Accountants, Auditors and Selling in the 21st Century

 

It might seem a bit strange to put both Accountants and Selling in the same category, but accountants, as with all other businesses, have to sell. Today let’s review the challenges accountants face in selling: how they should and could overcome them.

 So what are the challenges that accounting firms and auditors face in the 21st century?

 

Issues that practices face

Fee based issues/Race to the bottom

1. Struggling to grow the firm, typically declining in size
2. Lack of a solid ‘go-to’ market model
3. Partners under pressure to bring in revenue
4. Staff recruitment
5. Partners are older, succession issue
6. Embracing new technology
7. Competition
8. Finding high quality clients

 

LETS BREAK THESE DOWN

Fee base issues/Race to the bottom

Price, Price, Price. Its all about price.

It’s seems to be the number one challenge that most accountants and auditors face in the market. The market pressures them to cut prices, which affects: profit, standards, staff wages, environment, motivation, staffing etc. However, Accounting and Auditing firms are not the only businesses to face this problem. It is probably the most frequently asked question in sales. I will delve into the solution later on in this article, but it is crucial to recognise the need to resolve this issue as it’s implications will drastically affect your growth as an auditor and accountant. It will affect your growth and adaptability, how you attract the right people, and ultimately, how to maximise your profitability.

 

Struggling to grow the firm, declining in size

A lot of firms struggle in the current market to grow, attract staff, getting clients to pay a fair price, adapting to technology, and ageing partners. These are some of the reasons behind the declining growth of accounting firms.

 

Lacking a solid ‘go-to’ Market Model

I see a lot of firms who do one thing only. As an example, they do accounts or audits only, and fail to take a step back and review their models and how adaptive they are to the 21st century needs of their clients. It’s critical that a firm has a ‘go-to’ market model. Most assume that they could repeatedly continue what they have been doing for the past 30 years, assuming it will continue to work, and live in hope that the world will adapt to them.

 

Partners under pressure to bring in business

You can’t do everything. If your time is spent bringing businesses in, who’s runs the business, who controls quality, what sort of service is the client getting from you? You are too busy selling. Too caught up in fixing problems, and not selling effectively. Relying solely on partners to bring in sales is a recipe for disaster, sales is a team effort and I will discuss how it could look later on in this article.

 

Staff recruitment

What’s your staff recruitment model? How does it work? How do you measure it? How does it correlate with your product? How is your product defined? How does it sync with your recruitment model? These are all critical questions to ask. We find most recruiting is based on supply and demand. It’s done at the last minute without strategy and without a model that is developing and growing your staff and your business.

 

Partners are older and succession is an issue

Where is the young blood coming from? Who is replacing you? And how are you bringing them through? The world has changed and is now very much about individuals, their IP and how their engagement will define your success. The classic example of this is LinkedIn. How do you use it? Are you using it? If not, why not? How do you pass your firm on to the next generation? Ultimately, what is your exit plan?

 

Embracing new technology

The world is changing. Xero has revolutionised accounting. They are an example of one of many disturbances in your industry. The others that come to mind are: CRM, messaging, social media. If you are not up to date, how can you help your clients run their business more effectively?

 

Competition

You know very well that it’s easy to undercut everyone in a sales environment on price. You do enough accounts to understand the balance between cost vs. benefits, and why it’s critical not to underpay for something. As an accountant, there are plenty of companies that need high quality services with well-paid and efficient accountants. The problem you face is your engagement model and product’s value proposition. Having this set up the wrong way, means that you will commonly end up in a price conversation.

 

Finding high quality clients

I have worked with many firms and have seen how they approach this. Most have a limited model for finding the right clients. These firms lack a scalable process that allows them to control the growth, control the numbers, control the pricing, and how your sales is working.

 

Suggested solutions

Fee base issues/Race to the bottom

This comes from not having a clear value proposition. An accountants’ role is not to do my books. I can get a bookkeeper to do that. Your job is to help me run a profitable business. As a client, I want you to work with me as I navigate through my business lifecycle. I need help on the following:

1. Accounts

2. My relationship with the bank

3. Cash flow

4. Investors and expansion

5. Overview on my profitability

6. Overview on my business strategy from an accounting perspective

7. Technology

8. Development of my business from a knowledge perspective

You might think that this is not your remit, but having worked with so many companies over the years. You should be aware of the world at large, what’s going on and how your clients should be engaging with the world. Taking myself as an example of having an accountant who does mediocre bookkeeping job for me, if he had taken the time to advice me and give me the benefit of his experience, I would be much more successful that I currently am. Now I am not saying you need to do all of them, but you definitely need to do some. You must be able to add value before you can charge higher fees.

