Good invoices equates to good business

The other week I had an electrician come to my house to do some basic maintenance work. Nothing major, just a couple of hours of fixing some light fittings and changing the position of a few power points. I’ve used this chap several times before and have always considered him to be professional and a really good operator.

A few hours after the electrician left, I received an email with his invoice attached. Even though he was at my house for about 2 hours he provided me with a detailed, itemised and easy to understand bill. I knew exactly what he was charging me for and I was pleased to pay the bill right away. The bill amount was $198.25. If a busy electrician can find the time and make the effort to provide his clients with completely transparent bills, how much more should an accountant, lawyer, consultant, adviser and the like provide the same? I’ve heard many stories from business clients, irrespective of their size or industry, receive bills from professional services firms saying something like: “For services provided during August 2013 ……. $18,575 + GST” Come on good people – is that fair to your client?

Until next time.

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

Are you an accountant that can spot an opportunity?

Recently I was chatting with a CFO on the phone. To protect the innocent lets call him Anthony as in Anthony Hopkins.

Anthony is an accounting and finance professional with over 40 years experience. Over the last 15 years or so he has worked as a “gun for hire.” His speciality is to go into a business that is experiencing trouble and turn the place around.

Anthony’s current assignment is as an interim CFO of a small to medium manufacturing company. This particular business has been in operation for 50+ years and employs over 100 people. For some reason, the business has been trading at a loss for the last 10 years. Anthony, with a fresh set of eyes and some skill, within one year has turned around the business from a loss to a profit.

Now I know what you’re thinking … that’s easy James. Anthony simply went in, sacked a lot of people, controlled some other costs and got the business to make money. No – it didn’t happen that way. Rather, Anthony asked questions of people on the shop floor, middle management and of course of the owners. Through a combination of asking the right questions and some digging into the financial records, Anthony was able to uncover a fundamental flaw. The flaw was both simple and destructive. Believe it or not – no one knew what margin the business made on the products they manufactured. Or put another way … that they didn’t really know what it cost them to produce their products. So how on earth can they make a profit when they didn’t know the cost of what they were making.

In my phone chat with Anthony he told me that, armed with the above knowledge, it was a relatively straightforward process to make the necessary adjustments to get the business back to profit. A success story!

However, it was Anthony’s next comment that caught my ear the most. He noted, with some frustration and amazement, the fact that that the external auditors and accountants that this business had been using over the last 10 years (trading at a loss every one of those years) wern’t proactive enough to at least ask the question “Why the loss was occurring year after year?” As Anthony said to me, “It just reinforces the stereotypes of accounting firms and their people – they look through the review mirror and don’t come up with ideas to tangibly help their clients. They are more focused on ticking forms about the past and making lodgement deadlines. Its very sad – 10 years of missed opportunities.

Now compliance is important, but clients see it as a necessary evil – not as something that helps their business. Lets face facts, the majority of compliance services are simply commodities. The now and the future for the profession lies in advisory work which helps businesses make more money, save more money or save time.

Until next time,

James

Do accountants make NY resolutions?

Hope all is well with you as you come back from your Christmas & New Year breaks.

I was cruising the web today and came across a nice article written by Sandi Smith Leyva who leads an interesting business in the USA called Accelarator Websites (see http://acceleratorwebsites.com). It is quite a rare thing for me to read an accountant suggesting possible New Year resolutions for the profession!

So here it is (http://acceleratorwebsites.com/2013/01/resolutions-accounting-industry-2013/)

If you were making resolutions for the accounting industry, what would you suggest?  Here are five for your consideration:

1.   Recognize how valuable your skills are 

I’ve worked with a lot of accountants who do not realize how valuable their skills are in the marketplace.  Most people can’t do what we do with numbers.  We need to shake any self-limiting beliefs we have in this area because it limits our ability to serve more clients.

