will this be returned to the baby boomer firm owner? Why and how should younger partners have the burden of payout – logical as it may seem to all? As we’ve said above, the “multiple of GRF” model is not sustainable. Firms should focus on increasing profit and cash flow as a priority over getting more clients so that their practices are more attractive to potential purchasers. Baby boomers may increasingly have to leave ‘without trail’, or at the most a 12 month payment trail. Younger accountants looking to get into partnership should learn business skills so that they are better equipped to build their own practice. There are not enough chargeable hours being recorded and billed by fee earners There is a failure to balance chargeable time and investment time. Many fee earners are recording too few chargeable hours which is affecting margins. There is a big gap (or black hole) between what firms could bill based upon their resources and what they actually bill. To fill this gap firms need to be better at marketing (so that they get more work), better at pricing (so that they get properly rewarded) and better at managing their non-chargeable time (by delegating through systems work they don’t need to be doing) There is not enough cash in the practice and so there is a constant worry about paying the bills and wages each month As discussed above, many firms have inadequate capital management and insufficient cash. Firms with too much lock up need to be better at managing WIP and debtors, better at billing and better at collecting cash. Fixed pricing and collecting fees during the accounting year would have a significant impact here. Lack of sufficient business skills amongst partners in key areas such as leadership, people management, selling skills and marketing Many firms suffer from complacency; assuming that the same level of profits and rewards can be sustained without making any changes. Partners do not have adequate commercial skills and soft skills which impact on their ability to run their practice like a business; lack of sales and marketing skills make it difficult to grow the practice; and lack of people skills make managing people difficult.
73© The Accountants Club, 2011
White Paper THE BIGGEST CHALLENGES FACING THE ACCOUNTANCYPROFESSION OVER THE NEXT FEW YEARS
White Paper THE BIGGEST CHALLENGES FACING THE ACCOUNTANCY PROFESSION OVER THE NEXT FIVE YEARS
© The Accountants Club, 2011 Page 13
days] in the accounting year? Combined with our belief that the profession will have to change to fixed pricing for work is the fact that it makes no sense whatsoever to have that fee paid after the end of the year. Our belief as to what is fair [to the client and the accountant] is that fees should be paid 75-90 per cent during the accounting period. Furthermore, timeliness of work will need to be measured from the 5 April [tax returns] and the financial year end – not from the date the records are received. I do not have a clear exit strategy and so I am worried about being able to fund retirement Too many baby boomers will be looking to retire over the next few years and there are not enough younger partners willing and able to buy them out. Younger partners will be looking at return on investment and very often it is much, much cheaper to start a practice from scratch than to buy into an existing practice. Some inter firm surveys indicate that probably more than 75 per cent of firms have lock up [WIP at retail and debtors excluding VAT] in excess of 35 per cent of gross income. This is a titanic model which will eventually restrict the ability of baby boomers to extract their capital and goodwill at full value. Research by Mark Lloydbottom and others shows that the average partner now has a cash expectation in the region of £400-£500k. How will this be returned to the baby boomer firm owner? Why and how should younger partners have the burden of payout – logical as it may seem to all? As we’ve said above, the “multiple of GRF” model is not sustainable. Firms should focus on increasing profit and cash flow as a priority over getting more clients so that their practices are more attractive to potential purchasers. Baby boomers may increasingly have to leave ‘without trail’, or at the most a 12 month payment trail. Younger accountants looking to get into partnership should learn business skills so that they are better equipped to build their own practice. There are not enough chargeable hours being recorded and billed by fee earners There is a failure to balance chargeable time and investment time. Many fee earners are recording too few chargeable hours which is affecting margins. There is a big gap (or black hole) between what firms could bill based upon their resources and what they actually bill. To fill this gap firms need to be better at marketing (so that they get more work), better at pricing (so that they get properly rewarded) and better at managing their non-chargeable time (by delegating through systems work they don’t need to be doing) There is not enough cash in the practice and so there is a constant worry about paying the bills and wages each month As discussed above, many firms have inadequate capital management and insufficient cash. Firms with too much lock up need to be better at managing WIP and debtors, better at billing and better at collecting cash. Fixed pricing and collecting fees during the accounting year would have a significant impact here. Lack of sufficient business skills amongst partners in key areas such as leadership, people management, selling skills and marketing Many firms suffer from complacency; assuming that the same level of profits and rewards can be sustained without making any changes. Partners do not have adequate commercial skills and soft skills which impact on their ability to run their practice like a business; lack of sales and marketing skills make it difficult to grow the practice; and lack of people skills make managing people difficult. White Paper
