the right mindset for client accounting services

do you want to follow your clients or lead them?

by hitendra patil
the definitive success guide to client accounting services

it was the 10^th of may 2012.

more: client accounting services: the definitive guide
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over dinner on that quiet mid-spring evening at a classic traditional italian restaurant, i met the owner of one of my largest clients, only after about five years of providing services to his firm. his firm had chosen a particular niche industry to serve and only that. he was doing well – over $3.5 million in annual revenue, growing consistently and employing 39 staff members. in any given week, two new clients were being onboarded via a very detailed process, moving clients’ accounting databases and processes into his firm.

he would not take on any new client unless the client handed over all of the accounting work responsibilities to the firm. all or none. it was contrary to the way many of my other clients would operate when trying to sign on new clients.

i asked him: how can you afford to “lose” new clients, especially when they want to work with your firm? his answer intrigued me.

“do you go to a doctor and tell him or her how to treat you, which tests to perform, and what medicines to use? no. you trust the doctor to perform professionally. more than that, you trust the doctor to have only one purpose – to make you healthy/healthier. accountants are no different. those who come to accountants and tell accountants what to do and how to, do not trust accountants to be professionals who work in their (clients’) interest. i do not want to work with those who do not value professional accounting and accountants.”

in essence, what he was doing was putting to work his specialist, niche-specific accounting processes to good work, for his clients and for his firm’s revenue and profit growth. and he wasn’t allowing clients to lead the accounting processes. he was unwilling to follow clients’ procedures – which he knew couldn’t be professional accounting processes as his clients were not professional accountants.

after a pause to sip his drink, he further said, “i am a professional accountant. i do the client’s accounting. the client does his/her business. accounting is my business.”

“but,” i said, “every business has urgent purchases and payments to make. how can business owners wait for the accountant to process those from a different office miles away?”

“i give them remote access to perform their business functions whenever and from wherever they want. accounting for those? only i (and my team) do,” he said calmly and took another sip of his drink.

he had figured out, after nearly 20 years in the accounting business, that what clients call accounting and process in their accounting software is not accounting. it is just essential for some business functions. they use accounting software like a mini/micro erp system as one piece of the critical software to run their business operations.

his firm predominantly used desktop accounting software then. he moved the accounting software from his clients’ offices to his firm’s office. he took over all the it infrastructure management of maintaining, backup, storage and security of clients’ accounting software. but he made sure clients did not experience any operational difference at their offices.

there was one huge difference that clients did experience. growth of their businesses – with regular, consistent, timely professional accounting and the insights that came out from such professional accounting. it helped clients make better business decisions – with the help of their professional accountant.

this accountant seemed different (actually, i later learned he wasn’t really different; he was very similar to many accountants who thought just like him). his mindset was different. he understood his own value and the value his firm was capable of delivering to his clients. and he did not want to allow anyone to dilute that value. he wanted his clients to receive the best value a professional accountant can deliver.

that was his “filter.” his mindset.

“professional accountants do client accounting.”

his firm’s internal processes reflected that mindset. his marketing and sales processes reflected it. he had the cas mindset (well, the terminology “cas” had not been invented then, but he already had the cas mindset).

since then, over the years, i have met many more accountants like him – with the same mindset of “professional accountants do client accounting.” i keep meeting more of them now. i am now meeting increasingly more accountants who want to know how to achieve such results as my clients did – and experience the joy, the fulfillment of the professional pride it brings along.

the other side

on the other hand, i (and my team) worked with many accounting firms that mostly did the after-the-fact “write-up” work for small business clients. the main focus in such work was on data input, rather the efficiency of input, rather than on insights.

more often than not, the “review” was only about cleaning up of messy books of clients before producing monthly/quarterly financial statements – the dreaded “digital janitor job.”

there was pressure because of low(er) profitability. the volume was higher. the profitability was low(er). there was no time left to think of insights that could help the clients do better business. at times, we wondered why the clients left – some simply became incommunicado. only in hindsight, we saw their financial statements showed consistent growth – of losses!

the mindset was that as long as money is coming in the door, and net-net we are making money, our business model is okay. (sincerely – not to belittle anyone who has taken significant risks to start, operate and grow their accounting practices – but mentioning this just to bring out the contrast in the mindsets in a bid to give you the entire picture.)

there is nothing wrong with having this mindset, i.e., “i will do what the clients want me to do, even if it means just a part of the accounting work. ultimately, the customer is always right.”

what is wrong is the outcome of this mindset. it makes you, a professional accountant, a follower, not a leader.

remember, my cas mindset accountant i cited a few minutes ago made clients follow his processes. sorry – he and his marketing team explained their processes so well that clients wanted to follow his procedures. he led them. he did not follow them.

my book explains in detail several insights that can put you on your path of grand success in client accounting services (cas), but before that, it was critically important to feel the essential starting point.

that is, the mindset: professional accountants do client accounting.

this mindset is not difficult to learn and strengthen. it won’t matter if you did not have this mindset until now. you can develop it. if you already had such a mindset, you can strengthen it multiple times over.

posted on october 2, 2020