Accounting Firms – are all created equal? (part 1 of 3)

In my travels in and around the professional services market I’m often asked … “Are accounting firms pretty much the same?” My short (and long answer) is a definite no.

As both a client myself, and speaking to many, many other clients of accounting firms all around Australia the way that accounting firms engage, serve and build relationships in their respective markets can be very different.

Different is fine. Human beings are different so it follows that the way accounting firms operate is also different. However, great accounting firms share some common elements. In the next 3 posts I’ll be sharing the top 3 elements, to my mind, of great accounting firms. They aren’t in any order of importance or significance.

1. Its all about people
Great accounting firms promote their people, not necessarily their brand. Leaving the Big 4 firms to one side and the valuable role they play in thought leadership for the profession (not just in Australia but globally), people buy from people. People don’t per se buy from brands. Brands, to a large extent, are treated as a hygiene factor by clients since they represent a certain level & standard of risk management, corporate governance, methodology and investment in the training and development of their partners & staff.

People buy from people. If I’m in the market to buy accounting services I don’t go into the main street of a city CBD, stand in front of a tall building and shout out, “Mr KPMG, I would like some advice on best practice in debt collection techniques please” That would just be silly (although quite amusing). Rather, I would seek out someone, via reputation or referral, who was an expert in the area and who I believed, after meeting with them, could help me. Depending upon my circumstances (if say I was CFO of a top 100 listed company I would probably need to use a Big 4 firm to keep the board, banks and shareholders happy), it would be secondary about which firm the expert was with. Brand would not be the most important thing to me. Most CFO’s I speak with believe and practice the same thing.

Great firms foster and support their people. Great firms provide the environment and appropriate support so their partners and staff can serve and build deeper and more intimate relationships with their clients. Great firms are more interested in sustainable relationships over the long term rather than short-term monetary gains.

Make sure to tune into the next post for part 2 in the “created equal” mini-series.

Bye for now,

James E

Accountants – more than a tax refund

Lets face facts. Like it or not there are some accounting clients that want nothing more from their accountant than help to get a decent tax refund from the ATO!

Thankfully, I’ve heard many stories throughout the years of business clients telling me about outstanding experiences with accountants/advisors. In the case of accountants, the common thread of these experiences seems to be the tendency of the accountant to more often than not leave something on the table. This means that the accountant always does that little bit extra and goes the additional mile when providing a service. It might be some extra service you don’t charge for or some market news you heard that your client may not be aware of.

A good example of that little bit extra is a partner friend of mine travelling to the store opening of one his clients at his own expense. He wasn’t invited or expected to be there – he just turned up. The client saw him in the crowd and just smiled. My friend had travelled from Brisbane to Melbourne to go and show his support for the thirty minute launch. A big deal? Perhaps not – but it meant a lot to my friend’s client.

Incidentally, it might interest you to know that this particular client is a member of the Australian BRW 200 rich list (he is worth about $US 400m +) and has used my friend’s services for many years. This client has been so impressed by my friends attitude that he has recently asked my friend (and his staff) to personally mentor and coach his three children (aged in their twenties) in the ways of business, finance and personal wealth management. Not a bad gig.

Simple rule: Leave something on the table = the table will get bigger!

See you next post,

James E

 

Accounting standards should include listening

In earlier posts you would have heard me bang on about the importance of listening when meeting and discussing issues with clients and pitching for new business.

I was scanning the web recently and found an excellent list of barriers to effective listening and strategies to promote better listening.

Barriers to effective listening

There are many reasons as to why individuals fail to listen successfully, These include:

  1. Interrupting
  2. Faking attention and tuning out
  3. Becoming emotional
  4. Jumping to conclusions
  5. Getting distracted
  6. Pre-judging the subject
  7. Wrong focus
  8. Gathering only facts
  9. Inflexibility while listening
  10. Avoiding complicated subjects

Strategies to promote better listening

You can improve your listening skills by following some of the strategies mentioned below: Maintain eye contact with the speaker.

  1. Provide clues that you are actively involved in listening.
  2. Focus on content, not delivery
  3. Avoid emotional involvement
  4. Avoid distractions
  5. Refrain from formulating an immediate response
  6. Ask questions
  7. Use the gap between the rate of speech.
  8. Be willing to accept revisions
  9. Choose the right environment
  10. Stay active by asking questions for yourself

(Source: http://hubpages.com/hub/Importance-of-Listening-Skills-in-Professional-Life)

I remember my dad saying to me years ago … “God gave you two ears and one mouth for a very good reason … make sure you use them in the that ratio” It took me some time to work out that meant you should listen twice as much as you talk! Admittedly I was quite young at the time  🙂

Since then I’ve found out that the original quote was from Socrates –  “We have been given two ears, two eyes, and one tongue. This means that we should hear and see more than we speak.” Socrates (469 BC–399 BC)

So if you really want to stand out to your clients listen to what they are saying. If for example, a client asks you about collecting debt from their clients, by simply listening you can uncover a variety of issues. In this example cash flow would be an issue that you can certainly help your client with!