THE BIGGEST CHALLENGES FACING THE ACCOUNTANCY PROFESSION OVER THE NEXT FIVE YEARS
© The Accountants Club, 2011 Page 14
There is a need to recognise that a proportion of non-chargeable time should be spent on building skills in non-technical areas through training
74© The Accountants Club, 2011
White Paper THE BIGGEST CHALLENGES FACING THE ACCOUNTANCYPROFESSION OVER THE NEXT FEW YEARS
White Paper THE BIGGEST CHALLENGES FACING THE ACCOUNTANCY PROFESSION OVER THE NEXT FIVE YEARS
© The Accountants Club, 2011 Page 15
Concluding comments And finally, although a lack of profitability was cited as quite a major challenge, we’ve not specifically dealt with that here simply because it is really a symptom of everything else above. Profit is just the end result. It is a consequence of getting the right clients, charging the right price, managing the workload effectively, having a great team of people and so on. Those who are in the business of providing accountancy services rightly see the immediate challenges as being of great importance while those of us who now view the life of a practitioner from outside or alongside see a different perspective. Some of these challenges may not be at the forefront of your mind, but they are external challenges [and opportunities] that the accountancy profession will need to confront and address. The issues raised in this White Paper will be examined in greater depth in a more extensive report, ‘Your blueprint for a better accountancy practice’, which will be published in September 2011. For more details and to obtain a copy of this report go to www.AccountantsResearch.co.uk. The Accountants Club is designed to give you insights, support, training and tools to help you serve your clients better than ever before and to do so in a way that is more profitable and rewarding for you than ever before. Members of The Accountants Club benefit from ...
Unlimited use of the AVN BenchMark software, so you can benchmark your practice against other UK accountancy firms, and do the same for your clients and prospects.
Quarterly regional training that brings you the latest in best practice and provides a forum to
learn how other professionals are getting great results.
Regular newsletter - The Accountants Club Bulletin - which is full of profit-building ideas, advice, case studies and best practice to help you build an even more profitable and successful accountancy practice.
Access to a member-only website with more downloadable tips, advice, case studies and
success stories.
... And much, much more. To find out more about The Accountants Club go to www.myaccountantsclub.co.uk.
75www.myaccountantsclub.co.uk
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page79
Appendix2:HowUKaccountantsarereally
performing
ThetablesbelowaresamplesofthedataproducedbyTheAccountantsClub’sBenchMarksoftware
andshowhowaccountantsacrossthecountryareperforminginsomeoftheareascoveredbythis
Blueprintreport.
ThefullBenchMarkaccountantsreportoffersdetailedanalysisofyourownfinancialperformance
comparedtootherUKaccountants.ItisavailabletomembersofTheAccountantsClubasoneofthe
benefitsofmembership–pleaseseetheResourcessectionformoredetails.
Thedataherereflectsalmost300independentUKpractices,andwasextractedfromthesoftwarein
September2011.
Bettersystems
Industryaverages
Measure Sample Worst
Lower
quartile Median
Upper
quartile Best
Jobscompletedontime 185 0.0% 50.0% 80.0% 90.0% 100.0%
Averageturnaroundtime
(days)
188 120.0 60.0 37.0 21.0 10.0
WIPdays 278 144.7 48.9 24.5 7.2 0.0
Debtordays 288 216.1 93.0 70.8 45.1 ‐12.8
Betterpricing
Industryaverages
Measure Sample Worst
Lower
quartile Median
Upper
quartile Best
Profitperpartner 294 £‐13,319 £35,000 £68,706 £103,465 £224,372
Profitperfeeearner 283 £‐5,038 £11,846 £18,712 £26,929 £97,166
Netprofitmargin 295 ‐4.18% 21.60% 31.26% 37.86% 70.00%
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
76www.myaccountantsclub.co.uk
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page80
Appendix3–ExampleofastandardmeetingagendaThisisthefullversionofthemeetingagendausedbyThoburn&Chapmanasdescribedinthe
chapter“Bettersystems”onpage19.
ClientMeetingAgendaClientname: Circulation:
With: Teammember:
Venue: Dateandtime:
Principalitemstobeconsidered
Item Areatodiscuss Action Action
by:
1 Agreethefinalmattersoutstanding
relatingtoyouraccounts
2 AdviseclientofVATreclaimmissed
3 Directors'loanaccountscurrently
overdrawn(seeattached).Howarethese
toberepaid?Capitalintroducedorputa
dividendthroughbefore(date)?
4 Shouldanyofthemileagecostsbe
chargedtothedirectors'loanaccounts?
5 Considerthedraftaccounts‐canthese
nowbeagreed?
6 Whatisthevalueofyourbusinessgiven
thesefiguresandhasitgrownfromlast
year?