 

Struggling to grow the firm, declining in size

Accounting and auditing is changing, so having a clear market strategy is critical. You need to have your Lead Generation model working well, your brand clearly defined, your sales set up in an efficient, monitor-able and scalable manner, your product and value proposition clearly defined. From here you can grow.

 

Questions to reflect on:

1. Do you use CRM well?

2. Do you use alternative technology?

3. What’s your message about how you help your clients?

4. How do use LinkedIn?

5. Do you use Snapchat properly?[i am having fun here, but there is a point to be made]

 

You might think why Snapchat? But the world is changing and we need to adapt to all communication platforms. In building your business, you need to clearly have a model there that you can assess, change, and push, depending on what’s happening in your market place. I am having a bit of fun putting Snapchat here, but again the world is moving forward and if you are not in the know, you are missing an audience. In the worst-case scenario, you should understand Xero, LinkedIn, Instagram, Slack, and other Social media marketing platforms.

 

Partners under pressure to bring in business

You need support. Partners always do too much. Their time is valuable, they need to sell, but they can also have other team members around them making their world work well. A good consultancy model has selling going on at all levels. DO NOT TRY AND SAVE MONEY DOING IT YOURSELF. IT’S A WASTE OF YOUR DOLLAR TIME.

 

Support teams should look like the following:

1. Proposal writers

2. Business Developers

3. Marketers

4. Diary planners

 

The key here is that if your billable rate is $300 to $1000/hour as a partner, then you need to make sure that everything you are doing that can be done by others at a lower rate is done by them. A doctors’ surgery is a classic example of this, the doctor does not do billing, greeting, paperwork, reports etc. Just like them, you need to be effective and delegate.

 

Staff recruitment

Once you have a clear strategy for sales and growth, and once you have your model clearly defined, you should then have a solid recruitment model.This is based around the careers of your staff, their progression, job scope, training. Once you define this, you need to build the model to find the right staff to engage in your world. Good staff need to:

1. Enjoy their jobs

2. Be well-paid

3. Be stretched

4. Have a clear career path

 

Partners are older and succession becomes an issue.

You have to have a succession model. Whether that is selling the business or passing it to team members. With no model of moving forward, you will end up stagnating. This takes time to build and it is a common problem in many companies that I see. As some point you need to move forward and if you start planning too late, you reduce the value of the potential your potential investment returns.

 

Embracing new technology

It might seem strange that an accountant is responsible for pushing new technology into the companies. But you see tech working in your own clients companies, or you should see it working if you are paying attention and working closely with them. Helping your other clients stay cutting edge is then becomes possible. The two things that come to mind are:

1. Accounting software:

Do not be scared, embrace it and bring it in. If it frees up time and makes your world work better, you get to use this extra bandwidth to help you help your clients in other areas. I am an example of the fact that I want your time, your knowledge and your wisdom. If you are undercharging me, have not got the time, then you cannot help me grow in other areas.

2. CRM:

This is at the core of successful businesses and should be working efficiently. A good CRM model makes everything flow and is the glue in clients’ sales. CRM gives you metrics and process. These are all things that you should be working with you clients on. Not just the dollars figures.

 

Finding high quality clients

Clients will pay for quality, especially if you can actually deliver quality and help you clients grow, have a more stable business and do a better job of doing what they do for their clients. Having a clear model of how you do this, what your metrics are, and the processes that you need to have in place to get there, will clearly make you a much more stable, scalable practice. But you need to get it right and across the board, not just in one area. There is no point fixing one thing and then leaving others a mess. You, as an accountant, know that dropping the ball in one area can have a dramatic implication on everything else that’s happening in a business.

 

Summary

The Accounting and Auditing world is changing drastically. Having a clear model in place to grow, scale and build your business is critical. These involve addressing your ‘go-to’ market model, your culture, the development of your staff, the services that you actually deliver to your clients and how you track and monitor everything. For us, we believe that your industry is going through a massive change and that the companies that are thriving are the companies embracing these principles.

 

At the core of this, you need a great sales model. Knowing that you have a steady stream of revenue from new clients and your existing clients allows you to plan, scale and build your business in a sustainable way.