We rock at our technical skills, but the reason many of us have trouble communicating our value is because we could use some help on our writing and speaking skills.  Improving those skills just a little bit (or hiring others to do them for us when possible) will also help us make a better impact.

2.   Help educate others 

Financial literacy is needed everywhere.  The world needs help at both the basic and advanced levels.  One shocking example is how little press the largest financial scandal in the world, the Libor scandal, got last year.  I personally don’t understand why there wasn’t an incredible uproar unless no one understood what happened.  (Maybe one of you can explain this media gaffe to me).

3. Be curious

Often, I hear of clients driving the change in our profession, and accountants being “dragged” along.  I think we can be more proactive here!

I love finding out what clients really want; it helps me change my products to better serve the marketplace.  I think if this was done more often in accounting, the industry would be better off, as would our clients.  One easy way to do this is to send a client survey.

4.    Do your part to improve the economy

You have a very unique perspective that others don’t have.  You see dozens of financial statements across a large number of companies.  Many of you can easily spot a company in trouble; the question is, how many of you feel like you are in a good enough position with the client to help them with it and make a difference in their lives?

Sometimes they don’t listen, I know.  But they don’t listen because they are either afraid or they need more education, both of which we can help them with.  I don’t know the answer to this completely, but what I do know is we have the solution and they don’t.

If we want to make an impact on the economy, we have to find a way to be heard so we can share our wisdom.   No one else has the perspective we do.

5. Recognize how exciting the times are 

2013 may be the year that several key innovations gain the momentum they need to move into the mainstream.  One of these is cloud accounting which reduces the need for servers within the firm and minimizes the role of the desktop.  Another trend is the proliferation of tools to reduce data entry and other time-consuming compliance tasks.

One ongoing trend is the need for firms of all sizes to better embrace marketing to deal with either their competition or the ‘best-kept secret’ dilemma small firms and solos face.  A subset of marketing is pricing.  New efficiencies with technology plus changes in technology pricing will drive the need for new pricing models, although I think it will be a very long time before the billable hour is dead.  In both areas of marketing and pricing, our profession is light-years behind most other industries in this area of knowledge and skills; however, the early adopters are rocking here.

Globalization is another trend.  My tiny business has clients in about 10 countries now, a few of which I will never visit.

Thanks Sandi – well said!

Until next time,

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.

Are compliance services dead?

I’ve been doing a lot of travelling around Australia over the last few weeks for a client and have managed to catch up with some new & interesting people. During my travels I had lunch with a nice young chap who was working in a small accounting practice. It was himself working with two other more senior accountants.

Whilst we were munching on our salad I asked my friend how many clients his firm had. With great pride and gusto he said 7,500. That’s right you read it correctly – 7,500! He then went on with great pride to tell me that the systems & processes within their firm were top notch and that they give H&R Block a run for their money in processing tax returns.  The last comment was shared in the spirit of it being a thing of great beauty & virtue.

I was too polite (or gutless) to point out to my friend that his firm was on the wrong track and they would be working themselves into the ground providing a commodity (i.e. compliance services) that clients see very little value in and resent paying for. Does that sound too harsh? I’m sorry if it does but that is the cold hard truth.

Now I know you have heard for many years that compliance is dying and that it will go away and guess what it is till around. However, in the last couple of years in particular two big things have happened:

  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.

Please tune into the next two posts where I’ll be unpacking the above two big things!

See you next time.

James E

 

Are you a productive accountant?

The other day I was surfing the web and came across a most interesting article which appeared on the Business Insider site. Although it refers to general employees I think it has some salient lessons for accounting professionals.  The full article can be found — http://www.businessinsider.com/12-things-killer-employees-do-before-noon-2012-8 

A recent study published in an American Psychological Association journal, Emotion, suggests that early birds are generally happier than night owls.

More than 700 respondents, ranging from ages 17 to 79, were surveyed and asked about their emotional state, health, and preferred time of day.

