Is it simply enough to have quality in what you do?
Is it enough to have the best technical knowledge?
Is it enough to have efficient work practices?
Is it enough to have the best turnaround times and get your work out faster than anyone else?
Is it enough to be the best value accountant around?
Is it enough to be at the cutting edge and be first at everything?
Is it enough to give great service?
I say that these things are what you are expected to do as a minimum; in fact if your team are not focused on quality than they should not be there.
But what does that mean, and is that enough?
There is no denying that a successful practise needs to be efficient, but there is a difference between Efficiency and Effectiveness.
We have a saying: “We don’t reward Effort, we reward Results”
For example there is no point in a salesman working 7 days a week if he sells nothing. You can ask the laziest person in your practice and they will say they are working really hard – but are they effective and are they producing results? Do they know what their ‘product’ is?
Everyone in your business has a product they produce, and if they are unaware of what their product is they will spend hours not producing results – and results are what we are after… Not effort or opinions or rhetoric.
“If you don’t know what a bear looks like how will you know what to shoot at?”
For example, your receptionist has a ‘product’; it varies from practice to practice but in our practice, she has to connect the client to the right person in the organisation.
If she understands this than she will understand that simply taking a message and leaving it on someone’s desk does not mean she has achieved her product. She needs to find out from the client what they want so she can direct the client to the right person.
She also has to ensure that the staff member has called the client back either the same day or at the very least the next day (as we have a guarantee to return the client call in the same day or at the very least the next day if they are in a meeting). If they were in a meeting and unable to return their call the receptionist calls the client back and lets them know that the accountant is in a meeting and will call them the next day.
Her ‘product’ is not delivered until the client is connected to the right person.
Every person from the receptionist to the partner has a ‘product’, and unless they are aware of their product than they can be efficient but not effective.
Effectiveness is what you should seek from your team:
The 80/20 Rule taught us that 20% of what we do produces 80% of the results. (Conversely, the other 80% of the effort produces only 20% of the result.)
Being effective is about doing the 20% that produces 80% of the results.
For example, you may have spent 15 hours preparing a set of accounts and tax returns, and through some clever tax planning strategies you were able to save the client $50,000 in tax.
At this point you have done a great job; you have completed the task with quality and efficiency because it only took you 15 hours to complete work that took 20 hours last year. You should be congratulated for doing such an outstanding job and efficient job.
But is that enough?
You have been efficient but you have spent the 80% that only produces 20% of the result, because at this point the client has no idea what a great job you have done. The effectiveness (ie the 20% effort that produces the 80% results) comes when you pick up the phone and call the client and explain what you did for him and how you saved him $50,000 in tax.
The phone call which may only take 10 minutes is the 20% effort that produces 80% of the result. The 15 hours spent on getting the job done efficiently is the 80% effort that only produces 20% of the result.
So how many of you are being effective, or are you just being efficient?
Ed Chan
Non Executive Chairman and Founder of Chan & Naylor.
Ed started the firm from home with a few fees from family and friends and grew it into a national company with offices in most States of Australia and $12 million in turnover.
What can you do next?
Join us for a FREE teleconference where Paul Jansz will interview Ed Chan Wednesday 23 May @ 2pm QLD time. Listen to what Ed thinks, feels and does to raise the Quality and Effectiveness of the work in the Chan & Naylor network of firms.
Join the GPL team (including Ed Chan) for a ONE DAY TRAINING WORKSHOP, Gold Coast 22 June. Teach your team the key practice management essentials; workflow culture, workflow planning, communicating with clients, meeting expectations, and produce quality on time jobs every time!
How many times have I heard someone say that their Service Mission is to meet their clients’ expectations?
I say to you, if you have that as your mandate you will have a practice that will be in chaos and totally out of control. Let me tell you why: Unfortunately 80% of our clients are themselves reactive and out of control and if you allow them to manage you they will drag you and your team into their nightmare.
For example, how many times have clients dropped their BAS into your office the day before it was due and expected you to drop everything to attend to it?
Let me take you through a scenario:
Client A drops their tax return into your office and in their mind they have a turnaround time of 2 days as giving good service.
Client B feels good service is a turnaround time of 2 weeks.
Client C feels good service is a turnaround time of 4 weeks
Client D feels good service is a turnaround time of 6 weeks.
