do your processes lead where you want your firm to go?
by hitendra patil
client accounting services: the definitive success guide
if you were to define how your firm is different in three sentences, what would those three sentences be?
write them down. read those the next day and judge for yourself if your competitors can say the same three sentences to differentiate their firms. if yes, you will see why this is a significant challenge for your firm’s growth aspirations.
more: how the pandemic changed firm mindsets | twelve clues it’s time to outsource or offshore | yes, you have the staffing for cas | why firms shy away from cas | hook your firm on cas | can you identify real cas prospects? | 8 ways to create your cas practice | do you value your cas value?
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the classic equation of “people, process, and technology” defining differentiation from the competition is somewhat flawed in accounting. by its very nature, accounting is about doing exceptionally well-defined work that follows clear laws and regulations. most firms have employees certified in similar lines of education and specialization. technology solutions for accountants are highly mature now.
in other words, you cannot consider that people and technology of your firm will help you differentiate competitively in the marketplace. what do you feel will your new prospect do if you pitch, “hey … we have the cutting-edge technology, and we have x, y, z certified people at our firm”? more likely than not, the prospect will feel, “hmm … i have been hearing that all the time.”
in the world of accountants having similar education, similar experience, similar services, comparable pricing, similar location and similar technology stacks, the biggest and the most potent differentiator to bring in more clients in your door will be your marketing and sales abilities. but, before and after that, what really defines your firm’s competitive advantage and unique selling proposition are your firm’s client accounting services (cas) processes. let us see why.
your operating processes
your technology stack can and will more or less be the most significant factor that will define your firm’s internal operating processes for your cas offering. for example, will clients need to send you bank statements by email because your accounting software cannot pull in transaction data directly from clients’ bank accounts? if so, your staff will enter data from statements into the accounting software. the time taken to complete this work, and hence the cost, will reduce your profitability because market forces will not allow you to charge more just because your costs are more. on the other hand, if you can automate bank data pull into your accounting software, your staff will need only to review the transactions auto-classified by intelligent software. i have seen several firms experiencing manual data entry work reduce by 70 to 80 percent, costs reduce by about 50 percent and profit increasing by 50 to 60 percent when firms implement bank feeds for about 60 to 70 percent of their clients.
but what happens if all firms implement bank feeds? will it not commoditize such services again? yes, it will. and this is where your processes come into play.
given the fact that most firms will have similar technologies and similarly qualified people, the “risk” in the minds of your clients/prospects are centered around whether they will receive the value they are looking for. they are, in other words, taking a bet on your firm’s processes, i.e., your firm’s different ability to leverage people and technology for the benefits clients/prospects are looking for.
in general, the following should guide your process differentiation:
- can you reduce the number of steps in each process without causing compliance and accuracy risks? i.e., speed, and cost reduction
- can your processes make it less overwhelming for your clients to share with you the information you need for accounting? i.e., take the information burden off from clients’ shoulders
- can your processes ensure a smooth workflow? eliminate process stops, e.g., faster handing off of outcome of one step to the internal customer who does the work of the next step on the process
- can your processes have built-in exceptions escalation mechanisms? i.e., quality: identify all possible errors and mistakes before delivering work to clients
- can your processes ensure everyone on your team has the same information and understanding of the client’s work? i.e., shared access to client work status
- can your processes help customize insights that clients need and want? i.e., deeply understand the client’s business
- can your processes create and deliver business decision support insights? i.e., relevance and usefulness of information you provide
- can your processes deliver a better customer experience? i.e., clients should feel no stress in interacting with your firm and people
- can your processes create/align with top niches and specializations? some sources to know which niches and specializations are in demand:
accounting today’s top 100 firms report
the top niches served: tech consulting, it and data security, international tax industry specializations, business valuations, business management for the wealthy, estate/trust/gift tax planning, forensics/fraud, cas/bpo, nonprofits, business intelligence, succession planning/family office, sox compliance/risk management, litigation support, retirement plans, employee benefits, investment advice/services, cfo/project staffing services, personal financial planning, strategic planning/business plans, small business management, cost segregation, blockchain, financing arrangements, payroll services/consulting, cash flow forecasting/management, bankruptcy /insolvency, 1031 like-kind, ifrs consulting, etc.
