AdvanceTrack’s webinar on value, earlier this year, was one of its most thought-provoking and interesting.

On the topic of ‘value’, three experts joined AdvanceTrack MD Vipul Sheth to discuss what value means in the context of an accounting practice, its people and clients.

Andrew Van De Beek, founder of Australian accountancy firm Illumin8, kicked off proceedings with an intensely personal and heartfelt presentation. This tone supported his message: work with clients you like, and understand the purpose of their business, before you can deliver value.

Clients are usually sold an expectation of what it will be like to work with another party, and are then disappointed with the reality.

“When I started my firm eight years ago, I’d already worked in a smaller firm and a Big Four firm. I hadn’t really enjoyed what I was doing – ticking boxes. That changed when I realised there were businesses behind my work – it changed my thinking,” he explained.

Van De Beek and his firm undertook soul-searching of who they were as personalities, and who they wanted to work with. “It was a transition from ‘pretending to be an accountant’ to ‘here’s Andrew… who is good at accounting’,” he said.

His official ‘work photo’ was him in a suit and tie. “I asked myself ‘why am I putting this shirt on?’ The branding was this picture while I was really [a guy in a t-shirt drinking whisky],” he said.

“In other words, the branding was the guy in the suit, but when clients interacted with us they got something different.”

“If we’re pretending to be someone else, act a certain way, do things a certain way… it won’t hit the mark,” Van De Beek added. Accountants often present themselves in a similar way, providing similar services in the same style – “it just won’t hit the mark”.

 

 

Karen Reyburn, founder of accountancy marketing agency PF, carried on the thread. She said accountants feared being themselves, but making such a move towards fully representing yourself in your work normally required “small changes over time”.

However, such a move was important in terms of winning and working with clients. “Your brand is not for you, it’s for clients,” she said. “They will ask, ‘is this real? Are these people for real?’.”

When there’s a mismatch “they will hesitate to work for you”, Reyburn added.

The step towards online communication precipitated by the coronavirus pandemic has seen accountants behave more as they are, particularly where they talk to clients from their home environment.

“I hope that those moving through this see one of the big lessons that ‘me and my firm need to be who we are and show it’,” said Reyburn.

 

Building that authenticity is an aspect of setting out how to understand what value is in terms of clients, said James Ashford.

“Accountants do amazing [technical] things: balance sheets and P&Ls, but I only care about what’s going on in my life. I want to be able to pick my kids up from school and my wife be safe, along with a storm-proof business. That’s where accountants can have an impact,” said Ashford.

On pricing, Ashford said you should be “consistent and profitable in what you need
to deliver”.

“And compliance isn’t dead,” he added. “It’s our most profitable work [at the accountancy practice where he is a director] because of how we charge it, manage our efficiencies and deliver.”

View the webinar by clicking here.

In the April, we spoke to practices about their approach to managing clients and their practice in lockdown. We revisited them after two months to find out what happened and how they see the next few months shaping up.

Bruce Burrowes, founder, Kingston Burrowes

How have the past two months been since lockdown began? Have things panned out for your firm as predicted?

I think we basically got it right. A great deal of effort has gone into talking to our clients, maintaining communication, talking about the changes, the funding available and supporting clients. We’ve had two clients cease trading but they voluntarily shut their business down – otherwise everyone else is still on board.

Big changes were made to how our people worked. It has been a bit more settled but now it’s about getting back to work, the ‘new normal’.

We now have three offices rather than four – but that was part of a long-term plan to better manage our operations – and included moving into a new, bigger site in Cheam. The plan was for this to be live just before Easter, which got delayed to the end of May – not because of the build but just because the desk manufacturer closed.

 

What is now on the agenda moving forward?

Well, now it’s about getting clients back into the flow of managing regular compliance tasks such as accounts and tax returns.

Our personal tax team has the self-assessment stuff in hand. On companies, it’s about trying to keep ahead of things; VAT, accounts have to come in. If you delay accounts because the information hasn’t come in, you don’t get that time back. So it is being mindful about letting clients know we’re still here and work needs to be done – it’s a similar message for our own team.

The huge thing, though, is getting people back into the offices. That is the same for us and clients. Where they’ve asked us for legal, human resources and health & safety advice, we have contacts we can refer them to.

Our biggest challenge is getting people back in – they must realise that face-to-face is so important, either for day-to-day tasks or managing clients. I’ve realised that even as government guidance relaxes, there has to be a mindset among people that they want to come back to work… if you don’t get that they won’t come back. Clients will have the same problems. Conversely, some people can’t wait to get back in.

