Are you a proactive accountant?

Recently I was talking to a bunch of accountants who either ran or were employed by small firms. I get a kick out of meeting accountants and having the opportunity to get to know them and better understand their views on serving clients both big & small.

One of the ice breakers I use when speaking to small groups is to go around the room and ask for people to share three things. 1. Their name, 2. How long they have been in professional practice, and 3. One unusual feature of their practice.

The first two questions usually bring standard answers. However, the third question generates some very interesting and often insightful responses. One chap I asked had the following answer to question 3. “James … We call our client filing areas by first names – Trevor, Brendan, Florence etc… Each name represents a different type of filing area dependent on points in the client work flow.” I asked this chap why the names. He replied, “It’s much easier to say to each other ‘take this file to Trevor’, ‘Brendan has that file’ and so on. Of course they just have to make sure they don’t employ anyone in the future with the sane first names!

The insights of the above response I came away with was that this firm had a sense of fun, friendliness and didn’t take themselves too seriously. That being said – I got the impression that they are very professional in the work they do.

On the other end of the spectrum there was a gentlemen who in response to question 3 said the following, “I never phone a client. They always phone me for my help” With complete respect to the chap who made this statement, I think the sentiment behind it is rather poor and self-serving. One of the big themes of this blog, the book I authored & the speaking I’ve done over the last year is that clients want their accountants to be proactive. Unfortunately the above chap doesn’t fit into what most clients in the market want.

I hope you fall into the proactive group rather than the other bunch.

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,


If you’re in a disagreement – try this!

If you have read through this blog a few times you’ll know that I’ve been a big fan of the work of David Maister.

Here is a piece David originally posted in June 2006 which was titled “Maister’s Exaggeration Ploy” It is definitely worth a read!

I have noticed something very strange about engaging in discussions (and even disagreements) with people.

The more you disagree with them, taking the other side in an argument, the more vehemently they push their original point of view. However, if you don’t disagree, but restate their point in an exaggerated form, they often back down, or at least tone down their original statement.

This works so well, I’m thinking of copyrighting the idea and calling it “Maister’s Exaggeration Ploy.”

(I know, I know, there’s little new in this world and someone else probably thought of it before me, but I don’t think I stole this from anyone. And if I did, I can’t remember from whom.)

To see how my principle works, imagine a family member, say, a brother, who is upset at how he has been treated by a cousin. Your brother says: “I’m really upset with Jimmy. He had no right to speak to me that way!”

Because you want you brother to calm down and get over it, you might say: “Don’t let it bother you. Perhaps he really didn’t mean to be unkind.”

As valid as your point may be, you can bet your remarks will only serve to annoy your brother. After all, you appear to be defending cousin Jimmy by downplaying his intentions. This will set your brother off on another tirade, and also, probably, cause him to get annoyed with you, too.

But what if you had said: “You’re right! Jimmy’s a louse. He always has been! I think we should have nothing to do with him, ever again! Let’s leave him off the invitation list for all family gatherings from now on!”

Nothing with people is a certainty, but I would bet that your brother’s next remarks will be something like: “Well, maybe it wasn’t that bad. I’m upset, but there’s no point over-reacting.” You have calmed him down by agreeing with him and exaggerating his own point!

The same principle of exaggeration applies in the workplace. If your boss (or client) berates you because you were late in delivering something, don’t fight back, saying it was his or her fault (especially if it was!)

Instead, say: “I realize what a problem this has created for you. I’m really sorry that I caused you such turmoil. Can you help me figure out a way to prevent this in the future?” The boss (or client) will, with high probability, calm down and you’ll survive! Or at least the odds will be more in your favor!

Try my approach out. Let me know if it works for you!

See you next post.

James E

Does discounting help the accounting profession?

