Accountants – don’t judge a book by it’s cover!

Cliche’s are cliches because they are often true. This is certainly the case with the old saying “you can’t judge a book by it’s cover”

Many years ago I knew about a local businessman who over the course of 30+ years had built up a very successful waste management business specialising in sewerage and grease traps. To protect the innocent we will give this chap a code name – lets call him Norm.

Norm, with complete respect, looked every bit the quintessential garbage man. He was in his late fifties, had a pot belly, wore a blue singlet, shorts and work boots. Given the type of work Norm did every day he looked dirty and had a certain aroma around him. Norm didn’t care – he was a successful guy building a business that had made him wealthy. He just didn’t look or smell successful!

One day, Norm, driving through the Sydney CBD in the old beat up Dodge truck he usually drove, stopped outside a Rolls Royce dealership. Somehow he managed to get a parking right in front of the show room so the sales and support staff inside saw exactly what Norm was driving and as he walked through the big glass doors, what he looked like.

Norm walked up to one of the cars on the floor, opened the door and stuck his head in to have a look. He then closed the door, took a couple of  paces towards the front of the car and kicked the drivers-side tyre and called out to the small group of sales people gathered on the other side of the showroom and said, “Hey … how much do you want for this piece of sh**t?!”

One of the senior managers quickly walked over and said to Norm, “Sir, I think you are in the wrong place. Why don’t you leave?” I wasn’t there of course but I can just imagine the snooty tone of the request.

“No mate, mate … you’ve got it wrong. I want to buy one of these cars. How much are they and do you have them in stock or do I have to wait?”

“Sir, you are in the wrong place. Please leave.” came the reply.

Norm tried a couple of more times to set the manager straight, but was told in no uncertain terms that the police would be called immediately if he didn’t leave.

With a few well placed expletives, Norm left … very angry and embarrassed.

Fast forward 4 weeks …

Norm, still wearing his usual work gear (although it was nice and clean) drove past the Rolls Royce dealership, parked his new car, close to the same spot he had parked a month earlier, walked up to the showroom and called out seeing the guy who had asked him to leave.

“Mate … you should have listened to me and not make f***ing stupid assumptions. You could have got a nice commission cheque from your boss. Mate … you are a big d**kh**d!”

The manager, speechless, watched Norm leave the showroom, go back to his car, jump in and drive off. Norm had changed his old Dodge ute for a brand new top-of-the-range Bentley that he bought and had freighted from a dealer in Melbourne.

The bottom line of this story is to never assume the quality of a prospective client until you ask some questions and get to know them!

See you next post,

James E.

Are accountants boring?

When the word accountant is uttered at a dinner party it is usually followed by glassy eyes and the sincere attempt to repress a yawn by everyone in attendance. To many accountant = boring. Here is an article from our friends @ Monty Python as to why accounting and accountancy is not boring:

First let me say how very pleased I was to be asked on the 4th inst. to write an article on why accountancy is not boring. I feel very very strongly that there are many people who may think that accountancy is boring, but they would be wrong, for it is not at all boring, as I hope to show you in this article, which is, as I intimated earlier, a pleasure to write.I think I can do little worse than begin this article by describing why accountancy is not boring as far as I am concerned, and then, perhaps, go on to a more general discussion of why accountancy as a whole is not boring. As soon as I awake in the morning it is not boring. I get up at 7.16, and my wife Irene, an ex-schoolteacher, gets up shortly afterwards at 7.22. Breakfast is far from boring and soon I am ready to leave the house. Irene, a keen Rotarian, hands me my briefcase and rolled umbrella at 7.53, and I leave the house seconds later. It is a short walk to Sutton station, but by no means a boring one. There is so much to see, including Mr Edgeworth, who also works at Robinson Partners. Mr Edgeworth is an extremely interesting man, and was in Uxbridge during the war. Then there is a train journey of 2 2 minutes to London Bridge, one of British Rail’s main London terminal, where we accountants mingle for a moment with stockbrokers and other accountants from all walks of life.I think that many of the people to whom accountancy appears boring think that all accountants are the same. Nothing could be further from the truth. Some accountants are chartered, but very many others are certified. I am a certified accountant, as indeed is Mr Edgeworth, whom I told you about earlier. However, in the next office to mine is a Mr Manners, who is a chartered accountant, and, incidentally, a keen Rotarian. However, Mr Edgeworth and I get on extremely well with Mr Manners, despite the slight prestige superiority of his position. Mr Edgeworth, in fact, gets on with Mr Manners extremely well, and if there are two spaces at lunch it is more than likely he will sit with Mr Manners. So far, as you can see, accoun- tancy is not boring. During the morning there are a hundred and one things to do. A secretary may pop in with details of an urgent audit. This happened in 1967 and again last year. On the other hand, the phone may ring, or there may be details of a new superannuation scheme to mull over. The time flies by in this not at all boring way, and it is soon, when there is only 1 hour to go before Mrs Jackson brings round the tea urn. Mrs Jackson is just one of the many people involved in accountancy who give the lie to those who say it is a boring profession. Even a solicitor or a surveyor would find Mrs Jackson a most interesting person. At 10.00am, having drunk an interesting cup of tea, I put my cup on the tray and then…( 18 pages deleted here – Ed .) .. and once the light is turned out by Irene, a very keen Rotarian, I am left to think about how extremely un-boring my day has been, being an accountant. Finally may I say how extremely grateful I am to your book for so generously allowing me so much space. (Sorry, Putey ! – Ed.)

