A challenge for accounting firms everywhere!

A few weeks ago I was presenting to a group of 30+ partners from accounting firms from regional NSW & VIC. The group was a cross-section of age, gender, experience and market outlook. However, the common thread among the partners is an overwhelming concern about “selling themselves” This of course is nothing new. Be it accounting firms at the big end of town in the cities or at the small end of town in urban suburbs or in regional centres in Australia & beyond most accountants (and indeed professionals in law, engineering, management consulting and the like) seem to not like to sell.

With the above in mind, I gave an interesting challenge to one of the accounting firms who attended the presentation.

I asked the managing partner of this particular firm the following questions:

How many staff (professional & support)  are in your firm? The answer: around 40.

Do the staff know people in the community? Answer: Yes

Would your staff know at least 3 people who either own or are employed by businesses in the local area? Answer: Yes

So this managing partner has given all his staff the challenge over a period of two weeks to do the following:

Name of the person the staff member knows

The name of the business/organisation they own or are employed with

The accounting firm’s connection to the person (i.e. family member, friend, went to school/uni with, sports service club etc …)

So within 2 weeks the managing partner will have 120 names of people that he didn’t know before. Now of course there will be overlap and some doubling up of names across the firm. So let’s assume the degree of duplication is 50%. That means there are potentially 60 names of people in businesses that the firm “knows” and has some connection with. Now you’re probably thinking “so what – some of that list will already be clients of the firm since the firm in question is the biggest one in town” Fair enough. So let’s slice off another 50% of the names so now we are left with 30 names that represent “green fields.”

Two important things come out of this challenge.

1. Potential clients that are “known” to the firm.

2. The firm having a much better understanding of their connections in & around the community. For a regional firm to have this knowledge (and to act on it) is pure gold.

Down the track I’ll share with you Phase 2 of the challenge – that is once you get the 30 names what do you then do?

See you next post.

James E.

 

Are you an accountant who can sell?

It might sound harsh but most accountants that I meet are no good at selling themselves or the services they/their firm provides. Its not because they aren’t intelligent or capable – far from it. Why is this the case?

I think there are two reasons accountants aren’t proficient at selling. Firstly, they aren’t trained specifically in the areas of business development & selling. Secondly, a lot of accountants believe it is beneath them. How sad!

Earlier this week I was in a meeting with the MD of a small to medium business (annual revenue around $12m) and he specifically told me that he believes that not only accountants, but all professional services people & firms, aren’t really any good at looking beyond their immediate assignment/project. Or put another way they don’t tell clients and potential clients what else they can do for them, that is sell.

A few weeks ago a good friend of mine told me about a simple sales methodology called the Gaddie Pitch. I’m not going to pretend that I can do justice to the Gaddie Pitch by trying to summarise it. So read it for yourself at the Anthill magazine link below. I’ve been using this technique now for the last week or so and it is great and most importantly … works if you let it 🙂

http://anthillonline.com/gaddie-pitch-training-centre/

See you next post.

James E

What do Financial Planning Clients Really Want?

Well after a long 8 months of researching, interviewing, writing, editing, emails & phone calls the “What do Financial Planning Clients Really Want?” book is officially released today. Yeaaahhh!

With the recent global financial crisis, the professional financial planning market within Australia has changed significantly. With the market becoming more regulated and competitive than ever, clients expect more from their advisers to not only guide them through the complexity of investment and risk products but to help protect and grow their financial wealth through quality and professional advice. Never before have financial planners been in a position to make a real and lasting difference for their existing and prospective clients.

What do Financial Planning Clients really want? gives advisers the necessary insights to better understand the mindset, motivations and expectations of people who have never used, used once or have an ongoing relationship with a financial planner.

Through a series of 20 interviews I asked questions like:

What do you think a financial planner does?

Was your financial planner experience different to what you were expecting?

When it comes to choosing a financial planner, are age and/or gender important?