Self-professed “morning people” reported feeling happier and healthier than night owls. Researchers hypothesize that one of the reasons could be because society caters to a morning person’s schedule.

It’s certainly true that the working world does. Working “9-to-5” is more than an expression, but a standard shift for many Americans. It also stands to reason that those who like rising with the sun are also the most productive employees in the office.

Do you want to be more like them? Then take note of the tasks these high-functioning, productive, and more awake employees have completed before lunch:

1. They make a work to-do list the day before. Many swear by having a written to-do list, but not everyone agrees on when you need to compose it. According to Andrew Jensen, a business efficiency consultant with Sozo Firm in Shrewsbury, Pa., the opportune time to plan a day’s tasks is the night before. “Some people like to do the to-do schedule in the morning, but then they might have already lost office time writing it out,” he says. “It helps to do that to-do schedule the night before. It also will help you sleep better.

2. They get a full night’s rest. Speaking of sleeping better … lack of sleep affects your concentration level, and therefore, your productivity. Whatever your gold standard is for a “good night’s rest,” strive to meet it every work night. Most health experts advise getting a minimum eight hours of shut-eye each night.

3. They avoid hitting snooze. Petitioning for nine more minutes, then nine more, then another nine is a slippery slope that leads to falling back asleep and falling behind on your morning prep. Ultimately it also leads to lateness. “Anyone can be made into a morning person,” Jensen says. “Anyone can make morning their most productive time. It could be that for the entire week, you set your alarm clock a little bit earlier, and you get out of bed on the first alarm. It may be a pain at first, but eventually you’ll get to the point where you’re getting your seven to eight hours of sleep at night, you’re waking up with all your energy, and accomplishing the things around the house you need to before going to the office.”

4. They exercise. Schedule your Pilates class for the a.m. instead of after work. “Exercise improves mood and energy levels,” Jensen says. Not only that, but “there have been studies done on employees who’ve exercised before work or during the work day. Those employees have been found to have better time-management skills, and an improved mental sharpness. … Those same studies found these workers are more patient with their peers.”

5. They practice a morning ritual. Jensen also recommends instituting a morning routine aside from your exercise routine. Whether you opt to meditate, read the newspaper, or surf the Web, Jensen says “it’s important to have that quiet time with just you.”

6. They eat breakfast. Food provides the fuel you’ll need to concentrate, and breakfast is particularly important since it recharges you after you’ve fasted all night. Try munching on something light and healthy in the morning, and avoid processed carbs that could zap your energy.

7. They arrive at the office on time. This one is obvious, right? Getting a full night’s rest and keeping your sticky fingers off the snooze button should make No. 7 a cakewalk. If you’re not a new employee, then you’ve already figured out the length of your average commute. Allot a safe amount of time to make it to work on schedule.

8. They check in with their boss and/or employees. We all know the cliche about the whole only being as good as the sum of its parts. In other words, if your closest work associates aren’t productive, then neither are you. Good workers set priorities that align with their company’s goals, and they’re transparent about their progress.

9. They tackle the big projects first. You can dive right into work upon arriving in the office, since you made your to-do list the night before. And Jensen suggests starting with the hardest tasks. “Don’t jump into meaningless projects when you’re at your mental peak for the day,” he says.

10. They avoid morning meetings. If you have any say on meeting times, schedule them in the afternoon. “You should use your prime skills during the prime time of the day. I believe that mornings are the most productive time,” Jensen says, also noting that an employer who schedules morning meetings could rob his or her employees of their peak performance, and ultimately cost the company.

The exception to this, he adds, is if your meeting is the most important task of the day. “Sometimes you have to schedule a crucial meeting, or a client meeting, in which case you’d want to plan for a time when employees are at their peak.”

11. They allot time for following up on messages. Discern between mindless email/voicemail checking and conducting important business. Jensen’s company, Sozo Firm, advises clients that checking their inbox every couple of minutes takes time away from important tasks. Instead, set a schedule to check and respond to email in increments. Consider doing so at the top of each hour, to ensure that clients and colleagues receive prompt responses from you.