7 Agreedraftletterofcommentand
proceduresforresponsesfromclient.
8 ObtainDirectDebitmandatefromclient.
Checkpaymentoffeesin‐linewithfirm
policy.
Taxation
9 Reviewthedrafttaxcomputationsand
estimateoffuturetaxliabilitiesanddue
paymentdates.
10 Discussminimisationstrategies.
11 Whatdoyouexpectthetaxableprofitsto
be?
0100%
↓↓↓↓AdvancedBespokeStandardNone
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Challenges
12 Whatchallengesareyoucurrently
workingthrough?
13 Whatstopsyousleepingatnight?
Aspirations
Key
measure
Whatyou
have
Whatyou
want
Sales
Profits
Tax
Takehome
Personal
wealth
Whatelse?
Hours
worked
Profitability
14 Howisthebusinessdoingatpresent?
Whataretheemergingtrends?
15 Discussareasinwhichthebusinesscould
improvecurrentprofitability.
Personalfinancialplanning
16 Doestheclientwishtoconsiderthe
potentialwriteoffofo/sloans,credit
cardsorredeemedloans/mortgages?
17 Haveyoureceivedyourmortgage
recently?
18 Haveyouconsideredhowyourfamily
wouldreplaceyourincomeshouldyou
dieorbecomecriticallyilllongterm?
19 Howdoyouintendtofundyourincome
inretirement?Whenwasitlast
reviewed?
20 Isthegovernmentoryourchildren
currentlythemainbeneficiaryofyour
estate?
21 DoyouhaveaWill?
22 Doyouenjoypayingtaxonyoursavings?
23 Wouldyouliketoincreaseeitherthe
growthorincomefromyour
investments?
24 Haveyouconsideredtheimplicationsof
yourdeathonyourpartnersorco‐
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
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Theresearchproventhingseveryfirmshoulddo
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directors?
25 Doyouhavea‘BusinessWill’?
26 Haveyouconsideredthebenefitsofa
staffpensionscheme?Doyouhaveonein
place?
27 Whenwasthelasttimeyouhada
completereview?
Corporateplanning
28 Istherealongtermstrategyinplace?
29 Wheredoyouwanttobein5yearstime?
30 Areyouoncoursetogetthere?
31 Isthereadequateprotectionagainst
circumstanceswhichcouldaffectincome
orthelongtermsecurityofthebusiness?
32 HaveyoubeenintroducedtoThoburn&
Chapman’sPerformanceMeasurement
System‘TheNumbers’
Doyouknowhowthefollowingcanhelpyou?
33 FinancialPerformanceReview
BenchmarkReports
BusinessBuilder
GoalGetter
OnePagePlans
BusinessEdge
SystemBuilder
MakingitHappen
34 Wouldyoubeinterestedinjoininga
BusinessBuilderForum?
Otherareasyouwishtodiscuss?
35 Doyouknowofafriendorbusiness
acquaintancewhoyouthinkwould
benefitfromameetingwithThoburn&
Chapman?ThisismeetingisFREE.
PLEASEGIVEDETAILS‐‐‐>
(Asathankyouwewillgiveyourfriend/
acquaintanceaBusinessBuildersession
worth£500freeofchargeasagiftfrom
you.)
36 ANDFINALLY……………….Areyouhappy
witheverythingwehavedoneforyouso
far?
Pleasecompleteandreturnfeedback
formtousatthismeetinginasealed
envelope.
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
79www.myaccountantsclub.co.uk
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page83
Appendix4–Referencesandfurtherreading
Publications
Theprofitableandsustainablepractice,ICAEW,2003
PracticeWhatYouPreach,DavidMaister,2001
GoodtoGreat,JimCollins,2001
Engagingforsuccess:Enhancingperformancethroughemployeeengagement–DavidMacleodand
NitaClarke–ReporttoGovernment2009(http://www.bis.gov.uk/files/file52215.pdf)
TheUK’sbestaccountancypractices,StevePipe,2011
Yourblueprintforabettertaxpractice,MarkWickershamandStevePipe,2010
Effectivepricingforaccountants,MarkWickersham,2011
YouTubeChannels
ThefollowingYouTubechannelscontainawealthofinsightsandadviceforaccountantsaroundthe
issuesraisedinthisreport:
UKaccountants ThisistheofficialchannelofTheAccountantsClub
MyTaxClub ThisistheofficialchannelofTheTaxClub
Pricing4Accountants ThisisMarkWickersham’schannelforhelpingaccountantstoprice
better
AccountantsMarketing Thischannelcontainsawealthofideasforhelpingaccountantswith
theirmarketing
ProactiveAccountant ThischannelwillbelaunchedinDecember2011
Tofindthesechannelsgotowww.YouTube.comandtypethechannelnameintothesearchengine.