the top client categories served by 2020 top 100 firms are real estate, manufacturing, technology, midsized business, construction, nonprofits, professional services, health care facilities, wholesale distributors, hotels and restaurants, entertainment, investment companies, agriculture/forestry/fishing, cannabis industry, franchising, insurance agents and brokers, publishing/broadcasting/media, school districts, gaming, etc.
u.s. bureau of labor statistics
another great source of knowing which industries/professions will need more specialized accounting services in the upcoming 10 years is the “fastest growing occupations” in the occupational outlook handbook published by the u.s. bureau of labor statistics (https://www.bls.gov/ooh/fastest-growing.htm).
your client experience management processes
one of the most significant impacts of technological evolution has been on accounting firms’ client service processes. it is no longer sufficient just to deliver periodic, canned reports. client service is what your firm provides. client experience is what clients perceive, feel and how they use the insights you provide when they receive the service. to enhance your client experience, you want to manage it well. here are a few things to get you focused on client experience management through your firm’s processes.
every interaction your firm has with clients is part of the total client experience journey. do not leave anything to chance to shape such interactions favorably, e.g.;
- emails
- phone calls and voicemail messages
- every employee of your firm who interacts with your clients
- text and social media messages
- your content that clients read/view/listen to
- your website
- your reports/financial statements/periodic work outcomes
- your explanations of insights that clients can use
- business decision support you give to clients
- referrals clients give you –, and you give to clients
- the reviews and testimonials clients give you – and you give to clients
- your clients and vendors interacting with your firm’s other clients and vendors
- and so on
client experience emerges from human emotions. client emotions emerge from what you deliver and how you deliver it. according to a harvard business review research report “the new science of customer emotions,” emotional motivators provide a better gauge of customers’ future value to a firm than any other metric and can be an important new source of growth and profitability. without periodically and systematically measuring client experience, it is nearly impossible for your firm to manage and enhance the client experience.
and it is not difficult to develop and operate client experience measurement processes and systems. for example:
- implement periodic customer surveys (surveymonkey, google forms) and analyze the trends from client responses.
- track client referrals. a top 100 firm has a formal process to track how many referrals each client has given over each quarter. if the firm observes that any particular client hasn’t referred any new prospect, the firm reaches out to that client and asks, “we haven’t received any referral from you in a while. we are concerned and want to do everything we can to make sure you are absolutely delighted with our services. tell us what we can do so that you feel confident to refer your friends, industry peers and others to benefit from our services.”
- create emotional connections with your clients. don’t treat them as businesses or companies. the owners are humans first. reach out to them in their birthdays, anniversaries, when they accomplish something special and so on.
- compile lists of common questions clients ask. it will reveal the gaps in the training of your staff. act on these findings to close those gaps by continuously enriching your staff’s knowledge and expertise.
- every time you provide a deliverable (report, statements, etc.) to the client, within a day or two, ask for feedback. reassure the client that if she/he has any questions on those deliverables, you are available to answer those.
- leverage technology to create automated alerts/emails on vital financial indicators,pe.g., receivables amount going beyond a certain threshold. make technology work for you. clients will perceive it as “my accountant cares for me and my business, and is on top of things that can help me or hurt me.”
- proactively make relevant and useful introductions to help clients’ business. it need not always be referring those who will purchase from your clients. it could be introducing someone who can solve a problem that you and your firm doesn’t.
- make the clients a hero in the eyes of his/her clients and vendors. refer to the idea about how to “make your existing clients a hero to get more referrals.”
- don’t lose any “power moments” to reinforce emotional connection. according to dr. robert cialdini, the author of the groundbreaking book, “influence,” who is widely regarded as the “godfather of influence,” moments of power occur after someone thanks you for something you do for them. cialdini refers to one of the fundamental drivers of persuasion – i.e., reciprocity – people want “return the favors” like in give and take. so, when clients say “thank you,” do not just say “don’t mention it” or “no problem.” instead, say, “sure, and i know if i needed something from you, you’d do the same for me, wouldn’t you?” the idea is not to keep a score but to reinforce the emotion of gratitude and the client experience.