Now, let’s say you turned the work around in 3 days. This would be great service in my eyes, but in Client A’s eyes that was poor service because they expected a turnaround time of 2 days. Meanwhile, if you provided the same to Clients B, C & D, they would all agree that you gave great service.
Thus, your level of service is a function of the level of expectation of the client.
Consequently, most practices are totally out of control because they are trying to meet their clients’ expectations when every client has a different level of expectation, thus they’re simply being reactive and employing the ‘squeaky hinge that gets the oil’ technique.
So what should you do?
You should change the mandate from “Meeting your clients’ expectations” to “Managing your clients’ expectations”.
Let’s see how that changes everything; from a practice totally out of control to one totally in control. I’ll use Clients A, B, C & D again:
If your level of service is comfortable at 4 weeks turnaround, you should manage the expectations of Clients A and B down to 4 weeks so they work around you instead of you around them. Meanwhile, Client C and Client D will still find the service great anyway.
Simply put, rather than reacting to all your clients different expectations they are now working around you.
Now let me say that you need to get 80% of clients working to your timetable so you can manage the last 20%. With 80% falling in line, it’s now easier to manage the last 20%; they may be difficult to manage but at least it’s only 20%. It’s possible you may even lose a few clients in this process – but typically this minority gives you the majority of your problems, so it’s great to get rid of them to free up some capacity for the good clients.
Have you ever noticed that we tend to ignore the good clients because the few difficult clients take up all our time? This is just not right!
How do we manage expectations?
We manage our clients’ expectations by sending out an Engagement Letter whenever we receive their work.
The letter goes something like this.
“Dear Bill,
Thank you for sending your work in. We received it on the 24th August 2012.
Our current turnaround time is 4 weeks as it is the peak period for tax preparation.
Your patience is appreciated as we try to get this done as soon as we can.
Your last date for lodgement is the 28th February 2013, and there is no need to have it lodged by the 31st October 2012.
The approximate cost to prepare your tax return is between $1,500 to $2,000 depending on the amount of work involved in preparing the return.
If there is any missing information I will call you in the next few weeks.
In the meantime I am your Client Manager and I am assisted by Colin Turner. Your Partner-in-Charge is Mr James Brown. If there are any questions please do not hesitate to call either myself or Colin
Yours Faithfully
Julie Brown ACA
Senior Client Manager.”
This one letter answered around 6 questions and reduced the number of phone calls into the office by 80%.
For example (typical questions by clients):
1. Have you received my work yet?
2. Don’t I have to lodge by the 31st October?
3. How long will it take?
4. When is my last date for lodgement?
5. Are you missing anything?
6. How much will it cost?
In addition to answering the above questions it educates the client as to the team member who is handling their work and exactly who to contact should they have any enquiries.
Most clients only call you because they are unaware there is someone else they can call and – as you know – most things clients call about can be handled by someone else. You just need to manage the flow of enquiries and work coming in efficiently and not let the client manage you.
When we started managing their expectations our phone calls dropped by more than 80%! I thought “Oh no what have I done? We have lost all our clients!”
But the opposite happened; we were more in control, calmer, more orderly and hence we started to grow, clients were happier and profits lifted.
The lesson was that we should not allow the 20% of the clients to manage us and turn our lives upside down. Through education and strong leadership, 80% of clients will gladly work with you and you will have a practice that is calm, orderly and profitable.
With the Facebook IPO imminent, now is a good time to reflect on the last few years and the massive rise of social media. Companies like Facebook, Twitter, YouTube and LinkedIn have become tech-sector powerhouses and provide huge opportunities for businesses willing to harness them.
One of the most common questions we hear from partners of accounting firms is,“Why would we do that?”
It’s not an uncommon (or unreasonable) question. Here is the answer:
Earlier this year Facebook released figures saying that approximately 10 million Australians used the social networking site. Of that, approximately 8.2 million were aged over 18 and a whopping 66% check the site daily (That represents nearly a quarter of the country’s entire population).
As of January 2011, there were an estimated 2.5 million Australians on Twitter and, according to the 2011 Optus Social Media Report from last August, there was more than 1 million professionals on LinkedIn. These numbers are increasing fast, too – the number of Australian accounts on LinkedIn doubled in the 12 months leading up to that report.
What does it all mean? It means you need to investigate how to increase your brand image, plus create a communication plan with clients and future prospects to create a sales pipeline. We no longer go searching for information, it comes to us. That’s the power of the internet and social media. Can you imagine having 99% of your communication proactively going to your clients, instead of them searching for it?
