plus two traps to avoid.
by penny breslin
it’s not just the numbers
“we can evade reality, but we cannot evade the consequences of evading reality.” – ayn rand
the reality is that the robots and ai are here, and they will eventually take over much – if not all – of the day-to-day work that is typically done by a human interacting with a computer. you may not like it, but you cannot avoid it. so utilize robots to make your life easier.
more: use timesheets for productivity, not billing | best practices for source doc permissions and handling | every back office support client needs a playbook | strengthen client ties with workflow tools | understand your online marketing options | narrow your prospects by choosing a vertical | advisory services done your way | ai is not your enemy
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prepare for your meeting
do your homework before going out to the client’s office. if this is an existing client where you have been doing standard compliance work, review the data in their accounting program and make sure you are working with up-to-date information. if this is a new back office support prospect, ask to review their accounting data before going out to their offices. if they are not open to this, it may require an extra visit. the steps below assume you have either worked on the client’s accounting in some capacity, or you have had the opportunity to review the accounting files.
there are several aggregation programs that will import accounting files and produce good managerial reports. jirav (https://www.jirav.com/) or path simplex financials (https://pathbysimplex.com/), for example, are great web-based programs that you can call up on your tablet while in the client’s office and show them what you understand from their current accounting. this approach will help differentiate you from other accountants. it should help confirm the need for your services as well as allow you to suggest a few immediate fixes.
as we all know, the clean and perfectly allocated set of accounting books is a unicorn. we also know we can fix something immediately, which will dazzle the average small business owner looking for help.
how to get the most out of your on-site meetings
capture as much data while in the client meeting as possible – remember to use the voice recording capabilities of the mobile apps in onenote or evernote. today there are many inexpensive recording devices that will allow you to create outlines in words while recording the voice. one such app is otter.io, for the ipad or android tablet. show up with the tools that demonstrate how you want to work with the client. leave your notepads and file folders at home.
frankly, i get more information if i let the recorder take my notes while i focus on the people and the visuals in front of me. as a bonus, i have the start of the procedures we will follow once we get the work.
checklists or forms are another great tool for capturing information. firms with in-house database developers and adobe livecycle can utilize online forms to develop checklists. many web-based crms also have web-based forms that you can use on your intranet to enter checklist information. regardless of how you enter the information, capture as much information as you can while you’re on site and while using a cloud-based app for input.
if you have not been doing any of the bookkeeping or accounting previously, use your portable scanner to begin scanning items to build a back history. if the items in question are already digital, upload these to your web-based dms. here are some examples of documents to collect (and scan):
- old bank statements
- credit card statements
- previous year tax return
- one timesheet (if tracking time)
- current payables not already posted to accounting program
- current sales receipts not already posted to accounting program
- inventory counts if inventory is tracked
- backup of accounting program (upload this, do not email it)
- any loan docs for current loans
- employee setup information
- payroll totals to date
- bos notes
ask your clients questions about their whole business, not just the accounting. talk to people and engage with them. you are looking to become their trusted advisor and each person will be affected by your future work. recording in the background frees you from writing nonstop notes and allows you to move around and ask questions. questions, questions, questions, currently it is all you have on your agenda. if you are not the person in your firm who can do this, then find someone who can.
case study: what not to do (and how to save the day)
i distinctly remember one occasion when i was flown in by a firm to meet with a prospective client. the client was young and aggressive. the company was doing very well as a top designer and installer of multimedia, security and computerized controls for private homes. many of their clients were regularly seen on the big screen and in the news. we found several issues, but the one that got this meeting started was that the owner’s right-hand guy, who had been with him from the start and was the chief of operations, was moving. love of a certain young lady (and surfing) was taking him to australia. the owner, a typical entrepreneur, knew that he was going to need help from his cpa.
this was the first time this firm had ever had me on site with a client and i wasn’t really sure why they asked me. the room was full – the client and all of the client’s staff, three cpas (yes, three!) from the accounting firm, as well as a contracted quickbooks proadvisor.
the cpas introduced themselves, 30 minutes of credentials were presented, and 10 minutes were spent introducing the proadvisor. forty minutes in, we finally got down to what the client needed. he was open and honest about where he felt he was lacking in certain skills, his concern about the loss of brain trust with his departing employee, lack of internal systems, a messed up bookkeeping system and his overleveraged status at the bank.
because of flight delays, i arrived late, so i took the last available seat – right next to the business owner. the cpas and the quickbooks proadvisor were lined up on the right. that put me in a unique position to see his body language and how he reacted to the cpas commenting on his very valid concerns.
the cpas and the proadvisor began to speak about how they would need to look into all the bank accounts, probably ditch quickbooks and put him on their accounting product, would have to get back to him, as even the proadvisor did not see how they could help him if he continued to use quickbooks.
while they had reviewed the accounting files for this company before the meeting, they never left the conference room to look at the physical area of the business, nor did they ask any of the attending company employees any questions. just as they were about to end the meeting, the cpa who had insisted i come to this meeting asked me if i had any input. this meeting was already almost three hours long. my assumption was that i was to assist with anything they may need later. however, i did have a few items i felt needed pointing out.
what had floored me was that with all the outpouring of concerns and fears by the prospective client, the cpas and the proadvisor had not addressed any of his emotional concerns. by the end of the three hours, the owner looked like he could hardly wait to get out.