If you were to use a financial planner, what are the things you would look for?

The interviews were conducted with real people from all around Australia. Their names were changed to protect their identity, but they gave me their frank and open thoughts on financial planners and the industry.

The survival of financial planning firms will lie in the ability of their advisers to initiate and build long-term relationships with their clients. It is the professionalism and strength of these relationships that translates to the competitive advantage gained for the firm and its long-term business prospects.

See you next post.

James E

A question all accounting partners should ask themselves

Had an interesting experience the other day. I was presenting to a group of partners & principals about the importance of understanding the mindset of their clients and prospective clients. The presentation went well with lots of good interaction and wars stories shared.

After the seminar I was chatting with one of the attendees and he shared the following frustration with me.

James – 95% of what you shared today was spot on. It was good, solid and compelling stuff. The problem that I have, as the head of my firm, is that we hear what is said today, agree that we have to change the way we do things, get all excited and then go back to our office and fall into the familiar cycle of doing what we do the same old way and not changing. What do I have to do to break this cycle?

You might be reading this and thinking the same thing.

I put a few questions to this head of firm about the personality make up of his partners & staff and their attitude to trying new things and their willingness to step outside their comfort zone. As I expected he told me that there is a real mix – some have the “right attitude” and some are willing to leave their comfort zone. I would like to think that the some that the managing partner was referring to equated to more than half of his partners and staff.

At this point I usually ask the following question, “What proportion of your partners would respond well to the following challenge?”

The challenge: Come 1 July next year – all of your client relationships will be given to other partners within the firm. You will have a blank sheet to start building a client list from scratch.

In the above situation of the managing partner he answered that 2 of his 8 partners would be up to that challenge – himself and one other. So 25%. Hmmm – is that sufficient? I honestly don’t know.

The ironic thing about it is, from a client perspective they want the accounting profession to be more proactive. The above challenge is not a bad start!

See you next post.

James E

 

Are you an accountant that is worth more than $5 per hour?

Following on from the last post I now share the 2nd theme which is contributing to the inevitably of compliance services not dying, but certainly being eked away bit by bit. The surge in the use of outsourced services as indicated by the popularity of sites such as odesk, elance & freelancer. These sites have a created a global market for anyone to buy services ranging from bookkeeping up to network administration.

A quick scan through the elance.com site shows that there are over 1.8million individuals who provide services on an hour by hour basis with costs ranging from as little as $5 per hour. what is even more interesting is the range of skills. Here is a list of skills & disciplines in just 3 areas pertinent to this accounting blog. The numbers in brackets refer to the number of contractors on the elance site that offer the service.

Finance Professionals
Accounting (13,494)
Accounts Payable (4,563)
Accounts Receivable (4,699)
Analytics (3,560)
Bookkeeping (6,303)
Budgeting & Forecasting (3,598)
Business Analysis (5,493)
Business Mathematics (1,206)
Business Plans (5,826)
Corporate Strategy (1,893)
Data Interpretation (989)
Data Sufficiency (197)
Financial Analysis (6,102)
Financial Forecasting (3,517)
Financial Management (11,258)
Financial Reporting (6,059)
Financial Statements (4,668)
Human Resources (2,281)
Inventory Management (1,522)
Investment Research (932)
Job Costing (728)
Lacerte (45)
MYOB (357)
Management (21,831)
Negotiation (1,589)
Operations Management (4,238)
Organizational Behavior (624)
Payroll (3,230)
Peachtree (986)
Project Management (6,358)
QuickBooks (2,951)
Quicken (205)
Six Sigma (330)
Statistics (1,078)
Strategic Planning (1,599)
TQM (23)
Tax Preparation (2,067)

 

