Finding, Minding, Binding, Grinding

It’s been a while since I referenced the key roles we tend to adopt in our firms. There are four essential such roles. Most firms need partners and team members with skills in each of these 4 areas.

  • Finders – who go out and find the new work
  • Minders – who look after the relationship with the clients
  • Binders – who keep the team working well together
  • Grinders – who do the work

It seems to me that most accountants focus on enhancing their technical knowledge and skills. Update courses tend to address such areas. Of course this is important. The focus though is simply on helping us to be effective or more effective in the ‘grinding’ role. What about all the others?

Sole practitioners will typically be good Grinders and Minders. If they have some staff they may need to be Binders too.

Those accountants who are looking to grow their practice need good ‘finding’ skills – perhaps in addition to the others.

What do you think about this analysis?

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Selling tax schemes is NOT a route to riches

I recently blogged about the 5 things accountants can do to make more profits. Selling tax schemes was not on the list. Why not?

Quite simply because the idea is vastly over rated, over hyped and mis-understood. (Typically by non-tax specialists).

There are plenty of people who will tell you that you can generate a good commission whenever you persuade a client to ‘invest’ in a structured tax avoidance scheme. They are right. Such schemes are (usually) legal and fully disclosed to HMRC. So what’s the problem?

Let’s start with the need, for most qualified accountants, to comply with their professional body’s fundamental ethical principles. These include acting with integrity, objectivity and professionalism. Clearly this means only advising on things you understand and being clear that the prospect of commission is not uppermost in your mind when advising clients.  Of itself this does not preclude you from advising clients to consider structured avoidance schemes. But it’s worth bearing in mind in the context of the following points:

  1. Encouraging a client to undertake a structured tax avoidance scheme is much like encouraging them to make a specific investment;
  2. It takes a fair amount of time to get to grips with all of the relevant details of a structured tax avoidance scheme;
  3. HMRC may announce a change in the law at any moment – leading to rushed (and perhaps botched) attempts to revise the scheme by the promoters;
  4. Having committed all that time to learning about the scheme there may be a temptation to persuade someone to ‘invest’ even if they might not otherwise choose to do so;
  5. If, some years later, the scheme is ultimately held not to work the client may sue the accountant for failing to adequately highlight the risks.
  6. Accountants should only promote such schemes if they are confident that they understand ALL of the risks and consequences for their clients;
  7. Accountants who promote such schemes honestly will find that typically only around one in ten clients will proceed once they understand all of the risks;

And it is this last point that explains the principle reason why I say that selling tax schemes is NOT a route to riches. Perhaps things were different ten years ago, before DOTAS, before the Courts adopted a more principled approach to legislative interpretation and before HMRC started to adopt such an aggressive response to tax avoidance schemes.

These days though there is plenty of evidence that when clients are fully appraised of the risks and downsides of schemes, they say things like:

“Now I understand it properly, why would I want to go into a scheme like that?”

And, just as I concluded a few years back, there is a limit as to how much you can charge a client in such circumstances for the time and effort involved in reviewing, checking and advising on the scheme – especially if the client decides not to proceed. This is one of the reasons that promoters pay high commissions. It is partly to compensate for all of the conversations and meetings that do NOT result in a client signing up for the scheme.

If you are focused on generating more profits there are many more productive ways to spend your time than learning enough about tax schemes to be able to promote and sell them to your clients.

I have written more extensively about the risks and downsides of tax avoidance schemes on the TaxBuzz blog.

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5 ways that Accountants can make more profits

There are essentially just five basic approaches to making more profits as an accountant in practice:

  1. Increase your charges – for doing the same work you have always done. This requires you to increase the perceived value of what you do
  2. Speed up collection of your fees and so reduce your capital requirements and interest costs
  3. Reduce the time you spend providing your services whilst keeping your fees the same as before. This allows you to take on more (profitable) work.
  4. Provide more value and charge more than you did before NB: this is not the same as simply ‘doing more work’ for existing clients
  5. Provide additional services and charge for these. Avoid preconceptions about what clients will pay.

There are also 2 supplementary things you can do:

  • Get existing (good) clients to introduce new prospects just like them
  • Sack the duff D-list clients who get in the way

You will appreciate that my focus here is on generating more profits rather than on increasing your top line, for example through adding new clients secured through advertising, marketing and networking.

In my talks on this subject I tend to focus on the first 5 points above although I also cover the 2 supplementary issues and some of the less costly methods of securing new clients and turnover. In so doing I share dozens of practical, commercial and easy to implement ideas that I know are being applied by other smaller practitioners.

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Why LinkedIn is more relevant to most accountants than twitter

I recently presented a session at Digita’s annual conference: “Should accountants explore or ignore twitter and other social media?”

As so often with my talks some of  the content was drawn from posts on his blog – and especially, on this occasion, the items flagged on the twitter page. I also went into more detail about LinkedIn than I have done before.

LinkedIn is probably the most widely used professional and business focused online networking website. I’m always amused when commentators lump it in with facebook and twitter and describe them all as ‘social’ networks.  I think this confuses people who are unfamiliar with them and assume that they are therefore very similar.  A more accurate collective noun is ‘online networks’.  (By the way, it can help to be think of the word ‘social’ as a guide to the form of interaction required on such networks. You will always be more successful if your approach is social rather then ANTI-social)

Back to LinkedIn, you can use it find people and to be found by other users including:

  • Old colleagues, business contacts, suppliers
  • Prospective clients, introducers, influencers

Recruiters use it too and maybe looking for someone like you. Equally you may be able to source a new senior recruit through your LinkedIn contacts. You could also find out more about newer clients and about key contacts at target clients before you approach them. Maybe someone you know, already knows them and could effect an introduction?  The facility to do this in a professional way is is one of LinkedIn’s key distinguishing factors.

In August 2009 I searched LinkedIn to find out how many accountants in GB had registered on the network. The answer was just over 26,000. That figure is now closer to 38,000 and is growing daily.

I would stress that those figures include management accountants and chief accountants in industry and commerce – it’s not just accountants in practice!

LinkedIn seems to be used mostly by recruiters and business people who are not active on the more social online networking sites such as ecademy, facebook and twitter. To my mind that’s good as I don’t need more places to network with the same people but new places to network with new people.

LInkedIn has the potential to be a more intimate way of networking than simply exchanging business cards with a stranger when attending networking event, conferences or exhibitions.  I recently attended a social party, met an interim FD and remembered his name. The next day I looked him up on Linkedin and connected with him. Such a facility allows us to maintain a wider network of contacts that has ever been possible in the past.

In a previous post:  If you’re not on Facebook you need to be on LinkedIn I set out, in more detail, some of the reasons for registering an account on LinkedIn.  This is the minimum I would encourage you to do. Most of the real benefits of being registered on LinkedIn require you to have more than a simple profile, but it is at least a start!

Please share your own views and experiences of LinkedIn below.

Related ebook: Specifically for accountants who want to better understand Linkedin and how you use it passively or actively. Click here for full details>>>

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