Amidst this setting, Sensis recently conducted a survey examining the use of social media by Australian SMEs. The results were interesting: Only 14% of small businesses and 25% of medium businesses have a social media presence (I would wager that if you did that same survey with only accounting firms, the numbers would be even lower).
I don’t think many reading this would be offended if I suggested that – even among those who have a Facebook page or Twitter account – there are few in the accounting industry using these tools to their full potential. If we’re all honest with each other, there aren’t even that many firms using social media well.
Rather than taking advantage of these (free) avenues to promote their firms, interact with existing and potential clients, connect with other businesses, and improve their branding all too often accounting firms are represented by bog-standard Facebook pages that never receive updates and silent Twitter feeds – frequently the product of a meeting that decided it was important to have a ‘presence’ but came without a strategy and received no real follow-through (Sound familiar?).
The truth is that there is no ‘correct’ strategy for social media, but – like anything – it’s important that you have some kind ofstrategy, and follow it through. Some firms use social media to share blog posts and articles, some use it to interact with their local business community and build their brand, others take advantage of the opportunity to let the world know a bit more about their people – humanising their business, then there are hybrids of these, and other approaches.
The biggest hurdle we’ve uncovered (and this applies to marketing generally) is that, for many accountants, they are too busy doing accounting work, and aren’t really sure where to start.
This is where we would love to hear from you. Does your firm use social media? If not, why not? If so, how have you gone about it?
Want to learn more?
GPL Network has launched its Social Media Short Course webinar series commencing on the 7th of March aimed to educate you and your accounting team to the powers of social media. Click here for more information and to register.
By Ed Chan, Chairman and Co Founder of Chan & Naylor
The rhetoric over the last few years has been that we should charge a client based on the ‘value’ we bring to them and not charge by the time we spend on the job.
We have even been told that it’s dishonest to charge clients by time because the incentive is to take longer to do the job.
Despite this, our profession has enjoyed a reputation for being the most trusted advisor, against some pretty impressive competition such as the medical, architectural and legal professions – amongst others.
Whilst it may appear on the surface that charging a client by the value we bring to them is fair and reasonable, I would like to put forward a counter-argument against this practice:
The average person would love to earn more money for less effort and Value Pricing was the latest brainwave to justify – let’s face it – ‘over-charging’.
But what if the shoe was on the other foot and we were personally over-charged for services justified through Value Pricing?
For example, what if your GP was able to save your life due to early detection of a life-threatening illness and instead of charging you the usual $60 for a 15 minute consultation decided to ‘Value Price’ his services and charged you $50,000 because he determined that was the value, to you, of your life
Or what if you were charged $9,000 to replace a single tyre on your car because that was the value to you of avoiding an accident due to worn tyres?
Whilst these may be extreme examples, the point is made that Value Pricing has to be acceptable when the shoe is on the other foot.
What would happen if you did not value something the same way the service provider valued it? Are you prepared to debate the value of every task?
When one uses such an arbitrary way to price services it opens up a can of worms because “value” means different things to different people.
Let me put it another way:
As accountants you know that there are heavy penalties for promoting illegal tax avoidance schemes. There are several tests the ATO puts you through to determine whether you have breached their Promoters Penalties rules; one of the tests is whether the promoter had charged a fee based on the value that was brought to the client such as a percentage of the tax avoided.
Whilst the ATO example has nothing directly to do with the above argument, it proves the principle that value pricing according to the ATO is mischievous, wrong, borders on deceit, is open to abuse, driven by greed and dishonesty.
However, if you had charged the client based on your time on the job, the ATO does not see this as being mischievous.
I, for one, hope that a short term grab for cash called ‘Value Pricing’ does not become the normal culture of our profession because whilst the majority of Accountants would do the right thing, it’s open to abuse and misuse, and it only takes a minority to risk the long term reputation of our industry as “most trusted advisor”.
As everyone knows, it takes a long time to build something (including reputation) and a very short time to pull it down.
Thanks for reading and your comments are welcomed…
Regards,
Ed Chan
Co Founder, Chan & Naylor Accountants.
LAST CHANCE WORKSHOP, 29 February, Holiday Inn Darling Harbour
Join me and Paul Jansz from GPL on 29 February at the Holiday Inn, Darling Harbour. I’ll be sharing what, why and how I moved to the next stage of business (from $400k, to $800k and beyond $1.0m in fees) in a 3 hour breakfast workshop for everyone in Sydney, 8am – 11am.