Itisrecommendedthat–ifyoulikethechannel–yousubscribetothechannel(whichisfree).That
wayyouwillbenotifiedbyYouTubewhenevernewvideosareuploadedontothechannel.
80www.myaccountantsclub.co.uk
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page85
otherpeopleabouthowincredibleyou
are.
serviceexperience
Systematicallyaskclientstorateand
commentontheserviceandsupport
theyreceivefromyourfirm.
Variouscustomer
feedbacksystemsin
SystemBuilder
Addyourfurtheractionshere,
includingthoseinspiredbythe“Key
thoughts”and“3actions”boxes
throughoutthisreport
Action RelatedAVNtool
Who Whenby
Better systems
Meetwithclientsmoreoften–anduse
formalwrittenagendasforevery
meeting.
Therearedozensof
standardagendasin
SystemBuilder
Improvespeedofresponseand
turnaroundtimesbyusingsystemsand
technologythatimproveefficiency,
alleviatebottlenecksandreduceerrors.
SystemBuildersoftware
Proactivelygiveeveryclientand
prospectaPerformanceMeasurement
andImprovementsystem–explain
howitworks,anduseittowinnew
clientsandcross‐sellmoretoexisting
AVNPMIsystem
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page84
Appendix5–Suggestedactionplan
Thebestpracticesrevealedbythisresearchsuggestthefollowingasastartingpointforanaction
planforsubstantiallyimprovingtheperformanceandprofitabilityofyouraccountancypractice.
NB:ForthebenefitofAVNmemberswehavealsoindicatedtherelevantAVNtools,resourcesand
softwarethatwillhelpyoutoimplementtheactionpointsmoreeffectively.
Action RelatedAVNtool
Who Whenby
Better service
Decidewhattypeofclientsyoureally
want.Andidentifywhatthattypeof
clientreallywantsfromareallygood
accountant.
‘Idealclientprofile’
system
Createaclear,compellingandconcise
wayofcommunicatingwhatmakes
yourfirmperfectlyplacedtomeetthe
needsofyouridealclients–andensure
thatitisusedbyallyourteamwithall
yourprospectsandclients.
Highimpact7minute
streamingvideoyoucan
show/emailtoallclients
andprospects
Proactivelyoffertoproducea
diagnosticreportforeveryclient
settingouttheirkeyoptionsfor
improvingtheirprofits,cashflow,
businessvaluation,taxbillsand
personalwealth.
Improvement
Possibilitiesreportfrom
OnTracksoftware.
Otherresourceslistedon
the“KeyAVNresources
forhelpingclients”
document
Considerwhatguaranteesyoushould
offer.Commononesamongbest
practicefirmsinclude:30daysaccounts
turnaroundguaranteeand“Money
backifnotdelighted”
Identifywhatelseyoucandoto
dramaticallyimprovetheclientservice
experiencesothattheyproactivelytell
The“Wow!How?”
processcontainsc.100
ideasforimprovingthe
81www.myaccountantsclub.co.uk
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page86
clients.
Everyyearshoweveryunincorporated
clienttheprosandconsof
incorporationandtheamountoftax
theycouldsaveoverthenext10years.
IncorporationTax
Plannersoftwaretoshow
themthesavings,create
areportinsecondsand
tocalculateavaluebased
feeproposalfor(a)the
coreworkand(b)the
extrataxsavingsfrom
capitalisinggoodwill
Everyyearshoweveryincorporated
clientthevariouswaysofextracting
profits–andtherelatedtaxsavings.
RemunerationPlanner
softwaretoshowthem
thesavingsandcreatea
reportinseconds
TaxstrategiesfromAVN
Tax
Developstandardmeetingagendasfor
allyourmostcommonmeetingswith
clients.
SystemBuildercontains
upto23standard
meetingagendas
Identifysuitablethirdpartyexpertsto
forgestrategicallianceswithinthe
fieldofadvancedtaxplanning,business
advisory,wealthmanagement,
corporatefinanceandemployment
law.
Ensurethatyouincurnocostsorrisks
butsimplyshareintherevenue
generatedasaresultofyouralliance
partnerspayingyoumarketleading
payaways.
AVNhasidentified
suitablealliancepartners
foryouwhocandeliver
allofthatandmore.
Revisityourengagementlettersinthe
lightofthefindingsinthisreport.
Workouthowtomakethebestuseof
socialmedia
Addyourfurtheractionshere,
includingthoseinspiredbythe“Key
thoughts”and“3actions”boxes
throughoutthisreport
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page85
otherpeopleabouthowincredibleyou
are.
serviceexperience
Systematicallyaskclientstorateand
commentontheserviceandsupport
theyreceivefromyourfirm.