 

 Are you able to undertake longer-term planning? How do you see the medium term?

This is normally my planning and budgeting time – so the coronavirus has taken that out a bit. We are involved in helping with funding and have had a few more enquiries on that front – something for me to consider.

From a tech perspective we’re in quite a good position; our investments in IT paid off. The investment allowed staff to be productive at home. We have a good understanding of both the applications we need to run, plus the hardware requirements. It has not been without challenges – such as dealing with ad-hoc IT issues remotely – but we’re on it.

The most immediate client-facing tasks will be around helping sort through and manage their Job Retention Scheme (CJRS) claims.

 

Brendon Howlett, operations director, Wood and Disney

How have the past two months been since lockdown began? Have things panned out for your firm as predicted?

It’s been well beyond the norm. We’ve had to speak to insolvency practitioners and lawyers and be brutally honest with some businesses. It went as good as it could, I guess. We felt as a team that our focus should be purely on client communication: calls, ‘hand-holding’, listening and sometimes just simply being there. We were, in tandem, sifting through the deluge of information from the government and various accounting bodies to understand what options were available. We had daily calls with a good number of our clients, others on a weekly basis.

As practitioners we’ve had to sacrifice our time. I’d justify it as an investment. Clients have been understandably coming to us for help – and we are the people they should come to. It does reach a point where it’s not sustainable as pro-bono; we have to operate as a business, too.

Furloughing helped as there was a lot of work to do and it was more straightforward to bill for while easily demonstrating value.

 

 What is now on the agenda moving forward?

We’ve said to our team that we understand the majority of our clients will be able to continue with a retainer – but that might dry up after that…so use the information we have on them, plus the extra communication, as an opportunity to understand what’s going on. Opportunities will come from helping clients move on and grow. We also know they’ll talk about us to other people – and we’re picking up some other work where their accountant has either let them down, or they haven’t heard from them.

Early on we did our cashflow budgeting and impact on our firm. We have also looked at our clients and undertaken a ‘z-score’ methodology, looking at their balance sheets and grading them. Then it’s the more serious discussions about ‘where your business is now’ and devising strategies to come through this.

Generally, we’d look at it as almost a given that clients we’re working with will want to grow. Some will struggle – it won’t necessarily be ‘the end’ for them but we need to do something about it and do it quickly. This coronavirus has sharpened the focus on tracking survivability.

 

Are you able to undertake longer-term planning? How do you see the medium term?

It’s going to be a tough few years. We’re quite a lean team at the moment and our focus will be on looking after existing clients and attracting new ones. Communication will be crucial and will remain at a high level.

We won’t focus solely on compliance services – there has to be more advisory work. We also want to grow our practice, so will need to keep the sales funnel working. We would like to think referrals will keep on coming but you can’t guarantee that or predict.

We have been able to build emotional connections with our clients… now’s the time to strengthen those connections through stepping up our digital marketing.

 

Alastair Barlow, founding partner, flinder

 How have the past two months been since lockdown began? Have things panned out for your firm as predicted?

Uncertainty was at the fore. We had no idea how our clients were going to draw back from us, or react with their employees. We were expanding and had just taken on two new team members, so we on-boarded them during the lockdown. With expansion in mind, the team knew we were unlikely to furlough anyone ourselves; it would be more a case of not hiring anyone else for the time being.

While our use of tech is high, we realised it would be stressful working from home for a prolonged period, so we tried to make it as comfortable and health-focused as possible – such as using a proper work chair rather one in the dining room.

As we’re London-based, we made a decision pre-lockdown to go fully working from home. If team members got ill travelling in and shared it with everyone else, it would have been disastrous. I think the move was pretty much seamless – MacBooks at home and phones as well – internet-enabled comms channels are already fully used. It has, however, been far more prolonged than we hoped for.

As such, some WFH situations can’t really continue – so we’re looking at co-working spaces nearer the teams’ home where possible.

From a mental health and wellbeing perspective we run ‘self reflections’ on a Friday. Our people opening up about what’s on their mind and how they feel. We also hold weekly Pulse surveys with questions, which help us gauge an overall sense of where we’re at.

From a client perspective we ranked them according to a number of metrics, including cash, exposure to sectors or supply chain and so on. We spoke to them all but with an understanding of their overall risk exposure. It took several weeks for things to unfold and understand the general direction they were heading in.

Our pricing model is flexible and based on consumption… if it increases we will increase fees – if things change adversely or are on pause then we’ll strip back where required. Of course, if we’re strategically advising a client on cash management, then we’d say that cutting our fees would be a false economy.