Recently I was in a coffee meeting with a friend of mine who is a partner in a top 10 firm chatting about the accounting market.  Roger (not his real name) was relaying to me an experience his firm had in a tender with a prospective client late last year. The tender was for a specific project around the need for the client organisation to restructure their tax affairs and as such it had some complexity – certainly not a straightforward compliance project.

Three accounting firms were involved in the tender: 2 “Big 4” firms and my friends top 10 firm.  My friend’s firm put their bid in at say $90k and one of the big 4 firms pitched at $140k. Now I have changed these price points to protect the innocent, but the relativities are the same. The other big 4 firm, for apparently the same scope, put their bid in at $40k. My initial reaction when my friend shared this with me was how incredibly foolish and desperate.  Unless there are specific strategic reasons to go in at such a low level or there is an excess of staff capacity that is not being utilised and needs to be “got working” why pitch at such a low price which is clearly (at least in the short term) unprofitable and unsustainable?

In the days since the coffee chat my thinking has turned to the much more fundamental issue that the above big 4 firm is not only doing themselves a disservice but also the entire accounting profession. By default, rather than by design, the firm, has in the mind of the market, devalued what they do for clients. This is incredibly dangerous since it has introduced the unsophisticated device of price as the key differentiator. Unchecked, widespread discounting will simply commoditise the profession and set in train a chain of events that will reduce the availability of high quality and tailored advice to only those who can afford to pay the top end firms.

For the sake of your own firm’s viability and the health/strength of the overall profession please think carefully before you discount!

All my best,


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 It is quite a rare thing for me to read an accountant suggesting possible New Year resolutions for the profession!

So here it is (

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 who asks good questions? (3 of 3)

Lets recap.

In the last 2 posts we have discussed the two hallmarks of effective communication – being simplicity and the ability to listen. We now explore the third hallmark – asking good questions.

The third hallmark of effective communication is the ability to ask good questions.

You would have heard me bang many times over the last year about one of my favorite maxims – “If you want a better answer … ask a better question … then listen”

Clients are impressed by accountants and advisors that ask questions they weren’t expecting or that they haven’t been asked before. It shows a preparedness on the part of the questioner that he/she invested time and effort in understanding the clients business and circumstances.

One of the best questions one can ask is “why?” If asked in the right way, the question of why can uncover a treasure trove of insights. There is a body of work that claims that asking “why” at least 3 times in the one meeting or conversation can uncover the root cause or motivation behind any aspect of business activity undertaken by people both internal and external to an organisation.

For example, a business owner may be asked the question, “Why are you in business?” The first response would most likely be “to make money” Further in the conversation, the business owner may then be asked “Why is it important to make money?” The next reply could be something along the lines, “so I can invest in my business” At a later point in the same meeting, the owner can then be asked, “why is investment important to you?” The answer may well be, “my core market is declining and I need to develop offering to new markets.”

By asking “why?” just 3 times the questioner has moved from making money to the business surviving. How interesting. The quality of advice that can be given based on the 3rd response rather than the initial 1st answer is chalk and cheese!

The above of course is an obtuse example but you get the idea!

Keep well,

James E.

Are you an accountant who listens? (2 of 3)

Hi everyone!

Hope you all had a great Christmas & New Year.

Sorry about being a bit spotty in my blog posting over the last few weeks. In 2013 my intention is post a blog everyone Monday & Thursday (Australian time).

My last real post was on Monday 17 titled – Are you an accountant that can talk simply? so I thought it best to continue the next 2 parts – so here we go.

The second hallmark of effective communication is the ability to listen – really listen. 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 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
    Wrong focus
  7. Gathering only facts
  8. Inflexibility while listening
  9. 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.
  • Provide clues that you are actively involved in listening.
  • Focus on content, not delivery
  • Avoid emotional involvement
  • Avoid distractions
  • Refrain from formulating an immediate response
    Ask questions
  • Use the gap between the rate of speech.
  • Be willing to accept revisions
  • Choose the right environment
  • Stay active by asking questions for yourself


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 🙂

Until next time.

James E