Variouscustomer
feedbacksystemsin
SystemBuilder
Addyourfurtheractionshere,
includingthoseinspiredbythe“Key
thoughts”and“3actions”boxes
throughoutthisreport.
Action RelatedAVNtool
Who Whenby
Better systems
Meetwithclientsmoreoften–anduse
formalwrittenagendasforevery
meeting.
Therearedozensof
standardagendasin
SystemBuilder
Improvespeedofresponseand
turnaroundtimesbyusingsystemsand
technologythatimproveefficiency,
alleviatebottlenecksandreduceerrors.
SystemBuildersoftware
Proactivelygiveeveryclientand
prospectaPerformanceMeasurement
andImprovementsystem–explain
howitworks,anduseittowinnew
clientsandcross‐sellmoretoexisting
AVNPMIsystem
82www.myaccountantsclub.co.uk
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page86
clients.
Everyyearshoweveryunincorporated
clienttheprosandconsof
incorporationandtheamountoftax
theycouldsaveoverthenext10years.
IncorporationTax
Plannersoftwaretoshow
themthesavings,create
areportinsecondsand
tocalculateavaluebased
feeproposalfor(a)the
coreworkand(b)the
extrataxsavingsfrom
capitalisinggoodwill
Everyyearshoweveryincorporated
clientthevariouswaysofextracting
profits–andtherelatedtaxsavings.
RemunerationPlanner
softwaretoshowthem
thesavingsandcreatea
reportinseconds
TaxstrategiesfromAVN
Tax
Identifysuitablethirdpartyexpertsto
forgestrategicallianceswithinthefield
ofadvancedtaxplanning,business
advisory,wealthmanagement,
corporatefinanceandemployment
law.
Ensurethatyouincurnocostsorrisks
butsimplyshareintherevenue
generatedasaresultofyouralliance
partnerspayingyoumarketleading
payaways.
AVNhasidentified
suitablealliancepartners
foryouwhocandeliver
allofthatandmore.
Revisityourengagementlettersinthe
lightofthefindingsinthisreport.
Workouthowtomakethebestuseof
socialmedia.
AVNmembersget
substantialdiscountson
4PMarketingcourses–
pleasetalktoyourclients
managerfordetails.
Addyourfurtheractionshere,
includingthoseinspiredbythe“Key
thoughts”and“3actions”boxes
throughoutthisreport.
83www.myaccountantsclub.co.uk
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must doYourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page87
Action RelatedAVNtool
Who Whenby
Better pricing
Makeastrategicdecisionabouthow
youwillusepricingaspartofyour
positioning–i.e.doyouwanttobe
“cheapandcheerful”or“premium
pricedforapremiumservice”?
Revisitthewayyoupriceeverything.
Youcanalmostcertainlychargemoreif
youmoveawayfromtimebasedbilling
tovaluepricingand/orfixedprices.
TaxCompliancesoftware
forpricingtaxreturns
Time’sUp!softwarefor
pricingmostotherthings
wherevaluepricingisn’t
possible
Carryout‘what‐if’analysisto
understandthepossibleimpactson
yourpracticeofchangingyourprices.
SimpleStuffThatWorks
Module1
BusinessPotential
software
Createaplanforprogressively
upgradingorexitingclientswhodonot
fityouridealclientprofile–including
thosewhoarenotwillingtopayyour
newprices.
84www.myaccountantsclub.co.uk
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must doYourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page88
Offereveryclientthechancetocollect
theirdebtsbyDirectDebit–andthen,
outoffairness,askforpermissionto
useDirectDebitonyourfeestothem.
DirectDebitfacility
availablethroughAVN–
whichwillgiveyou
preferentialtermsanda
payawayifyouwantone
Addyourfurtheractionshere,
includingthoseinspiredbythe“Key
thoughts”and“3actions”boxes
throughoutthisreport.
Action RelatedAVNtool
Who Whenby
Better team engagement
Decidewhatyouwantfromyour
practice–includingthefinancial
rewardsyouwantittogiveyou,and
thelife‐workbalanceyouwantfromit.
Andthenmakeeverysubsequent
decisionsoastohelpyouachieve
thosethings.
Shareyourvisionwithyourentireteam
–andensurethateverybodygenuinely
buysintoit.
Benchmarkyourownpracticetogeta
fact‐basedunderstandingofyourown
AVNBenchMark
softwarewill
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page88
Offereveryclientthechancetocollect
theirdebtsbyDirectDebit–andthen,
outoffairness,askforpermissionto
useDirectDebitonyourfeestothem.