Click here to register, tickets are $395 + GST, or we have an offer of buy 2 tickets and receive the 3rd ticket FREE. Only 5 tickets remain!!
A little about ME, Ed Chan;
I Co Founded Chan & Naylor which began in 1990 with a few fees from family and friends working from my home. Over the past 20 years we have created a national firm with $12 million in fees and offices in most States of Australia.
WHY YOU SHOULD NEVER PREPARE A TAX RETURN IN FRONT OF YOUR CLIENT!
By Ed Chan, Chairman and Co Founder of Chan & Naylor
I believe the single biggest mistake accountants make is to prepare tax returns in front of their clients. The reason accountants give for doing this has more to do with efficient work principles as an accountant than it does with “good business principles”.
Typically the justifications given are: It’s more efficient, it’s much quicker, and one gets paid on the spot. All are good reasons from an accountant’s perspective, but does it lend itself to good business practice?
There are several reasons why one should never prepare a tax return in front of a client, and all have more to do with good business principles and less to do with being an efficient accountant.
1. Human nature puts a value on a product based on how much time one spends on it. One does not put any value in the years of experience nor the cost of equipment, nor the software cost, nor the rental of office space or cost of support staff and so on.
Let me give you an example: You have a black mark on the door of your car and, after spending several frustrating hours trying to wipe it off unsuccessfully, you finally take it to a panel beater and ask for a quote. The quote is $500 and you have to leave the car there for a couple of days. The quote seemed reasonable especially since it will take several days to get this done.
However, if you actually saw what the panel beater did – which was to use a special solvent on a rag and simply wipe it off in under a minute – you may perhaps question the value of the $500 without putting any value on the years of knowledge required to know which solvent would work without damaging the duco.
Value is all about perception, salesmanship, presentation, point of difference, and managing client expectations.
How many times have you questioned the $6 cost of a cup of tea in a restaurant when you know the tea bag would have cost them 20 cents? (Actually maybe only accountants do that or, worse still, maybe only I do that).
Naturally, the reason why we are prepared to accept the higher price for the cup of tea is because of the other things; including atmosphere, ambiance, company, surroundings such as furniture, and friendliness of the staff and so on. All of these factors make that cup of tea worth the $6 one is prepared to pay for it. Notice that the quality of the tea itself is only one part of the whole experience.
So, what has all that got to do with preparing a tax return in front of your client?
Imagine if the tax return only took you 20 minutes to complete in front of your client and you charged him $120 for it. He would equate that to an hourly rate of $360 and place no value on the many years of experience and the high level of skill required, nor would he take into account the huge overheads required to support the business.
However, if you prepared the tax return in the back office away from the client, and it was bound professionally, and the client finally receives it after a couple of weeks, the perception is that there is more value and substance here due to the perceived time taken to prepare it and the way it was professionally presented.
Hence there would be less resistance to the price charged because value is attached to time taken and quality of presentation. Value is all about perception. These are the business principles that separate a Practice from a successful Business.
2. By taking the tax return away to prepare behind the scene you can reduce the cost of producing it by using a less experienced and lower cost person to prepare it. A more experienced person would be used to check it to ensure the quality is maintained.
Hence 90% of the time spent on preparing the tax return is by a lower cost person and 10% of the time/cost is incurred by a higher cost and more experienced person.
This is proper management of your resources resulting in tremendous profits to the business. You are driving the cost down to the lowest cost resource of your business.
3. You are providing training for your junior staff, which is an investment in your asset base and Balance Sheet. The better trained your team, the more efficient they are and the more profitable the business.
I often compare the preparing of a tax return in front of a client for its efficiency and quick turnaround as being focussed on the P&L and not the Balance Sheet. As you know, if you don’t make an investment in your Balance Sheet you will not have an asset base that can potentially generate a passive return.
4. This is working ON your business and not IN your business; training staff, developing systems, and educating clients is all about ensuring a sustainable business for the future.
Thanks for reading, your comments are welcomed…
Regards,
Ed Chan
Co Founder of Chan & Naylor Accountants.
A little about ME, Ed Chan;
I Co Founded Chan & Naylor which began in 1990 with a few fees from family and friends working from my home. Over the past 20 years we have created a national firm with $12 million in fees and offices in most States of Australia.
