I wrote this for a blog site for accountants, but it’s applicable to most businesses, service based or not.
Every accountant is aware there is fee pressure on compliance services. If it’s not bookkeepers trying to get a piece of the pie, then accounting software is doing so much more, and that pressure can only increase. Gone are the days when most of our work can come from compliance services. But it’s very hard to move from what we’ve been doing all these years, which has being paying all the overheads and the salaries and providing us with a living, and then jump into advisory.
What is advisory work anyway?
We’ve been doing it all along, except it’s not been a major feature of our work. It’s come from the conversations after we’ve done the compliance work or when the client rings up and asks a question.
Advisory doesn’t have to be about learning many more new things and having products that you have to train your team on and then try and sell. We all know how difficult it is for accountants to sell anyway. It’s not in our nature. We are there to advise. There’s a hint. Advisory can’t be that difficult if our raison d’être is to advise.
A fundamental shift
What we need is a change of mindset. Our existing mindset is predicated on charging for every available minute because that is our product. Our time is what we sell. It isn’t. What we are selling is our expertise. If we stick with time as our measure, then we will be beaten by cheaper market entrants. If we sell expertise, we can maintain our position as trusted advisors and the first port of call for our clients.
To do that we have to, if not bin the timesheet, at least allow for some non-productive time during the week for everybody in our team.
How a hotel does it
We’ve just been away to Malta for a week. We stayed at a good hotel and the overwhelming impression we got from the hotel wasn’t one of efficiency, cleanliness and a pleasant environment. These are now hygiene factors. We expect these in hotels. The overwhelming impression was that the staff in the hotel talked to us. Not just about what they were doing or what they were bringing us or what we wanted, but engaged us in conversations. There was capacity built in, so that they could all spend a moment with us. That started with management and went all the way to the gardener. Everybody would stop and there was a short conversation.
What we need to do
We need to build capacity into our team so that they can have conversations with clients. We know that conversations lead to more work. They also lead to better relationships with our clients, so they are less likely to be transactionally inclined and go for a cheaper alternative just because it’s cheaper. If you allow your clients to only measure you on simple criteria, namely, cost and timeliness, then they will do so. And if their expectations are simply that you and every other accountant produces accounts on time, their only other measure is cost. You are giving them carte blanche to find somebody cheaper.
If you develop relationships so that you are engaged with what they do, understand them better, will do something for nothing occasionally just because you’re nice people, and you’re helpful, then they are more likely to value you differently. They will not be able to develop that measure of value with anybody else because they will be stuck to you. You want sticky clients.
Costs and benefits
There’s a cost to this. There will be some non-productive time. Most of it I suggest will be at partner level. Partners are more likely to be able to simply pick up the phone or meet a client just because, to find out how they are, but it’s no hardship for you to tell your team that they can ring the clients to simply talk to them; that they are not driven completely by their timesheet, and they are not measured completely by that either.
There’s a cost to not doing it, too. The gradual erosion of your practice’s compliance work by cheaper entrants. Higher staff turnover.
Pay rises and promotions shouldn’t be predicated just on productivity. It’s difficult enough to get good people, let alone keep them. We all know how expensive it is to get new people, and train them, only to see them leave after a short time. We need to retain our team. Allowing them to act as they see fit in your and their best interests takes pressure off partners and gets the best out of your team. That’s another win for you – they are more likely to stay if their job is rewarding of itself, so they can be rewarded for doing better, rather than for doing more.
You want your clients to be able to talk to you before they make financial decisions so that you do not have to pick up the pieces afterwards and then charge them for something which has already cost them dearly. You want them to have a smooth and easy life as possible and to grow their businesses, which is to their and your benefit. You know that any reverses in their business will take some time to recover back to existing levels, let alone grow past them. So making sure that they can speak to you, and they feel they will not be charged for every five minutes of your time, will be a benefit to both of you.
For certain, some new work will come from this approach. It will be work that you are already able to do, and it will be work that will be very much valued by your client as they will have instigated it, and be willing to pay for. And you will have made them stickier clients.
How we can help you
We are all about helping you achieve the best life-work (not work-life) balance for you. We do what you need to keep you on the right side of the taxman, answer all your questions, and make helpful suggestions. Always recognising that your business is a tool for you, not an end in itself. We help you plan to live your best life for longer. Helping you to enjoy the journey as well as the result, and to be happy. An initial chat won’t cost you anything, so phone on 01202 520010 or email firstname.lastname@example.org