DirectDebitfacility
availablethroughAVN–
whichwillgiveyou
preferentialtermsanda
payawayifyouwantone
Addyourfurtheractionshere,
includingthoseinspiredbythe“Key
thoughts”and“3actions”boxes
throughoutthisreport.
Action RelatedAVNtool
Who Whenby
Better team engagement
Decidewhatyouwantfromyour
practice–includingthefinancial
rewardsyouwantittogiveyou,and
thelife‐workbalanceyouwantfromit.
Andthenmakeeverysubsequent
decisionsoastohelpyouachieve
thosethings.
Shareyourvisionwithyourentireteam
–andensurethateverybodygenuinely
buysintoit.
Benchmarkyourownpracticetogeta
fact‐basedunderstandingofyourown
AVNBenchMark
softwarewill
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page89
strengthsandweaknessesasastarting
pointfordevelopingandfinetuning
yourownimprovementactionplan.
automaticallycreatea
verydetailedconfidential
reportforyou
Monitorteammemberhappiness. TeamMatterssoftware
Improveyourmeetingswiththeteam.
Considerimprovingtheirfrequencyand
structure,makingthemmoreinclusive,
andinvolvingtheteammoreinthekey
issuesanddecisions.
Teammeetingsystemsin
SystemBuilder
UseaPerformanceMeasurementand
Improvementsysteminyourown
businessto:
• Identifyallthenumbersthatreally
matter
• Measurethemregularlyand
systematically
• Focustheentirebusinesson
improvingthosenumbers
OnePagePlanandAVN
PMIsystem
Sharethefirm’skeyperformance
measureswithyourteam–andenlist
theirhelpincreatingandimplementing
animprovementactionplanforthose
KPIs.
OnePagePlanandAVN
PMIsystem
Usepersonalityprofilingwhen
recruitingteammembers.
Askyourclientmanager
forhelpwiththis
Addyourfurtheractionshere,
includingthoseinspiredbythe“Key
thoughts”and“3actions”boxes
throughoutthisreport.
85www.myaccountantsclub.co.uk
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page89
strengthsandweaknessesasastarting
pointfordevelopingandfinetuning
yourownimprovementactionplan.
automaticallycreatea
verydetailedconfidential
reportforyou
Monitorteammemberhappiness. TeamMatterssoftware
Improveyourmeetingswiththeteam.
Considerimprovingtheirfrequencyand
structure,makingthemmoreinclusive,
andinvolvingtheteammoreinthekey
issuesanddecisions.
Teammeetingsystemsin
SystemBuilder
UseaPerformanceMeasurementand
Improvementsysteminyourown
businessto:
• Identifyallthenumbersthatreally
matter
• Measurethemregularlyand
systematically
• Focustheentirebusinesson
improvingthosenumbers
OnePagePlanandAVN
PMIsystem
Sharethefirm’skeyperformance
measureswithyourteam–andenlist
theirhelpincreatingandimplementing
animprovementactionplanforthose
KPIs.
OnePagePlanandAVN
PMIsystem
Usepersonalityprofilingwhen
recruitingteammembers.
Askyourclientmanager
forhelpwiththis
Addyourfurtheractionshere,
includingthoseinspiredbythe“Key
thoughts”and“3actions”boxes
throughoutthisreport.
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Action RelatedAVNtool
Who Whenby
Other
Werecommendthatyouattendthe
seminar“Proactivity”.Itispresented
bytheauthorsofthisreport,andatit
youwilllearnexactlyhowto
implementthisrecommendedaction
plan.Whilstplacesarenormally£200,
asareaderofthisreportyoucan
attendforfree.Pleaseseethe“Free
Resources”appendixonthenextpage
forfulldetails.
AVNmemberscansend
anunlimitednumberof
teammemberstothe
Proactivityseminarfree
ofcharge.
Wealsorecommendthatyouusethe
otherresourceslistedinthe“Free
Resources”sectionsincetheywillhelp
youimplementtheseactionswithin
yourpractice.
Addyourfurtheractionshere.
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
87www.myaccountantsclub.co.uk
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
Yourblueprintforabetteraccountancypractice
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Appendix6–FreeresourcesthatcanhelpThissectionlistssomeofthekeyresourcesavailabletohelpyouimplementmanyoftheideas
withintheBlueprintReportandemulatetheresultsofthefirmsthatfeatureinthecasestudies.
Freeresources
Freetraining–Youarestronglyrecommendedtoattendtheseminar“Proactivity”.Itis
presentedbytheauthorsofthisreport,andatittheywillrevealtheprecise“howto’s”for
gettingtheverybestfrommanyoftheactionsrecommendedinthisreport.Placesareusually
£200each,butasareportreaderyoucanattendasourVIPguest.ToclaimyourfreeVIPguest
placegotowww.AccountantsSeminars.co.uk/2011Blueprintandselectyourchosenevent.