Consultants
Accounting (13,494)
Accounts Payable (4,563)
Accounts Receivable (4,699)
Analytics (3,560)
Bookkeeping (6,303)
Budgeting & Forecasting (3,598)
Business Analysis (5,493)
Business Mathematics (1,206)
Business Plans (5,826)
Corporate Strategy (1,893)
Data Interpretation (989)
Data Sufficiency (197)
Financial Analysis (6,102)
Financial Forecasting (3,517)
Financial Management (11,258)
Financial Reporting (6,059)
Financial Statements (4,668)
Human Resources (2,281)
Inventory Management (1,522)
Investment Research (932)
Job Costing (728)
Lacerte (45)
MYOB (357)
Management (21,831)
Negotiation (1,589)
Operations Management (4,238)
Organizational Behavior (624)
Payroll (3,230)
Peachtree (986)
Project Management (6,358)
QuickBooks (2,951)
Quicken (205)
Six Sigma (330)
Statistics (1,078)
Strategic Planning (1,599)
TQM (23)
Tax Preparation (2,067)

What more can one say? The above is only one such site. I know what you’rte thinking. What’s the use of having people in India, Sri Lanka and similar places doing your accounts? If you can’t see the use to a business person needing a compliance servoce done then that in itself concerns me 🙁   See you next post.

All my best,

James E.

Should Accountants be using the “Cloud”?

In my last post I mentioned two big, big driver that make the “cloud” something that accountants and their firms need to embrace for the reasons of cost, convenience and speed.

Here is an extract from an article titled  “Aussie companies lead the way with cloud computing” written by Michelle Hammond which appeared last year on the startupsmart.com.au website. Although it is over a year old it raises some excellent points. It’s a good read 🙂

Australia is leading the way in the adoption of cloud computing in the Asia Pacific region, but companies continue to be cautious about the workload of moving to the cloud, according to a new report.

Business research and consulting firm Frost & Sullivan recently released a report, titled State of Cloud Computing in Australia: 2011, as part of its cloud computing research program.

According to the report, 43% of Australian companies now use cloud computing in some form, while 41% of IT decision-makers say cloud computing will be a top priority in the current fiscal year.

The figures confirm the findings of another survey by technology giant IBM, which reveals 60% of chief information officers in Australia and New Zealand plan to implement cloud computing over the next five years, compared to 39% two years ago.

According to Frost & Sullivan, companies value cloud computing due to the reductions to capital and operational expenditure, cost savings, increased business agility, and the ability to deliver IT on demand.

Their report also provides a breakdown of the main cloud computing deployment models:

Public clouds are typically offered via a web application or as web services over the internet, and involve applications such as customer relationship management, messaging, conferencing, payroll and office productivity.

Private clouds are owned by the user company and/or a service provider deployed inside a corporate firewall.

Hybrid clouds involve a combination of public and private cloud services.

According to the survey, hybrid cloud deployments are the most popular model in Australia, adopted by 22% of companies, compared to 18% of companies using public clouds.

Not a lot to add here. If the cloud is good enough for so many of the above businesses then why not accounting firms? Go the cloud!

An announcement

Hi everyone,

Life is getting way too busy over the last few months so I’ve come to a decision. Rather than blogging 3 times a week I’m going to reduce it to twice a week. I’m doing this for a couple of reasons. Firstly, I’d rather do less and increase the quality. Secondly, you may have noticed that over the last several weeks I’ve been missing a post here and there. I’d much rather say that I’m going to do less (i.e. twice a week) and stick to that rather than say I’m going to do more and not be consistent! I hope you understand 🙂

So from today I’ll be posting – every Monday & Thursday (Australian time).

In my last post I mentioned that I wanted to unpack the two big trends which make the whole compliance market not what it used to be. These trends are:

  1. The acceptance of the “cloud” by many businesses including government departments and the big end of town.
  2. The surge in the use of outsourced services as indicated by the popularity of sites such as odesk, elance & freelancer. These sites have a created a global market for anyone to buy services ranging from bookkeeping up to network administration.
To do the above justice – I’ll start unpacking these over the next two posts.
All my best,
James E