Yes, I have made my fair share of mistakes along the way, as well as shared in a lot of successes. I’ll be sharing what, why and how I moved to the next stage of business in a 3 hour breakfast workshop for everyone in Sydney. Join me and Paul Jansz from GPL on 29 February at the Holiday Inn, Darling Harbour. Click here to register. We will be commencing from 8am for 3 hours, tickets are $395 + GST, or we have an offer of buy 2 tickets and receive the 3rd ticket FREE.
If you’re not from Sydney or cannot make the workshop on 29 February, we will be running a Tele-webinar on Wednesday 15 February at 12 noon QLD time, 1pm AEDT, where Paul Jansz from GPL will interview me on; Value is about perception, salesmanship, presentation, point of difference, and managing client expectations. Click here to register, it’s FREE!
THE TRUTH ABOUT ‘FIXED PRICE’ versus ‘CHARGE BY TIME’
By Ed Chan, Co Founder Chan & Naylor.
WHICH IS BETTER?
Many pages of literature – and even books – have been dedicated to this subject, and many hours have been invested by many commentators over the merits of either one over the other.
Even unkind words have been dished out to proponents of those who have used the ‘charge by time’ method by accusing them of dishonesty and deceit. This has become a highly emotional topic.
The answer to this question is best answered from the point of view of what would achieve a win/win for all stakeholders, because unless all stakeholders win, the strategy will fail in the long term whether it’s ‘charge by time’ or ‘fixed price’.
There are 3 stakeholders:
1. Clients.
2. Accountant.
3. Accounting Profession as an industry.
1. Clients.
In answering this question from the point of view of the client, one does not need many years of experience to know that no one likes surprises – especially clients. In other words, no one likes being given a bill unexpectedly; whether the bill is $1,000 or $10,000. All clients want to know what the approximate amount is upfront and what are they getting for this figure.
Put simply, one needs to ‘manage their client’s expectations’. Up front.
For example if I was to use ‘charge by time’ and at the end of the job gave the client a bill for $5,000 when the client was expecting $2,000 then I will have a problem.
However if I managed the clients expectations up front and said something like “My charge out rate is $200 per hour and it may take 20 to 30 hours to get this done, so the cost could be anywhere between $4,000 and $6,000″; then if it than came in at 25 hours or $5,000 the client will not have a problem.
If the work was to exceed 30 hours and you called the client and explained the reasons behind the need for the extra time and the client was satisfied with the reasons you will also not have a problem.
If you were to quote a ‘fixed price’ and you did not manage the clients expectations you will still have problems. For example, if you were to quote a fixed fee of $5,000 and did not explain what the client was getting for $5,000 you could lose that client if they perceived that $5,000 was simply too expensive.
If you gave a quote of $2,000 and did not explain what the quote covered and the client got a quote elsewhere for $1,500 you would have lost that clients work even if the quote for $2,000 covered a lot more.
In all cases the problem was not whether it’s ‘fixed price’ or ‘charge by time’ – it was ‘not managing your client’s expectations’.
2. Accountants.
From the accountants’ point of view, your work falls into ‘Structured’ versus ‘Unstructured’ projects.
Structured projects are fairly straightforward and you can identify a fixed quote; for example, last year’s bill was $2,000 and there has been no additional activity this year so one can confidently quote $2,000 plus CPI for this year.
However some projects are ‘Unstructured’ because you don’t know what’s involved and can only approach it on a ‘charge by time’ basis.
If you attempted a ‘fixed price’ and you under-quote you could potentially lose a lot of money. Many businesses have gone under by miscalculating their quotes; the building industry is notorious for this and there are many builders who have gone broke.
If you over-quote you may not win the clients work and potentially do damage to your firm’s reputation for perceived over-charging. A client may conclude that if you are over-charging here you are over charging with everything else you have to offer.
It takes years to build a business reputation and only a short time to destroy it.
The problem once again is not whether it’s ‘fixed price’ or ‘charge by time’ but rather ‘poor management of clients’ expectations’.
For ‘Unstructured’ projects I generally manage the client’s expectations as follows:
“Peter, it’s very difficult to know how long this project will take to complete so I will charge you a half day rate of $800 and if it takes around 2 days it will cost you $3,200. However, I will have a better idea once we get into the job and I can give you day by day feedback on how much time is required.”