Freesoftware–Market‐leadingbenchmarkingsoftwareenablingyoutobothbenchmarkyour
ownaccountancypracticeandtoshowyourclientshowtheirprofitsandperformancecompare
withtheircompetitorsiscurrentlyavailablefreeofchargetomembersofTheAccountantsClub
(normallythissoftwaresellsfor£300).Pleasevisitwww.myaccountantsclub.co.ukforfurther
information.
Freeonlinelearning–ThefollowingYouTubechannels,createdbytheauthors,areanexcellent
sourceofadditionalinsightsandtipsonhowtoaddresstheissuesraisedinthisreport:
UKaccountants
MyTaxClub
Pricing4Accountants
AccountantsMarketing
ProactiveAccountant
Werecommendyousubscribetothesechannels(whichisfreetodo);thatway(providedyou
ticktheboxcircledbelow),youwillgetanemailwheneveranewvideoisuploaded.
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Freebook–MarkWickersham’sbook,Practicalpricingfor
accountants,containsover30pagesofideasandadviceto
helpyousetyourpricesformaximumprofit,includingdetailed
casestudiesshowinghowaccountancyfirmsjustlikeyours
havesubstantiallyimprovedtheirprofitsbychangingtheir
attitudetopricing.Youcangetafreecopybyvisiting
www.FreePricingBook.co.uk/BP.
Lowcostresources
Support,training,softwareandadvice–MembershipofbothTheTaxClubandThe
AccountantsClubarejust£120+VATeachperannumandprovideyouwiththeopportunityto
learnandsharebestpracticeandhelpyoutobuildontheideascontainedwithinthisresearch
report.Pleasevisitwww.MyTaxClub.co.ukandwww.MyAccountantsClub.co.ukfordetails.
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
89www.myaccountantsclub.co.uk
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Appendix7–Completesurveyresults
Thestatisticswehavequotedinthemainbodyofthisreportlargelyrelatetothedifferences
betweenStarandLaggardpractices.ThisAppendixcontainsoverallresultsfromall156respondents.
Completeresults:1‐Numberofpartners
Completeresults:2‐Isthefirmassuccessfulasyouwouldlikeittobe?
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
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Completeresults:3‐Doyousystematicallymeasurehowhappyyourteamare?
Completeresults:4‐Doestheentireteamfullyunderstandtheowner'svisionforthefirm?
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
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Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page95
Completeresults:5‐Howmanyformalmeetingsdoesyourfirmhaveayearwiththewholeownershipteam(ie.
partnersanddirectors)?
Completeresults:6‐Howmanyformalmeetingsdoesyourfirmhaveayearwiththewholeleadershipteam(ie.
partners,directorsandmanagers)?
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
92www.myaccountantsclub.co.uk
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Theresearchproventhingseveryfirmshoulddo
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Completeresults:7‐Howmanyformalmeetingsdoesyourfirmhaveayearwiththeentireteam?
Completeresults:8‐HowmanyKPIsdoesyourfirmregularlymeasurethatdon'tcomefromatraditionalsetof
accounts(e.g.teamhappiness,salesconversionrate)?
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
93www.myaccountantsclub.co.uk
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Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page97
Completeresults:9‐Aremostofyourfirm'sKPIssharedwiththeentireleadershipteam(ie.partners,directorsand
managers)?
Completeresults:10‐Aremostofyourfirm'sKPIssharedwiththeentireteam?
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
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Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page98
Completeresults:11‐Doyouusepersonalprofilingaspartofyourrecruitmentprocess?
Completeresults:12‐Wouldyoudescribeyourfirmasafastgrowingpractice(ie.annualgrowthofatleast20%)?
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
95www.myaccountantsclub.co.uk
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must doYourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page99
Completeresults:13‐Whichsocialmediachannelsdoyouseeasbigopportunitiesforaccountants?
Completeresults:14‐Howoftendoyoumeetwithaclientandleavethemeetingwithsomeextraworkthatyoudidn't
havebeforethemeetingstarted?(%oftime).
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Completeresults:15‐Haveyousystematicallyaskedatleastthetophalfofyourclientswhattheyregardasexcellent
service?
Completeresults:16‐Isyourfirmasproactiveasitshouldbe?
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
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Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must doYourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page101
Completeresults:17‐What%ofyourclientbaseishighlypricesensitive(i.e.likelytoswitchaccountantifyouputup
yourfeesbymorethaninflation)?
Completeresults:18‐Whataretwocharacteristicsofyourmostpricesensitiveclients?