See you next post.

James E

Accountants in Australia – arise!

A while ago received a message via Facebook from the son of a friend of mine who had seen me driving back home and noticed that one of the brake lights were “out” on my car. What a nice young man!

So being the responsible & mature husband, father and professional (yes you guessed right – my wife doesn’t read my blogs 🙂 ) I called my local mechanic (I’ve known Mike for years) first thing this morning and asked if he could replace the broken brake light bulb sometime today. Being the trooper that he is Mike told me to bring the car down any time that suited me and he would do it right away. What wonderful customer service!

I dropped off the car at Mike’s workshop and told him I’d be back in a couple of hours – he offered to do it there and then but I didn’t think that was fair. A couple of hours later I walked into his office and paid the bill and asked him how business was going. Mike has been in business for more than 20 years and made a most telling statement to me about his accountant in reply to a something I had learned the other day about how the Australian Tax Office treats business credit card purchases which he found useful & interesting.

This is what Mike said:

I really hate that. Why did I have to learn from a customer about how the ATO treats those things and not be told by my own accountant? You know what he’ll say if I raise it with him? Mike – you didn’t ask me about it. How can I ask him about it? I don’t know what I don’t know!

What a most intriguing statement – “I don’t know what I don’t know”

Is it fair for accountants to read the mind of their clients and tell them everything about everything? I’m not sure about this.

There are so many areas in which accountants in Australia have to keep up to date with. They include areas as diverse as:

  • Tax and superannuation
  • Small business concessions
  • ATO rulings
  • CGT
  • FBT
  • GST
  • Payroll tax
  • Stamp duty

The list goes on and on.

From the clients point of view does he/she choose an accountant who is a member of the Institute of Chartered Accountants or what about CPA Australia or perhaps the Institute of Public Accountants? A lot of questions.

See you next post,

James

What is the best way to communicate?

You would have heard the old saying, the medium is the message made famous by Marshall McLuhan the renowned Canadian educationalist and communication expert. Although Marshall coined the phrase almost 40 years ago, in today’s information smorgasbord, it is as relevant as it was back in the 1960’s.

Below is an excerpt from a good friend of mine – Antoni Lee. Antoni advises clients on how to perform at their peak when communicating in public. He is one of Australia’s most in-demand communication trainers for journalists, business leaders, corporate spokespeople, politicians, academics and the arts sector. Suffice to say he knows a thing or two about communication.

Below is an excerpt from Antoni’s site. It is titled “Which Communication Medium is Best?” You can read the full article by visiting http://www.rhetorica.com.au/?p=404

Given the need for accountants/advisers to clearly communicate to their clients and stakeholders, Antoni’s wisdom below will be most useful.

 

Choice confers freedom—or paralysis

An overload of options kills decision-making. At gut level we know, and statistically it’s true, that the more options we have, the lower the chance we’ll choose the ‘right’ answer. A prevalence of opinions and conflicting theories doesn’t help. In communication, it’s rich media versus media naturalness versus social naturalness, etc. How can we know which one is right? Neither do Internet searches provide clarity. Google’s 200m results for ‘Which communication medium is best?’ gave several stupid answers on page one, including three links to psychic hotlines.

Before answering our headline question it will be helpful to ask a few more questions to narrow down the communication context:

  1. Who is your audience?
  2. Why are you communicating?
  3. What is your message?
  4. What is your urgency?
  5. How much money do you have?

Your answers will likely point to some media over others.

Qualifications aside, below is a non-exhaustive, non-academic, discussed-over-coffee, list of strengths and weaknesses in a short list of mediums.

Internet video is best kept short and sharp

  1. Easy to record and upload. Sometimes too easy. See (2).
  2. Weak content and production are obvious.
  3. Easy to find, download and watch, if your audience have broadband connections and can find your content.
  4. File sizes can be a drag.
  5. Requires full audience attention. Most of us don’t watch videos while driving.
  6. Can work for big screens or small. Think before you leap.
  7. Potentially engaging, human, intimate, but too often wooden and inauthentic, in spite of the potential.
  8. Relatively inexpensive to produce, even if you decide to buy cameras and chromakey screens, etc.
  9. Relatively visual. You can creatively incorporate demonstrations, locations, props and other aids.
  10. If loaded to a public site (e.g. YouTube), your video could be on the Internet for a long time.
  11. Linear, chronological. Great for stories and gags and conversations, but offers limited audience selection and control.
  12. Prone to rambles and inefficiency, the hallmarks of natural speech. Proper planning and preparation can alleviate these problems, without harming effectiveness.
  13. The illusion of spontaneity.