Need we say more?

See you next post,

James E

Accountants = idea generators?

Sorry everyone – didn’t blog last week! So here we go …

A while ago I was having lunch with a client of mine who had recently joined a 2nd-tier accounting firm having left one of the Big 4 for greener pastures. During the lunch my client told me about an exercise his old firm would perform on behalf of clients. It blew my socks off!

From time to time this Big 4 firm would hold a sandwich lunch for all their staff & partners in each of their offices around the country in a given week. The Brisbane office would hold their lunch on Monday, Melbourne on Tuesday, Sydney on Wednesday and so on.

The purpose of the lunch was to get as many people together – partners, directors, managers, graduates, support staff and others sitting around a table to talk and think about a particular problem or two and how they would solve it. Each table had a facilitator to help guide the conversation. The problems were real world issues that clients of the firm were facing. The purpose of the lunches is give the clients ideas they can use to solve their current business challenges.

The Big 4 firm would make an offer to their clients or even a prospect they are trying to win along the lines of, “How would you like a thousand of our staff who are amongst the best and the brightest in the market work on your problem(s)? By the way … there is no charge. It is our way of adding value to you and showing that we are here to help.”

What business or organisation would say no to such a fantastic offer? Having a thousand men and women of varying experience working on ways to solve the problems you have in your operations, marketing, recruitment and strategy is an incredibly powerful and compelling offer. The cost to the Big 4 firm  to facilitate the “ideas week” of staff lunches? Well it was simply the price of providing sandwiches and orange juice to their staff which of course would be a few thousand dollars. But think of the tremendous impact such an exercise can have on the clients and prospective clients of the firm.

Now … I know what you’re thinking. That is fine for a Big 4 firm – they have truckloads of resources and big budgets to do such things. However, since the lunch I’ve been thinking about ways in which smaller accounting firms can provide similar value for their clients irrespective of their size.

This will no doubt form the content of a future post or two 🙂

All my best,

James E

Are you getting the small things right?

Just for a moment forget about the big strategies, the fancy marketing campaign and the impressive training & development programs you have planned for 2015.  How are you doing at the small things?

Here is a checklist you might like to use so you don’t forget the small things. That aren’t in any specific order of importance. See how you go.

  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

As an accountant are you a hedgehog or a fox? (part 2 of 2)

Following on from the last post. Here is an alternate perspective on the question is it better to be a hedgehog or a fox?

For the professional accounting adviser – is it better to be a a fox?

Here is an alternate point of view from the prestigious Economist magazine. It says it may be better to be a fox. See: BETTER A FOX THAN A HEDGEHOG

CAN we blame the “experts” for not predicting the financial crisis? I don’t know of any scientific method that could have perfectly called and timed it. Some things were very troubling—global imbalances and the housing bubble—but did it have to get this bad? There were probably a myriad of ways it might have played out, some even worse, some better (remember the IMF  hoping for a happy and gradual unwinding). How can you predict a tepid, inconsistent government reaction (economists suffered a touch of hubris there) and market panic? Human behaviour is tough to predict and when humans try to anticipate what other humans will do—you can get a big mess.