 

What is now on the agenda moving forward?

 Things are mostly settled with loans in place – we’ll see a greater than average fall of businesses in the overall economy due to repayment issues in the medium-term. Many of our clients are equity-backed, and we think there will still be enough investment around.

One thing we’ve seen slow down is the volume of clients changing accountants to come to us. We’ve picked up a couple of big clients but in a period of uncertainty many will keep as many certain things in place as possible.

We’re seeing more businesses unfurlough, and expect that to increase from the middle of June.

I don’t think rushing people back into the office is our thing – in fact, our lease was ending and we decided against its extension. Our people say they want roughly a 50/50 time split between WFH and being in the office. So we may look at leasing where we can take a bigger room if we have everyone in on a Monday, for example. We won’t do a big bang – we don’t need to take the risk.

We are all, however, missing human contact and interaction. While we leverage tech, we really try and send people out to be embedded with clients; whether it’s on their advisory committees or attending board meetings. Such rich, strategic, interactions are difficult to replicate.

 

Are you able to undertake longer-term planning? How do you see the medium term?

In terms of our service solutions, which revolve around client-centric problem solving, one thing that may be on the agenda is more governance and risk management offerings. It has surfaced a little bit more in the eyes of clients – and some of our team can already deliver it.

Generally, this situation has brought to the fore the concept of advice: what clients really value is speaking to accountants rather than receiving a set of accounts.

AdvanceTrack has teamed up with business advisory platform Clarity to offer clients a way to understand and improve their business

We have exciting news of a new partnership, bringing together AdvanceTrack’s outsourcing capability with support to build and deliver a top-level advisory service. Clarity has partnered with us to provide an exclusive offer for AdvanceTrack’s clients.

Clarity is a business advisory platform harnessing AI, machine learning and blockchain, which uses the right combination of people, process and tech to transform the business advisory services of accounting firms worldwide.

Clarity’s offering helps practices support clients in understanding their numbers – and how to improve them. Accountants can help them create a step-by-step plan to build a better business and, through a structured online data room, help access the cash and investment to grow or exit. The Clarity platform empowers 100% of accounting teams to help 100% of their small business clients with business advisory.

Its founder and CEO is Aynsley Damery – a qualified accountant and former CEO of a multi-award winning niche advisory accounting firm for entrepreneurs in the UK.

 

“Our world is now so connected – both people and devices, and the ability to reach customers is no longer restricted by borders,” said Aynsley. “The move to the cloud and the ability to analyse big data opens up incredible opportunities for many accounting firms. Harnessing the power of technology effectively has become critical to gain competitive advantage.”

 

 

 

 

AdvanceTrack founder and MD Vipul Sheth said that, by outsourcing, accountants should be freed to drive client value. “We want practices to break free from spending all their time on compliance work that can be managed and processed in a better way,” he said.

“And by freeing them from these bonds, they can make much better use of their time understanding and advising their clients on growth, or their longer-term aims.”

Get in touch with #TeamClarity on info@clarity-hq.com to find out how you can benefit from our partner programme, plus an advanced implementation plan to get your firm on track.

take time make time

Being able to fight clients’ fires, or support their growth plans, are key steps in increasing your practice’s value to them. We cover how you can build this capacity within your accounting firm

The most successful accounting practices are those that have the capacity to either react, or be proactive, with clients. Ultimately this enables a firm to deliver a higher level of client service. If AdvanceTrack looked at our top clients, they have some 15% of spare capacity to deal with issues or broach things with their client.

But how do you achieve this? Well, first you have to take a step back and consider how your firm currently works and your attitude to technology.

 

Practice drivers and technological advancement

There are a range of drivers of change in an accounting practice, and these will vary in value dependent on the varying challenges it faces. However, there are key areas of which one or more will be on your radar most times. These are:

  • Number of staff/utilisation
  • Timing of service delivery
  • Use of offshoring/outsourcing in the practice
  • The pricing model used (fixed or variable)
  • How work is delivered to your clients
  • Frequency of invoicing

All these drivers can be impacted by the adoption of technology. But firms adopt technology at different rates, even in different parts of a single practice. Martec’s Law sets out pace of technological development versus change in an organisation. Most organisations are held back by the speed at which the technology is introduced into the business, and later have to ‘reset’ – in other words, effectively to start again. This ‘reset’ might mean reorganising a department or function – for some practices it might mean their natural end.

Consider within your own practice how quickly some teams or individuals have adopted change or new processes and technology. A prime example is a client using cloud accounting such as Xero, but the year-end process is an annual one that is completed months after the financial year end. If that feels like how your firm engages with clients, then neither party is benefitting from the technology improvements that software companies are introducing.

