There are plenty of articles on the internet advising accountants on the most common and simple mistakes they should avoid.
They all dispense good advice.
Bill Tsotos writing for Accounting Today’s advice is particularly sage – failure to understand a client and their business and industry is a very bad mistake as is not differentiating yourself sufficiently from your competitors.
Not billing what you’re worth is very prevalent in the industry at the moment but it’s understandable in a marketplace which has been defined by downward price pressure for nearly a decade.
Of Bill’s reasons though, I’d like to focus on “not being proactive” because I have found that’s the biggest problem facing accountants in the UK today.
For the purposes of this article, “proactive” means getting in touch with your clients with actionable and useful information as well as inviting feedback. Email is fine for contacting clients but people buy people first so it’s even better if you can be “proactive” face to face or over the phone.
Lack of proactivity is the main reason behind the downward price pressure in the sector and it explains why a client turning over £1,000,000+ a year would gladly jump into the arms of a competitor to save £50 a year.
What do 68% of accounting clients want?
According to ClearBooks, 68% of clients want an accountant who:
- is in regular touch with them,
- they can get along with easily,
- is down the road from where they are, and
- has a bank of knowledge they can tap.
For only 21% of clients, price was the most important aspect when choosing an accountant.
If this is the case, why is there such pressure on accountants’ prices at the moment?
It’s because there is a fundamental disconnect between what an accountant thinks a client wants and what clients actually want.
Clients want far more from their accountant than accountants believe.
The big picture from the perspective of an accounting client
Your client has both short-term and long-term needs of you but you might be only pricing for the long-term needs at the moment.
A client’s long-term needs generally are to have the reassurance that they won’t miss any HMRC or Companies House deadlines and that they won’t pay any more in personal or corporation tax than they need to.
And the likelihood is that your practice is primarily structured and staffed to adequately meet those long-term needs.
There is probably some additional slack within your practice to represent a client if someone has approached them to buy their business and they need you for the due diligence process but not much more.
There is well-known expression that journalists write the first version of history and, much later on, a historian then summarises the events the journalist was writing about but from a much broader perspective.
You, the accountant, are a client’s historian and you provide historical summaries of events and financial transactions which happened between 9 and 21 months ago in the form of HMRC and Companies House submissions.
However, clients more than ever want reporters on the ground as well as historians to help them understand:
- how their business is doing today and
- how close they are to achieving their personal and professional financial goals within the timeframe they set for themselves.
The pros and cons of bookkeeping packages
In the past, clients were generally satisfied with working with a “historian” because there wasn’t really an alternative.
Since then, the Internet and online accounting and bookkeeping programmes have appeared and they’ve fundamentally changed clients’ expectations.
Whenever an accountant sells his or her practice’s services to a client, they now almost always come with a bundled online bookkeeping programme.
And each existing and new client knows that, once they’ve given you permission to log into their platform, you have the ability to monitor how they’re doing at a time of your choosing.
Nearly every client then convinces themselves that you will be some sort of benevolent, overseeing eye checking in multiple times a day just to make sure that everything is on track.
What the client doesn’t realise though is that, along with their log-in details, you have the log-in details of hundreds of other clients.
What they also don’t know is how long it takes to log in to account after account and how long it takes to run multiple reports to assess the health of each client’s business.
Nor do they appreciate how so few clients using online bookkeeping packages update them regularly or correctly which cumulatively creates a tidal wave of additional work for you and your colleagues.
Online bookkeeping programmes do save accountants time but not nearly enough and, together with accountants having more clients than ever before, there are not enough hours in the day to provide the type of constant oversight that a client wants.
But what if there was?
The importance of immediacy for accounting clients
If there was a way to use online bookkeeping packages to…
- monitor clients’ ongoing financial performance,
- alert you and your staff to when there was a problem or an opportunity, and
- provide you with the guidance you needed on how to help your client make the most of the problem or the opportunity
…you could then start to provide clients with their short-term needs, demonstrate your value to them, and charge them more.
Time after time, it’s what clients tell accountants and pollsters what they want.
According to ClearBooks, clients value communication over every other aspect when they’re deciding which accountant to use. One in five also want an accountant whose personality agrees with theirs.
What do they want from this communication?
They want your help in formulating future strategy for their business (32%) and on budgeting (23%). Only 4% want assistance on tax.
So while an accountant sees their core job as helping clients save money on tax, what clients actually want from you is for you to be a general sounding board and a trouble-shooter – they want to be able to access your experience in helping them make more money or save money.
Welcome to Hindsight
Hindsight is a plug-in app for Xero designed to allow you to offer the services clients actually want and are willing to pay a premium for.
Hindsight logs into each of your client’s Xero accountants every day and monitors each one to provide you and your colleagues with instant information on how well each client’s business is doing and how well they’re using Xero.
As well as providing you and your colleagues with generic flags (signifying a threat or an opportunity) on each client, you can also program in client-specific flags covering 12 distinct areas of financial performance and Xero usage.
Better still, accompanying each flag are instructions for your staff (which you can customise) on how to solve the problem, what it means in both financial and business terms to the client, and what to say to the client to deliver extra value.
So Hindsight constantly monitors clients’ performances, it attributes responsibility for dealing with certain issues and clients to the colleagues you choose, and it trains staff on the consequences of each red flag and how to explain them to your clients.
Hindsight offers on the ground reporting as well as the information you need to file clients’ accounts and submissions to HMRC and Companies House.
To find out more, please schedule a call using the panel below or email us by clicking here.