i went to the whiteboard that was at the end of the conference table and drew four columns. i wrote down all the emotional pains the owner listed in one column. they were his concerns of:
- loss of control – he was visibly blanching while the cpas spoke
- loss of his business partner – he was not sleeping well
- his lack of knowledge of finances – he was fearful
- taking over the back-office function at the expense of the sales side – he would be overextended
- and, of course, the overleveraged bank accounts – financial ruin?
then i wrote down all the functions they said they were using in quickbooks in the next column. in the third column i identified functions within quickbooks that were not being utilized to help alleviate his concerns. for example, i knew the simple step of using purchase orders (po) to estimates to jobs was one area where improvements could be made. i also identified the pre-payment rules in quickbooks to separate pre-payments from operational cash to help him manage cash flow. his overleveraged bank was really the tracking account for pre-payments that should have been made but weren’t. the final column on the whiteboard showed how each concern could be managed and resolved. the conversation lasted 15 minutes and i showed him that i acknowledged his concerns – being overleveraged at the bank – and provided him with hope that they were understood and solvable.
the proadvisor was stunned as she did not know quickbooks could do that. i am also a quickbooks proadvisor and feel that it is my job to truly understand that software. i would say someone made a mistake in hiring her. she was a great bookkeeper, though: she really had those journal entries down. the two partners, whom i had not previously met, sat with dropped jaws. the cpa who hired me smiled and slid a contract over to the owner of the business. the owner smiled and said, “wow, you actually listened to me.”
the details of the service level agreement took a bit more time to get finalized over the next few weeks. the annual fee – after the initial, separate fee for cleanup – came to $30,000 in the first year. the suggested fixes were not all-inclusive of what was eventually done. a deeper dive uncovered several other issues and adjustments were made. the firm is still providing bos services for this client and they still meet once a month.
as of today, four years later, moneypenny is being called back in at the request of the owner and the cpa to help him transition out of the business. he sold his business for a nice profit and now is going to surf.
some other common mistakes
if you or your team have the opportunity to meet with a prospective bos client at their office, or you have been doing write-up, quarterly financials and a tax return for them, make sure you come to this meeting with a different set of glasses. take off the green shades! you are in this meeting to focus not on your typical, after-the-fact accounting. you are looking for opportunities where, by taking over portions of their back office, your core expertise can assist the client in running a more successful business. this requires a different mindset. the first few times it may be difficult. here are two traps to avoid:
1. not keeping an eye on the actual goal of this relationship
one of my cpa friends tried to provide value-added bos services, but concluded, and rightly so, that she was not suited. she openly admitted this type of work was not her thing. the service she was attempting to provide was a flat-rate bookkeeping service. this is where she felt she went wrong in her own words:
- she did not insist that her clients give her access to anything, so she was stuck with calling them and nagging for source documents.
- she never managed to make that once-a-month dedicated meeting with the client, as she was too busy putting out fires in her own office.
- she kept her it in-house and was forever trying to figure out hardware issues.
- when she finally got the information, she reviewed in detail all the work her own people did, as she felt no one could do this as well as she could. sound familiar?
- any issues she had with the work she never communicated to her employees.
- she would spend hours redoing the financials, so they looked professional. my growing incredulous look prompted her to say, “yeah, i am kind of a detailed control freak.”
this cpa is a brilliant tax accountant. i have sent people to her who needed some heavy-hitting help with taxes. she has been in business for 18 years and has never been able to grow beyond keeping one office manager/bookkeeper. she said she could not get past having to create the perfect financial statement. she is happy she tried it and is very comfortable with her practice as it is today.
we salute her for understanding what she is good at. please understand this: working in the present means nothing is perfect. do not let the perfect get in the way of making headway.
2. maintaining the difference between scoped value work and additional services
the second trap to be aware of relates to the service level agreement (sla). this real-life example is about how and why it is imperative to use and revisit the sla regularly. in this case, the company was a bookkeeping and technology company. they used an asp or saas accounting program for clients, had a dms and a workflow system all in the cloud. they belonged to all the right networking groups. when setting up the work, they detailed out the scope in the sla. the sla has milestones, just as any good project does. those are there for a reason, as you will soon discover.
this firm ultimately reverted to hourly billing. in moving from the valued-added pricing to old billable hours, the owner lowered his hourly rate slightly to keep the clients happy. he can now drop the sla and is very busy. in fact, he is so busy, he is exhausted all the time as are his employees. he wears his exhaustion like a badge of honor.
what happened to the value-added idea? he lost money. i asked him why he lost money. his comments were not unexpected.
- the sla was created but never revisited.
- he instituted this valued-added pricing with new clients only.
- he found they were actually doing more work than was expected from their first conversation with the new client.
- and yes, they never stopped and called the client to mention the additional required work was not part of the original scope. why not? “well, we were so busy doing the work that by the time we got it done we realized we had priced it too low.”
- he never made those scheduled monthly meetings with the client for the first three months as he was always putting out fires.
the sla has milestones at month one, two and three, with a renewal annually for the reason that nothing stays the same. the more confidence you and your client have in the work and results means more responsibility for you and more importantly, more growth for the client.
when taking on a new client for this service, always separate out the initiation phase from the ongoing, monthly value-added services. the initiation phase is where you will lose your shirt if you do it at the ongoing monthly rate. the monthly rate relies on your ability to take advantage of systems to generate profit.