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Completeresults:19‐What%ofyourfeesarecalculatedonatime‐costbasis?
Completeresults:20‐What%ofyourfeesareagreedinadvanceonafixedpricebasis?
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
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Completeresults:21‐What%ofyourfeesarevaluebased?
Completeresults:22‐What%ofyourfeesarecollectedbystandingorder?
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
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Completeresults:23‐What%ofyourfeesarecollectedbydirectdebit?
Completeresults:24–What%ofyourfeesarecoveredbyacustomersatisfactionguarantee?
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
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Theresearchproventhingseveryfirmshoulddo
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Completeresults:25‐What%ofyourfeesarecoveredbyaturnaround‐timeguarantee?
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Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page106
Completeresults:26‐Howaretheabovedealtwithinyourengagementletters?
Completeresults:27‐Domostofyourclientswanttopaythelegalminimumamountoftax?
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
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Completeresults:28‐Isitacceptableforanaccountanttoknowaboutataxplanningideathatcouldsaveaclienta
greatdealofmoneybutnottelltheclientaboutitbecausetheyassumetheclientwon'tbeinterested?
Completeresults:29‐Isitacceptableforanaccountanttoknowaboutataxplanningideathatcouldsaveaclienta
greatdealofmoneybutnottelltheclientaboutitbecausetheydon'thavetimetotelltheclient?
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page106
Completeresults:26‐Howaretheabovedealtwithinyourengagementletters?
Completeresults:27‐Domostofyourclientswanttopaythelegalminimumamountoftax?
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
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Completeresults:30‐Isitacceptableforanaccountanttoknowaboutataxplanningideathatcouldsaveaclienta
greatdealofmoneybutnottelltheclientaboutitbecausetheyhavethetimebutcan'tbebotheredtotelltheclient?
Completeresults:31‐Inwhat%ofnewclientsdoyoufindamajorerrormadebythepreviousaccountant?
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Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page107
Completeresults:28‐Isitacceptableforanaccountanttoknowaboutataxplanningideathatcouldsaveaclienta
greatdealofmoneybutnottelltheclientaboutitbecausetheyassumetheclientwon'tbeinterested?
Completeresults:29‐Isitacceptableforanaccountanttoknowaboutataxplanningideathatcouldsaveaclienta
greatdealofmoneybutnottelltheclientaboutitbecausetheydon'thavetimetotelltheclient?
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
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Theresearchproventhingseveryfirmshoulddo
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Completeresults:32‐Inwhat%ofnewclientsdoyoufindamajoromissionbythepreviousaccountant?
Completeresults:33‐Inwhat%ofnewclientsdoyoufindaminorerrorbythepreviousaccountant?
Yourblueprintforabetteraccountancypractice
Theresearchproventhingseveryfirmshoulddo
www.myaccountantsclub.co.uk Page108
Completeresults:30‐Isitacceptableforanaccountanttoknowaboutataxplanningideathatcouldsaveaclienta
greatdealofmoneybutnottelltheclientaboutitbecausetheyhavethetimebutcan'tbebotheredtotelltheclient?
Completeresults:31‐Inwhat%ofnewclientsdoyoufindamajorerrormadebythepreviousaccountant?
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
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Completeresults:34‐Inwhat%ofnewclientsdoyoufindaminoromissionbythepreviousaccountant?
Yourblueprintforabetteraccountancypractice
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www.myaccountantsclub.co.uk Page109
Completeresults:32‐Inwhat%ofnewclientsdoyoufindamajoromissionbythepreviousaccountant?
Completeresults:33‐Inwhat%ofnewclientsdoyoufindaminorerrorbythepreviousaccountant?
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
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Completeresults:36‐Doyouwanttosubstantiallymakechangesasabove?
Completeresults:37
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Completeresults:35‐Whatarethemostcommonerrorsandomissionsyoucomeacross?
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
Figure12:Howfeesarecalculated
Completeresults:1‐Doyouwanttosubstantiallymakechangesasabove?
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Time‐costbasis Fixedprice Valuebased
Stars
Laggards
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Reducetheamount
of'overIme'you
workbeyonda
convenIonal9‐5?
Increasethenumber
ofclientsthefirm
has?
Increasetheaverage
feespaidperclient?
Reduce'lockup'–i.e.
debtors+Workin
progress?
Improveclient
service?
Yes
No
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Completeresults:38‐Howdoyoufeelabouttheexternalthreatsabove?
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do
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Completeresults:36‐Doyouwanttosubstantiallymakechangesasabove?
Completeresults:37‐%ofannualaccountjobsthatareturnedaroundwithin30days.
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Notes
Your blueprint for a better accountancy practiceThe key research-proven things that every practice that really cares about its clients, reputation and future must do