Philip Tetlock, a professor of organisational behaviour at the Haas Business School at the University of California-Berkeley, talks to Money about why humans make poor forecasters and, if you must listen to one, what qualities to look for. He reckons there exists two types of experts:

The most important factor was not how much education or experience the experts had but how they thought. You know the famous line that [philosopher] Isaiah Berlin borrowed from a Greek poet, “The fox knows many things, but the hedgehog knows one big thing”? The better forecasters were like Berlin’s foxes: self-critical, eclectic thinkers who were willing to update their beliefs when faced with contrary evidence, were doubtful of grand schemes and were rather modest about their predictive ability. The less successful forecasters were like hedgehogs: They tended to have one big, beautiful idea that they loved to stretch, sometimes to the breaking point. They tended to be articulate and very persuasive as to why their idea explained everything. The media often love hedgehogs.

According to Mr Tetlock you should listen to humble, self-critical experts who shy away from bold pronouncements. The better ones often use words such as “however” and “perhaps”, instead of “moreover” and “all the more so”. That’s a tough sell to CNBC. He claims these thoughtful types have higher success rates. But I would classify the people who called the crisis as hedgehogs rather than foxes. A foxy economist would probably not incur the moniker Dr Doom. Our now celebrated prophets see no end in sight and think things will get much worse; should we still listen to them?

No. In our research, the hedgehogs who get out front don’t tend to stay out front very long. They often overshoot. For example, among the few who correctly called the fall of the Soviet Union were what I call ethno-nationalist fundamentalists, who believed that multi-ethnic nations were likely to be torn apart. They were spectacularly right with Yugoslavia and the Soviet Union. But they also expected Nigeria, India and Canada to disintegrate. That’s how it is with hedgehogs: You get spectacular hits but lots of false alarms.

Mr Tetlock seems to suggest we should listen (and we might want to listen to someone if only to falsely encouraged that we live in a world where chaos does not reign) to the very people who meekly warned of problems, but never said how bad things might get. Most of the time, they will steer you in the right direction. But they’re not infallible; only a hedgehog would’ve seen this coming.

What do you think?

See you next post,

James E

As an accountant are you a hedgehog or a fox? (part 1 of 2)

The web is an amazing thing – the largest most dynamic library human kind has ever known. I was listening to a podcast recently and came across to a reference I had never heard before – something about a hedgehog and a fox. After a little research I uncovered the piece below thanks to a website called Internet Marketing Secrets – for more info see Internet Marketing Secrets

The hedgehog and the fox, is an ancient axiom made known by Archilochus a Greek author & poet (645 BC) It simply states, “The fox knows many things, but the hedgehog knows one big thing.”

It became popular through an essay by Isaiah Berlin, where he divided the world into two types of thinkers… hedgehogs and foxes, based upon the ancient parable.

The fox is sneaky, and always trying to scheme up new ways. Their world is complex, always on the move, and they never tend to focus on a single unifying theory. The hedgehog is simple. They organize the world into a single unifying concept. The fox, for all his cunning, is defeated by the hedgehog’s one defense.

According to Isaiah Berlin’s essay, “There exists a great chasm between those, on one side, who relate everything to a single central vision… and, on the other side, those who pursue many ends, often unrelated and even contradictory… The first kind of intellectual and artistic personality belongs to the hedgehogs, the second to the foxes.”

In short, hedgehogs set goals, and they have systems by which they accomplish things. Foxes, tend to go off in all directions, without a methodology, goals, or systems to success.

When applied to a business, it means “Know Your Self” and your core competencies. Have a well defined culture. A vision. Know who you are. What you are about. And what you are trying to achieve.

The concept was widely popularized by Jim Collins’ #1 best seller, “Good to Great.” Why some companies make the leap… and others don’t.

According to Jim, “Those who built the good-to-great companies were, to one degree or another, hedgehogs. They used their hedgehog nature, to drive toward what we came to call, a Hedgehog Concept, for their companies. Those who led the comparison companies, tended to be foxes, never gaining the clarifying advantage, of a Hedgehog Concept, being instead, scattered, diffused, and inconsistent.”

As a professional accountant are you a hedgehog or a fox?

See you next post.

All my best,

James E

At long last – the new look is here!

After months of procrastination on my part I decided the blog was looking a little tired & I needed to find a designer/developer to give the site a whole new look and feel. Through a good friend, I was referred to Catie Hughes @ Loudcow. Catie in her patient and professional way worked with me to relaunch with a more functional & readable blog and site. I can’t praise her enough. So if you want a friendly, great and highly talented designer/developer/marketing/communications specialist – Catie is your woman!

How often will I blog? At this stage I’m committing to once a week on a Wednesday. When I first started blogging a couple of years ago I did it 3 times a week for many months, then moved down to twice a week. I found at the time it became somewhat of a chore rather than something that was fresh & valuable.

