Have you ever asked your clients to describe their ideal accountant? Can you imagine what their response might be? It shouldn’t be too hard to come up with a rough guess of what they’d say. Now ask yourself, are the services you offer close to that ideal?
If the answer is yes then congratulations, I’m sure you’re in high demand and rolling in hay. If the answer is no or you’re not sure, perhaps you should imagine what kind of assistance an accountant could give you in running your own practice. I’d guess that compliance is not at the top of the list.
One of the best aspects of running a small business is working with experts you could never afford to hire as staff. I’ve contracted an AdWords expert who actually worked for Google’s AdWords department to market my events. My best consulting engagement was with a highly successful publisher who spent a day picking apart my news website to show how it could be improved. A top-notch design team I found through personal contacts crafted a striking, inspiring logo for BoxFreeIT’s upcoming name-change next week (sorry, couldn’t resist getting in a plug!).
All three experiences had something in common – great advice.
I was very happy to pay for expertise at rates that reflected their value because they genuinely helped my business grow. Accountants have always offered expertise but it is often valued very differently. Clients pay for expertise in compliance only grudgingly because it has no impact on helping their business grow. Compliance doesn’t generate sales, it doesn’t reduce operating costs, and it doesn’t increase efficiency or productivity. Yes, there may be savings in tax paid but for the most part it’s dead money.
Now accountants must be sick of hearing know-it-all’s tell them that the future is in advisory work. Consultants have been saying this for years. However, two epic shifts in the world of business are redefining the expectations of SMEs and the capabilities of accountants. These trends are driving an urgent need for better advisory services.
1. The Information Hunger Games
One of my favourite marketing lines by a Victorian accountant is “numbers are life”. It’s never been truer in business or in our personal lives. Just take a look at social networks as they shifted online. We can’t post a picture of a panda without hungering for performance metrics.
How many likes did it get? How many comments? Which of my friends commented? How many positive comments versus negative?
Businesses are looking for the same feedback for their own actions. Not just in social media but in everything they do – every sales campaign, new service or extra hire. Did it make a difference? Did my revenue improve or decline? Should I do it again or try something else?
They are hungry for experts who can interpret the data they generate and turn it into a plan for them to follow to greater success.
2. Low Friction Contact
The rise of cloud accounting software has killed some odious bugbears in the accountant-business owner relationship, chief among these is the time wasted in opening and updating desktop software files. An accounting firm which had recently moved clients to the cloud said they had cut admin time by 25 percent because they no longer needed to ask for passwords, transport the data file between the accountant’s office and the SME, manage multiple versions of desktop accounting software, or update journals in the client’s program.
The reduced friction in basic maintenance of accounts has opened up the remarkable possibility of a full monthly close-off from an accounting perspective just days after the end of month. Match that with the ability for an accountant to view the same set of accounts as the client from anywhere in the world. Those are the kinds of changes that can reshape industries.
The two trends together make a perfect storm. SMEs are starving for expertise to turn business data into strategy. Accountants suddenly have the ability to give SMEs a complete financial picture of their business almost in real time, and discuss those numbers with them over the phone.
Some canny firms have begun offering “virtual CFO” services which consist of monthly or quarterly meetings where accountants manage the performance of their SME clients by setting and measuring KPIs. Cloud accounting software, powered by bank feeds, contains accurate and up-to-date information essential to monitoring those KPIs.
Some of you may think it’s a stretch to label this “virtual CFO”. After all, many accountants have no commercial expertise other than running their own practice. Fair enough, the distinction is real and valid. But from the perspective of a small business owner, a virtual CFO is an aspirational marketing term that perfectly summarises the mix of skills they want but can’t afford to hire full time.
How many of your clients can afford to hire a full-time CFO? How many would settle for a regular monthly call to discuss the numbers that matter most to their business? No doubt there’s a learning curve for some accountants in picking up the mantle of virtual CFO. But there is a huge demand from SMEs for exactly this, and a massive incentive with the decline in hourly rates for compliance.
Don’t take my word for it. Ask your clients. Just be prepared to rethink your business if their idea of an ideal accountant is different to you.
Hear Reckon, Intuit, Deloitte and the Institute of Public Accountants at BoxFreeIT’s The Future Series: Virtual CFO next Wednesday 30 July. Broadcast live in HD nationally. Tickets are limited; buy yours today.