12. They take a mid-morning break. Get up and stretch your legs. Or stay seated and indulge in a little Internet surfing. According to Jensen, it’s actually good to zone out on Facebook and Twitter or send a personal text message or two. “You should take 10-minute breaks occasionally,” he says. “Companies that ban any kind of Facebook [use], texting, or personal calls can find it will be detrimental. Those practices increase employee satisfaction.”

Just be sure not to abuse the privilege. “The best employees will respect their employer’s time, and the worst-performing employees will find a way to waste time even if the company forbids personal Internet use,” Jensen explains.

See you next post,

James E.

Think like a waiter/waitress

This is the 3rd and final installment of Thomas Friedman’s “ways to think.”

To recap … the first way was to think like an immigrant; the second way was to think like an artisan and the third way is to think like a waiter or waitress. Weird huh?

Thomas relays the story of him and a friend having breakfast in a local restaurant at which they were regular patrons. The waitress took their order of eggs, pancakes and fruit-salad and came back a while later and served the dishes. As she was serving the food she winked at Thomas’s friend and said with a smile, “I gave you extra fruit … enjoy” Needless to say she got her a higher than average tip that morning!

The lesson here is that the waitress couldn’t exert a lot of control/influence over her job; but what she could control she used to her advantage. In the above example she controlled the fruit-salad ladle and used this degree of control to make a good impression on her customer. Perhaps the ladle was the only thing she could control in her routine and repetitive task. If that was the case she used this degree of control and used it well.

As an accountant in professional practice, you have far more control & influence than a waitress or a waiter. So it follows to ask the obvious question, “What are you doing to impress your clients or prospects?” or put another way, “How are you using your degree of control?”

  • Are you phoning them up out of the blue for no reason to ask how they are?
  • Are you giving them the research report you found on the web that you think will help their business?
  • Are you arranging to go and see them to have a coffee and chat with no agenda?
  • Are you giving them that extra bit of service (i.e. extra fruit) without charging for it?

There are of course 100’s more questions one can pose. However, what’s important to point out here is that of all the above questions, start with the words “Are you … ?”

So it’s all about you!

To sum up this 3 part series of “Think like” I encourage you to think like:

  • An immigrant
  • An artisan
  • A waitress or waiter.

If you do change your thinking along the above lines, I dare say your business & personal life will never be the same 🙂

Keep smiling and bye for now,

James E

 

Think like an artisan

As outlined in the last post, Thomas Friedman, encouraged his readers and listeners to adopt 3 ways in thinking about their work and professional life. The first way was to think like an immigrant, the second way which we explore in this post is to think like an artisan.

First a definition – what is an artisan? According to the ubiquitous Wikipedia:

An artisan (from Italian: artigiano) is a skilled manual worker who makes items that may be functional or strictly decorative, including furniture, clothing, jewellery, household items, and tools.

To unpack this definition further, an artisan was/is someone who took/takes great care in producing items of a high quality that commanded a premium price. Think of Faberge, Doulton, or Tiffany. Usually these items, carry the brand or markings of the person or persons responsible for the design or production of the piece. It is with a sense of pride that the person has their name or initials somewhere on the product so the buyer or anyone picking the item up knows with just a glance whose work it is. Naturally the artisan in question would only put their name to something that was indicative of their skill, care and attention to quality. If the item was in anyway flawed or second-rate it would never bear their name.

So too the accounting professional should think like an artisan when it comes to their “product” – be it a report, working paper, advice or anything else that bears their name. If the product is not of the highest quality possible and meets the demands of the discerning purchaser (i.e. the client) then it should not have the name of the artisan accountant any where near it. Life is too short for shoddy work or the false economy of a “short cut”

In the next post, we’ll finish up with the 3rd way for an accountant and others to think.

See you next time,

James E