So, what are firms – namely you – going to do to respond? There are varying approaches, but it’s probably best to adopt and utilise the technology that will have the biggest, most positive, impact on the practice.

 

Help your teams, or the practice as a whole, build capacity

Press the reset button intermittently across the organisation. Consider where there is a wholesale change in the systems and/or process as a way of speeding up change.

The image (on page 3) shows the typical difference in perception of cost/value between an accounting practice and the client. Accounts processing and ‘being compliant’ for audit are allocated a lot of value by the firm, but the client attaches little or no value to them. The most valuable part of the service from the clients’ perspective is your meetings with them, and implementation of advisory services – plus the follow-up meeting.

So, if the compliance part of the business is perceived to have the least value, shouldn’t this be delivered at the lowest cost and in the fastest possible time?

As the MD of an offshoring/outsourcing business, I’d put the case that all firms need to look at the capacity required to not only deliver the service, but leverage any change to grow the firm. Our most successful accounting clients have ‘spare capacity’, which they achieve through a mixture of technology and strategic use of our outsourcing/offshoring solutions.

The question you should ask yourself, then, is: “How much capacity can I free up?”

 

Calculate your capacity plan

Using a ‘top-down’ approach, consider:

  • Predicted client billings
  • Write off allowances (plan should be zero)
  • Special work

Using a ‘bottom-up’ approach, consider:

  • Available hours of staff
  • Expected productivity of staff
  • Budgeted rates of staff

Any difference will be a surplus, or shortfall, of capacity.

 

Improving processes will increase the capacity of your firm

There are a number of tasks that need to take place to improve your processes, which will in turn help you build capacity.

First, you must identify your internal ‘champion’ to lead the process change, who must build a framework for change. Identify key leaders and their role in the review of this process, ensuring that non-compliance with the process won’t be tolerated.

Then you can build detail around the new process, once compliance has been signed off and key leaders have agreed on the changes. You’ll never make everyone happy, so consider the majority view. Also consider key risks and impact on clients.

 

Building an efficient team

Next you must make sure your team is fit for purpose. Training is the key to this, and this is done by building a training culture. The main areas to consider are:

  • Process training
  • IT training
  • Personal skills training (e.g. negotiation or presentation)
  • Product training (e.g. Xero, etc)
  • Share your training plan with a wider group (internal/external stakeholders)

 

Delegation skills

Build a delegation plan. Consider the skills needs in your business and ensure the team have the training to do the job. They must focus on solutions and ensure you hire and keep the best talent.

By having the right team balance with appropriate skills and experience you minimise rework, minimise errors and write-offs, particularly if work is otherwise delivered by senior managers and partners. Finally, if senior staff are freed up, they can be more client-facing, delivering more to the clients and bringing in new business.

Based on your client behaviour, it’s then key to try and smooth your workflow over the year. How do you do this? Well, build faster turnaround times within your production teams. AdvanceTrack has been building this for firms using their offshore outsourcing capabilities. And then ensure that there’s free capacity across the year, not just certain months, allowing the firm to grow and deliver based on client demands.

 

What are you measuring within the firm?

I know from personal experience when working in larger firms that KPIs are given to staff they have little or no control of. As a result, if you measure them against these, it is demoralising as seen as unfair. So, ensure you measure people on things they have the power to manage. You must also give honest and regular feedback.

Team members should be encouraged to advise management if job budgets can’t be met. An earlier conversation may reduce the write-off through open conversation with the client and team. Finally, ensure each team member has a job budget and delivery deadline.

Bear in mind that feedback from staff and clients will be critical. Review successes and make improvements where necessary. Can you recommend any advice to the clients based on the information your team has reviewed? Consider if that advice is billable, and whether a fee discussion is required.

If a client has poor bookkeeping or other issues, these must be communicated. If these are not communicated, they believe they provide good books. Firms across the industry are guilty of correcting the errors without communicating this to the client.

Make the client accountable for their actions around timeliness, accuracy of information provided, query resolution and payment terms. Consider the purpose of an engagement letter and ensure it focuses on the client relationship and not legals, which can be dealt with separately.

 

Clients

You’ve built your capacity plan. You’ve trained your teams and most importantly, you’ve adopted technology and have a plan to take the most benefit from this, so you are closer to the technology line in your improvement process.

You then consider how outsourcing/offshoring can help deliver more. Like all things, you need to consider the people in your business and ensure that they buy into the vision you paint of the firm and this will be driven by the type of person and possibly age profile of the team members.

 

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