By Colin Dunn, Co-Founder and CIO, PANALITIX
Technology has enabled accountants to benefit from significant time savings in the core work they do for their clients. When adopting leading the latest systems (in particularly, cloud-based systems which make collaboration on a single source of truth much easier with clients), major efficiencies can be gained. But is there a problem here?
There are risks associated with driving time on jobs down and in my work with accountants, I regularly find myself admonishing them to be aware of the potential pitfalls.
The majority of partners in accounting firms accept that to remain relevant to their clients, they must move into business advisory services. It’s not a new message. But I have long been fascinated by way the delivery of such services in the majority of firms remains at a very low proportion of firm revenue, and more often than not at the request of the client, rather than as a result of the accountant proactively reaching out to explore what their clients need.
Too often I hear the excuse that ‘my team members are not capable of doing business advisory work’ as a reason for partners not visiting clients and undertaking sales visits. And yet many of the partners uttering this excuse have qualified accountants on their team. I refuse to believe that qualified CAs or CPAs are incapable of being involved in delivering business improvement related services (e.g. cash flows, budgets, KPI monitoring, revenue and profitability analysis, testing and measuring new ideas with a client, what-if analysis and scenario planning etc.) My evidence is based upon the fact that I have done this myself as a senior accountant and manager in an accounting firm and I know of many others who have done the same.
Here’s my diagnosis - and hence the title of the article.
In the goal for maximum efficiency, I believe many firms have become lazy. Slash the hours to the minimum required to do the job with the necessary quality control. Here are some likely outcomes:
- Your accountants do not have time to even think about the client’s business
- They are unlikely to ask the client any probing questions to uncover unmet needs for fear of blowing the budget
- Client service drops
- Client needs remain unmet
- Accountants do not develop the necessary commercial acumen to step up and become involved in higher value work, should it arise
Please understand that this is very much a worst case scenario but I plant the seeds of it here to stimulate thought as to how you can implement simple systems to nip this scenario in the bud. If you are a partner in an accounting firm feeling these frustrations, all you need to do is add two simple steps to your workflow management (only do this for those business clients where you see further potential; with the low value, churn-‘em- through type client, keep doing what you are currently doing):
- Insist upon a three year analytical review of the client before a partner will accept the file and before the end of job meeting with the client. Those of us who trained as auditors had to do this as a matter of course. It made accountants talk to clients and get at the very least a first cut analysis of why, for example, gross margin had fallen by 3% or why sales had increased by 28%. Use technology such as PANALITIX’s Business Performance Review to crunch the numbers and then have your accountant prepare some short commentary to explain them (but they must ask the client why they believe the movements have occurred)
- Take the accountant to the end of job meeting with the client and have them observe as you take the client through the numbers and ask deeper questions. Then, as your accountants become more accomplished and more commercially aware, based on their experience of observing you, let them run meetings with smaller clients. Chip in, help them out, but let them develop their own style
Will all of your accountants step up when provided with this sort of opportunity? Probably not, but some will – and they are the ones whom you involve in business advisory work. But one thing we know for sure is that if you keep your accountants in the back room grinding out accounts and tax returns with no room in their time budgets to do anything beyond the bare minimum, their skills will never increase and they will either stagnate or they will move on.
PANALITIX is running a global roadshow called Firm of Now. The Australasian leg starts on 18th July and we’ll be visiting Melbourne, Perth, Sydney, Auckland, Brisbane and Adelaide. One of the core tenets of the Firm of Now that will be covered on the day is how accountants can become efficiency centric. If you found this article useful, be sure to sign up for a full day immersion at this high powered event. You can do that at www.firmofnow.com.
Colin is a Chartered Accountant who, having spent almost ten years with one of the fastest growing and most innovative firms in the UK, has spent the last 19 years working exclusively with the Accounting profession with a focus on helping them implement business advisory services with their clients. Colin is the brains behind PANALITIX, TRUST and Proactive Success System, PANALITIX’s three cloud applications for Accountants.