Summary: Video is mostly one way, but great for short lists, updates, entertaining and conveying personality.

Podcasts offer portability, repeatability and the opportunity to educate

I have downloaded more than 500 podcasts onto my MacBook Air and iPod—but only listen to a couple of podcasters regularly.

  1. Podcasts are easy to get repeat access and to download.
  2. Portable. Audiences can download podcasts to all kinds of devices, including smart phones, and listen while walking, riding, commuting, gardening, etc. (Hopefully not while performing brain surgery.)
  3. File sizes are usually much smaller than video.
  4. Easy and inexpensive to make.
  5. Unless it’s instrumental, you’re reliant on words and how you say them. There can be a lot in that. Requires a broader communication repertoire than most people have, to pull it off well and consistently.
  6. Prone to rambles and inefficiency.
  7. Linear, chronological.
  8. Searching through is not as efficient as with text, but the fast-forward and rewind tools are getting better all the time.
  9. Great for conversations, interviews.

Summary: Podcasts are also mostly one way, but great for updates, lectures, seminars, lessons, conversations, interviews—and telling stories.

See you next post.

Keep well,

James E

 

The true story of two bananas

I was in a meeting with a top ten accounting firm recently.

The purpose of the meeting was for me to introduce a friend of mine who needed some specialist advice regarding an upcoming transaction.

My friend & I were on one side of the table; two partners on the other side. Lets call them B1 and B2.

B1 was engaging and attentive to my friend and the concerns of his business. He was a good listener and asked the right questions.

B2 seemed to be very interested for the first ten minutes of the meeting and then for some reason “turned off” for the remainder. In the following forty or so minutes he looked at his Blackberry about 10 times and sent at least 3 emails or txts during the meeting. He asked a few questions but gave the impression that he was too important for such a “small” client.

B2 is an absolute expert in his field and commands  high fees for his services. However, in spite of his technical prowess he didn’t get the assignment. I think my friend said it best shortly after we left the meeting… “what a w_ _ _ _ _ !”

What more can I say?

🙂

A checklist worth remembering

In the last post I was sharing with you the importance of getting the small things right when it comes to clients. Here is a checklist you might like to use so you don’t forget. That aren’t in any specific order of importance.

  1. Return all phone calls promptly. Try the same business day. If not the very next morning.
  2. Reply to all emails (depending upon the urgency) within 24 hours. If its really important reply as soon as you can – say 2 to 3 hours.
  3. Phone your client for no specific reason and arrange to have a coffee with no agenda and don’t charge for the time. This shows you are interested in the client and want to invest in the relationship.
  4. Do you know your clients hobbies and interests? If not find out and make a note.
  5. With the above in mind, from time to time send you client a small gift (something to do with their interest/hobby) for no reason. It just shows that you’re thinking of them. Sounds corny but it works if done in a genuine way.
  6. Ask your client the question, “What is the smallest change that I could make that would have the biggest impact on your business?” You might just be surprised at what they say. By the way … before you ask the question tell them that they are not allowed to say lower fees!
  7. Here is a big one. If you say you’re going to do something by a certain day/time then do it. If you can’t than make sure you tell the client ahead of the time the reason why.
  8. If you don’t know the answer to something then tell the client that you don’t know but you know how to find out. Clients want honesty not half-baked responses.

Well there you go – hope the above helps.

See you next post,

James E

Small things count

I had a meeting the other day with a CFO of a manufacturing company. Its a private business with an annual revenue of around $25m and employs about 80 people. Not a huge organisation but still a viable and solid client for any size accounting firm.

The CFO, lets call him John as in John Cleese (one of my favourite actors/comedians), told me that they had changed accounting firms recently. Given the work that I do, I’m always interested in the reasons why clients leave their accountants and use another firm.

When I asked John why the change I expected to hear him say things like lack of the right expertise, constant mistakes and the like. However, he said it was simple – they didn’t return his phone calls or reply to his emails. At first, I thought he was joking, but sadly he wasn’t. John was so angry at the time that he even thought about lodging an official complaint with the Institute of Chartered Accountants. What is even more surprising is that the firm in question wasn’t a 2-3 man shop but rather a CBD-based firm with over 60 staff! Surely it doesn’t take a genius to work out that small things count when it comes to clients.

In the next post I’ll be sharing with you a simple checklist you might like to ask yourself and members of your team every now and then. You might just be reminded of some basic small things that you may have forgotten!

See you next post,

James E

The worst question an accountant can ask (2 of 2)

A couple of chaps presented some interesting findings in a post last week on the Harvard Business Review blog titled “The Worst Questions a Salesperson Can Ask” See below for an extract. For the full piece go to http://blogs.hbr.org/cs/2011/10/the_single_worst_question_a_sa.html

Although the article specifically refers to salespeople, it is important to note that all professionals, including accountants, have to be skilled at “selling” their offering to current clients and prospective clients. Some great lessons can be learned from what these chaps write about.