So to put us in the mood take a look at a funny & entertaining video courtesy of those crazy guys @ PwC in the UK. I love it when professional advisors be they accountants, lawyers, consultants or even auditors show their human side 🙂 Enjoy.

See you on Wednesday!

Keep well,

James E

 

 

Daniel Day Lewis – a frustrated accounting client?

Recently I was in a meeting with a CFO of a large privately-owned business with an annual revenue of $120m +. We were chatting about his thoughts regarding the accounting profession. Let’s call this CFO Daniel as in Daniel Day Lewis.

I came to a question of what can the profession do to improve its service to clients.  There was a pause. Daniel paused and then his face started to look redder and redder.

“You know what frustrates me the most James?” he asks rhetorically. “I resent the fact that we hire a firm of accountants/advisors to help us with a particular issue for which they have the right expertise and I end up managing their people for them! I’ve got enough things on my plate without having to set deadlines, follow up and provide guidance when it should be the partners job to take care of their own people. I really get sick of it”

Is Daniel being unrealistic here? What do you think? To my mind I don’t think he is. If you were to hire a building company to build a house for you is it up to you to deal with the various tradespeople directly and make sure the job gets done on time and on budget? Clearly it’s not. The building company would usually have a project manager with whom you can liaise to discuss progress and work through any issues that might come along. Is accounting any different? Or perhaps should accounting be different?

What are some ways in which accountants can offer their clients better service so that CFOs like Daniel don’t get frustrated and tear their hear out! I’ll share some thoughts in the next post.

Thanks,

James E

Are you an accountant who can save the world?

Recently I was at the gym. Don’t  be too impressed. I joined a group about 6 months ago that goes to the gym every Monday & Friday morning and I hate very minute of it! The only reason I go is that I know it is supposed to be doing me some good.

Between some boring weight exercises I chatted with one of my fellow victims at the gym. We both knew each other before the gym and have been friends for a few years. My friend is the Head of Design at a small to medium manufacturing firm which designs, builds and distributes catering equipment. The firm employs around 100 people and has been locally owned & operated for more than 20 years.

I asked my friend how business was going. To cut a long story short, the conversation moved to the impact of the so called “carbon tax” For my readers overseas, the Australian government introduced a tax on carbon producers so as to penalise emissions on 1 July 2012.

My friends firm, as one of the inputs into their productive process, uses refrigeration gas. This gas is one of the long list of items that attracts the new carbon tax. I was amazed to learn that before 1 July this manufacturing firm was paying a wholesale rate of $25 per kilo. Come 1 July the rate for the same gas increased to $160 per kilo. A whopping 640% increase! By the way … this manufacturer doesn’t use a kilo or two of gas a year – they use hundreds of kilos! And this is just one expense item that has been increased due to the carbon tax.

How do business owners and management cope with such a shock? In steps the accountant to the rescue. Given my work with accountants over many, many years I would have thought that  the above example is a golden opportunity to enter the business and use their expertise to help with solutions to manage such impacts on the business.

Numerous examples come to mind of accountants that I have met and worked with who are able to develop innovate ways to run business more efficiently and effectively. Its not just about numbers of course its about the helping the business do better!

Are you an accountant that can save the business world?

See you next post.

All my best,

James E

Are accountants really “Trusted Business Advisers?”

The term “trusted business adviser” is often used to describe the pinnacle of the accountant–client relationship. Everyone seems to want to be a trusted business adviser. The key element of this exalted title is trust.

However, like most pedestals or sort after titles, through their overuse the term quickly becomes cheapened. It seems these days that anyone with a business card, website and is wearing a suit becomes a trusted business adviser. This, fortunately, is not the case. Becoming a real trusted business adviser takes commitment, passion, patience and lots of hard work.

One definition of trust is the strong belief or confidence in the honesty, integrity and reliability of another person. Such a belief cannot be fostered in a quick coffee meeting or drinks at the cricket. Trust is built through a series of interactions that show you are honest and consistent, and have the best interests of the client in mind. Trust is something that is easy to lose but difficult to earn. Here are some characteristics of a trusted business adviser:

  • They invest time and effort in initiating and building a relationship
  • Often they give out to the client before receiving anything in return.
  • The focus of their activity is not fees.
  • They consistently look for ways to help the client.
  • They are patient and long-term in their thinking.
  • They are flexible in the ways they do business to suit the client, not simply themselves.

If you were to were to use the above six points as a gauge for your professional activities with your clients how would you rate? Are YOU a trusted business adviser?

Keep smiling and bye for now,

James E