Hence at the end of the first day if it requires another half day you would go back to the client and explain that it will take a further half day at $800 and the reasons why.
Again if you ‘manage the client’s expectations’ you will not have a problem with ‘charge by time’.
However if you proceed by spending an extra day on the job without communicating the extra cost to the client you will have a problem. This has nothing to do with ‘fixed price’ or ‘charge by time’ but rather proper management of your client relationship.
If we address the problem (poor management of clients’ expectations) and not the symptoms (‘fixed price’ or ‘charge by time’) we will better understand what needs to be done and not only will you have a happier client but you will also make some money and not run the risk of under-quoting and losing on the job.
For those who argue we are selling “value and not time” then it still comes down to ‘managing your client’s expectations’ because the charge out rate of a service of a higher value would simply be charged at a higher rate to reflect the extra value in the service.
For example, if it’s for bookkeeping services then it would be at a lower rate than tax planning services, or buying and selling a business, which would warrant a higher chargeable rate.
I may charge $4,000 for handling a sale of a business, and it took 10 hours which equates back to $400 per hour, but preparing a tax return could cost $2,000 and if it took 10 hours this would equate to $200 per hour.
Proponents of ‘fixed price’ argue we should charge by the value we bring to the client; but isn’t that the same as a higher rate for higher value services?
Absolutely, but no matter how one spins it, it still comes back to ‘managing your client’s expectations’.
Some have even charged $3,000 for a task that took an hour. It still meant the hourly rate was $3,000, albeit it was worth that to the client because of the value it delivered.
In this instance a quoted price would be appropriate but will require great skills at managing your client’s expectations.
Hence it’s never one method at the total exclusion of the other method. It’s simply a matter of picking the right method for the circumstances.
So, different charge out rates for different value services? Absolutely. But please don’t try and tell us it’s some sort of revolutionary system that has been discovered by some hot shot American guru.
Please spare us the hype and the spin.
3. Accountancy Profession.
For many years the Institute of Chartered Accountants and the CPA did not allow their members to advertise their services, and as a young Accountant just starting out, I could not understand these rules and often criticized it for restricting my growth.
However, many years later, as a mature Accountant with many more grey hairs I have come to understand the wisdom of those By Laws.
Within other industries who provide a quote upfront for their services (such as car repairers and builders and many other industries) we have seen the competitive nature between operators drive prices down in an effort to get sales. The process has also driven down the quality of their service as they cut corners in an attempt to maintain a profit margin.
In some cases under-quoting has caused their own demise and damaged their industries reputation. For example, the building industry has a poor reputation for the tendency of some builders to go broke leaving tremendous damage in their wake.
Our Accountancy Profession has maintained a reputation of integrity and honesty.
Accountants enjoy the highest levels of trust of any profession with their clients and this has partly been achieved by not allowing the quality of our services to be driven down to a price by the competitive nature of ‘fixed price’ quotes that can potentially be used against one another and ultimately has the potential to compromise the reputation of our industry.
SUMMARY
I for one, argue that the client should be treated with respect and honesty and either the ‘fixed price’ quote or ‘charge by time’ method works well if one manages the clients’ expectations well.
On the other hand if the clients’ expectations are not managed well then you will still have problems no matter what method is used.
Fixed price – if used inappropriately – such as predatory under-quoting, could lead to behaviour that could be detrimental to our industry and our standing as the trusted advisor.
If your quoted fixed prices are consistently higher than your competitors you could do your firm irreparable damage as you get a reputation as “the firm who over-charges their clients”.
Rather we should train our Accountants to better ‘manage their clients’ expectations’ which will not only reduce problems but strengthen the relationship and preserve the status of “most trusted advisor.”
Let’s address the problem and not the symptoms.
Rather than alienating those who use one method over the other, there is much more mileage in teaching our colleagues to improve their interpersonal skills so they are better equipped to manage their clients’ expectations.
Regards,
Ed Chan,
Co Founder of Chan & Naylor.
(Ed Started his Practice from home with a few fees from family and friends and grew it into the top 40 BRW Firms in Australia with offices in nearly every State of Australia and $12 million turnover.)
I’ll be joining Paul Jansz and GPL Network for a series of breakfast workshops, with the next workshop scheduled for 29 February in Sydney at Darling Harbour. Click here to register. We will be commencing from 8am for 3 hour workshop, tickets are $395 + GST, or we have an offer of buy 2 tickets and receive the 3rd ticket FREE. We will take you through the 3 stages of your Accountancy Practice Life Cycle whether you are at $400K, $1.0 million or $3.0 million in fees. Learn the steps to break through each barrier and grow to the next level.