To understand what makes this question so destructive, we need to first understand where it comes from. For years, most sales training has focused on a single core principle: the shortest path to sales success is a deep understanding of your customers’ needs. If we can understand what’s keeping customers up at night, we can build tight linkages between their problems and our solutions, thereby improving our chances of selling something.

As a result, companies have poured money into teaching their reps to ask better questions. But while it sounds great on paper, this approach suffers from two major problems. First, improving reps’ ability to diagnose needs on the fly proves colossally difficult — especially among average performers. Second, and more to the point, this approach is based on a deeply flawed assumption: customers actually know what they need in the first place.

But what if customers don’t know what they need? What if customers’ single greatest need, ironically, is to figure out exactly what they need? If this were true, the better sales technique might be to tell customers what they need.

In the past we described a type of sales rep we call a Challenger. These gifted, high-performing reps succeed by doing just this, revealing to customers problems — and solutions — that they don’t even see. This isn’t your standard solution-selling approach, focused on open-ended needs diagnosis. A sales conversation with a Challenger provides valuable insight to customers instead of extracting it.

What does this sound like in practice? In our book, we present several case studies, but one of our favorites is from W.W. Grainger, Inc., the distributor of maintenance, repair, and operations (MRO) supplies. In the past, Grainger reps led with facts and figures about their company — how old they are, how many items they stock, how many distribution centers they have, and so on, all leading to the inevitable “So, that’s who we are. Now tell me, what’s keeping you up at night?”

Today, a conversation with a Grainger rep is very different. It focuses almost exclusively on a series of proprietary insights Grainger has developed about its customers that prompt them to think very differently about how to manage their MRO spending — in ways that could potentially save them millions. Rather than trying to convince customers to go with Grainger as their supplier of choice for planned MRO purchasing (which inevitably leads to a price-focused discussion), Grainger reps start by showing them how much money they are likely wasting every year on unplanned purchases, which Grainger’s research shows can be up to 40% of the average company’s MRO spending.

No supplier wants to be in the business of free consulting — and Grainger is no different. The key is to teach in a way that leads customers to your unique benefits as opposed to leading with them. After reframing the way customers think about MRO spending, Grainger reps create an opportunity to talk about a set of capabilities they can offer to better manage that spend, ultimately leading to higher-level sales conversations and bigger deals.

These conversations aren’t happenstance. There’s a specific art to getting them right. We’ve found that insight-led sales conversations like Grainger’s follow a distinct choreography that’s markedly different from your standard sales pitch. Importantly, this isn’t something to leave to your individual reps to figure out. Marketing plays a critical role in identifying these teachable insights and equipping reps with the tools to deliver them to customers.

Done well, this sort of sales approach creates a powerfully differentiated interaction for customers because it leads with insight, not tiresome questions. And, as it turns out, that difference really matters.

In a survey of more than 5,000 business customers, we found that of all of the possible factors that could drive customer loyalty — including brand, product and service quality, and price-to-value ratio — by far the biggest driver is something most companies don’t even think about: the sales experience, accounting for 53% of the overall total.

Customer loyalty, it turns out, is more a function of how you sell than what you sell. Specifically, customers reward suppliers who “offer unique and valuable perspectives on the market” and “educate them on new issues and outcomes.”

See you next post!

James E

The worst question an accountant can ask (1 of 2)

If you’ve been a reader of this blog for any length of time then you’ll know that I have sweated over a book that I’ve been working on for several months titled “What do Accounting Clients Really Want?” which was published by Thomson Reuters back in August.

In the book, in between the chapters of the interviews with accounting firm clients are little vignettes called “a view from the other side” which are the responses of accountants I’ve have met and known over the years. They respond to one of four questions I pose them, one of which is, “What is the best question you have ever asked a client or prospect?”

I asked the above question of three senior accountants, two of which were partners and surprisingly two came up with the same answer: they would ask their client or prospect, “What keeps you awake at night?”

At the time I thought it was a fair enough question to ask since it had been used in sales and business development contexts for many, many years. However, in the last few days I read something that completely changed my mind on the whole subject.

During the last week, I read the blog of well-known and respected management journal that blew my socks off. They claim that the worst possible question a professional could possibly ask of a client or prospective client is I fact “What’s keeping you up at night?”

So who are these people that claim that such a simple question that has been asked countless thousands of times all around the world for the last few decades is not only so completely wrong and but can and will simultaneously prevents sales while also destroying customer loyalty?

Well they must know a thing or two since they were published by no less a journal than the Harvard Business Review. Tune into the next post to find out more!

All my best,

James E