If you’re not from Sydney or cannot make the workshop on 29 February, we will be running a Teleconference Call, where Paul Jansz from GPL Network will interview me on the above topic, and the 3 stages of the Accounting Practice Life Cycle. Register now, it’s FREE!
After nearly 6 years of successfully training and coaching accounting firms, it still continues to amaze me how many of you did not sign up to the local CFA as ‘firemen/women’, yet you did! Your role as a leader is to lead by identifying and developing leaders, inspire and relationship manage clients to drive results. Stop putting out fires, and get focused on your role in 2011.
Keen to hear your thoughts on how you will do this?….
It’s my opinion that a Practice Manager (specifically, the RIGHT Practice Manager) can be one of the most valuable resources an accounting firm can have. Would you agree or disagree?
The true role of a Practice Manager should be to run workflow and efficiency management. Workflow management should include a combination of:
Client classification;
Planning work (12 months in advance);
Understanding and applying GPL’s Super Profit Cycle methodology;
Understanding capacity and matching work to meet capacity on a 90 day rolling plan;
Knowing and meeting client needs;
Communicating with the client throughout the job;
Quoting up front on all jobs and discussing payment terms before the job commences, and;
Working with the accounting teams to hit the productivity targets for the firm – including job turnaround times and financial targets.
What are your thoughts? Is this what your firm’s Practice Manager is doing? If you don’t have one, do you think you might need one?
Over the past five years accountant’s salaries have continued to increase, but has the level of productivity and recoverability matched the increase in team members salaries?
As we all know, the industry average for a return on a fee-earning team member is 3.3, heading towards 3.5. Therefore if you pay a team member say $100,000, you expect that team member to produce $330,000 as a minimum, heading towards $350,000; providing us with a GP of 65%.
What do you think? How should we calculate our return on our fee-earners? Should we continue to operate in the old school methodology, or is there a better way?
Nearly twelve months of planning and all over in just 3 days! A big thanks to everyone that attended GPL’s 9th(!) annual Leadership Conference at Jupiters here on the Gold Coast, as the success of an event like this can only be judged on the response of the attendees.
That being the case, this has been one of the best Leaderships yet with a range of interesting guest speakers, opportunities for firms to take time out to plan for FY2011/12 and beyond and even a little bit of fun. It is always gratifying to us to know that the accounting firms that we are working with not only enjoy themselves, but (just as importantly) take something back to their firms to help them improve, strategise and make positive changes to their businesses.
Prior to writing this, I spent some time going through the feedback from the event and have to say that I’m impressed; the average rating over the course of the 3 days sits at 7.63/10 – something everyone here is very proud of. Of course, we are conscious that there’s always room for improvement, and that’s exactly what we intend to do with Leadership 2012. Planning is already underway and we are going to be jetting off overseas to a soon-to-be-disclosed location. Stay tuned for details!
GPL Networkrecently conducted a national survey of Accountants’ salaries and performance which revealed a number of things about the industry at present. One of the most interesting, and perhaps worrying, related to the average charge percentage that most accountants generated.
Discounting the Partner data – as their role necessitates a lower time spent on chargeable work – average charge percentages nationwide fell between 63% and 70%. This doesn’t take write-offs or discounting into account, which means that one-third or more, of the average accountant’s time is unrecoverable!
Think about what this means for your firm… Sure 100% is never going to be realistically attainable – but if you could even lift your team’s performance by 10% across the board, wouldn’t that have a huge impact on your business?
Following our recent Nationwide Accountants’ Salary Report, we looked at how much Australian accountants earn compared to how much they should be earning, and the results showed a distinct gulf between the two.
This came down, largely, to two things: A low charge percentage and low hourly rate. Upon hearing this, many would simply suggest the solution is to “Work more efficiently and charge more for your time.” While this is one way to go about it, it’s often much easier said than done. Another optionis to reconsider your business model; the move to the value-based charging model has several key advantages, one of which is that – provided you can demonstrate value to your clients – you can significantly increase your charge rate, without having to necessarily work any harder.
Not only do you have more money coming in, you also have satisfied clients who are receiving a valuable service. What do you think? Is the value based model the way to go – or is there another answer?
