20 tips re Linkedin for accountancy firms – vs individual accountants

I once wrote a Handbook on using Linkedin for a larger company that has many such handbooks recording their processes and systems.

It was a fascinating experience. In researching available Linkedin advice and tips I found very little that was aimed at or relevant to business owners. The same is true for accountancy firms that need to advise and guide their staff on how to use Linkedin – from a ‘corporate’ perspective. And any such generic advice that does exist still needs to be tailored to the practice concerned.

There is plenty of guidance out there for one-man bands, for consultants and for job hunters. A lot of this focuses on how to optimise your Linkedin profile so that you will be found, be attractive and be contacted.  Much of this advice is good in itself but it’s incomplete.

If you are responsible for a firm you need to consider a range of other issues including:

  1. How the firm should be described on Linkedin and on each employee/partner’s profiles?
  2. How the firm should be described on it’s own Company page on Linkedin – and who should be able to edit this?
  3. Whether to encourage a degree of consistency as regards references to the firm and to specific departments on everyone’s profiles?
  4. What guidance to provide re links from personal profiles to the firm’s website, specific pages and blogs thereon and the use of business or personal email addresses on Linkedin profiles?
  5. Whether to provide more extensive guidance as to the creation of professional profiles on Linkedin? (Do less than professional profiles reflect badly on the firm?)
  6. Whether to provide any guidance or training on professional uses and abuses of Linkedin?
  7. Whether to encourage use of Linkedin for lead generation purposes and what training to provide to facilitate this?
  8. Whether to encourage use of Linkedin to help raise awareness of the name of your practice and how best to co-ordinate this?
  9. What guidance to provide re staff who may want to connect with current, past and prospective clients and referers?
  10. How much ‘best practice’ guidance to share to help users to gain maximum benefit for the firm from their use of Linkedin?
  11. Whether to provide guidance or set policies re the provision of ‘recommendations’ for current staff, ex-staff, clients, collaborators and suppliers?
  12. Whether to provide guidance or set policies re the extent to which profiles can appear to be full online CVs?
  13. Whether to co-ordinate the involvement of users in different Linkedin groups and to collate and share lessons learned?
  14. Whether to set up one or more groups for clients of the firm, what settings and templates to choose and who should manage these?
  15. How can clients be best engaged and encouraged to see the benefits of involvement in groups established for their benefit?
  16. Whether to establish groups focused around key service areas, what settings and templates to choose for such groups and who to invite to join these?
  17. Whether to encourage current and past staff and partners to join an alumni group – and who will ‘manage’ this?
  18. Whether to encourage the use of status updates for specific purposes or to allow these to be completely personal and random?
  19. Whether to encourage or discourage the seeking of and publication of recommendations from clients and ex-clients?
  20. Whether to provide guidance as to the time that can or should be spent on Linkedin each working day/week?

I hope that gets you thinking. The list is by no means complete. What else do you think might figure in your firm’s Linkedin handbook?

PS: I have written a 10,000+ word book specifically for accountants who want to use Linkedin – either actively or passively. Click here for full details>>>

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Is a ‘me too’ Budget summary worth sending to anyone?

Last year I awarded a (notional) prize for what I considered to be the  best Budget night ‘commentary’ that I saw the following day.  The winner, and runner-up to a lesser extent, stood out among the dozens of ‘me too’ pieces that were, frankly, not worth anyone’s time and effort.

Many years ago the Chancellor’s March Budget heralded tax changes that would take effect from the following 6 April. In those days there was a real client service need to summarise the Chancellor’s announcements, what they would mean in practice and what action clients might need to take as a result.

That was then. This is now. Few tax changes take immediate effect any more, other than the closure of fancy tax loopholes. And when that happens more detailed analysis is required than will ever appear in a Budget commentary. Also long gone are the days when the Budget Night press releases contained sufficient detail to enable accountants to say something constructive. Now we have to wait for subsequent announcements that appear long after the Budget newsletter was published. And most of the next tax year’s rates and allowances were announced a few months back – as has become the way for some time now.

But still many firms produce their own summaries or buy in a commercially produced ‘overnight’ Budget commentary to send out to their clients. I’ve heard the arguments for this. “Clients expect to get one from us.” “They get one from every other accountant in the town.” “They like them” (really?). To my mind there are plenty of better ways for accountants to distinguish themselves from the competition and to provide real client service. These standard Budget emails, newsletters and booklets are of very little value and rarely contain anything more than appears in the daily paper or in generic news (or even tax news) email updates. And they have little in the way of ongoing value.

So why the awards last year? Quite simply because the winner’s approach was distinctive and better than all of the standard stuff that I received from dozens of accountants around the UK.  Elaine Clark of CheapAccounting.co.uk published ‘Not a Budget newsletter‘. It was client focused and recognised the fact that there was next to nothing of immediate impact in the Budget itself.

This year Elaine has already published her summary of the key tax data that the media will only think to announce after the Budget – despite the fact that the information was announced long ago.

I announced a runner-up award last year for informanagement as they had at least divided up the announcements:

  • Budget Summary March 2011 – New tax changes announced today
  • Budget Summary March 2011 – Future changes announced today
  • Budget Summary March 2011 – Changes previously announced for 2011-12, now confirmed

So here is a challenge for readers of my musings and blogs. If you can avoid a ‘me too’ attempt and you adopt a different, client centred approach this year, please let me know. If I agree I will give you the 2012 award (which simply means you get a mention on my blog and a link through to your website).

Of course if you want to argue the case for ‘me too’ summaries I’d also love to hear form you via the comments facility below.

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The January tax return rush is your own fault

Chatting with an accountant recently he told me he was amazed why so many clients leave their tax returns to the last minute.  He told me he chases clients throughout the year. He sends reminders and prompts. He has recently asked around his business networks to clarify why small business owners and investors do this. It became clear that there are typically 3 reasons:

  • They find the collation of their papers boring
  • They have more important things to do
  • It’s not a priority until the filing deadline is looming

My friend was frustrated by these replies but also satisfied. It’s not just his clients and it’s nothing to do with him.  All accountants struggle to cope with the January tax return rush but at least now he knows why.

WHAT ROT!

There is only one reason for the January tax return rush and, I’m sorry to say but it is entirely the accountant’s own fault. I’ve been saying this in talks for years and offering solutions on how to overcome the issue.

Quite simply your clients leave things to the last minute because you let them do so.  Yes you do. And, yes, YOU could change things. There are three main ways to do this:

  1. Reference an earlier deadline and stop drawing your clients’ attention to the 31 January filing deadline. YOUR deadline is (say) 31 October. Treat it seriously and be as forceful around YOUR deadline as you have previously been re HMRC’s deadline.
  2. Establish a stepped fee structure whereby clients have to pay higher fees the later they produce the information to enable you to complete their tax returns. And stick to it.

What do you think the third option is?

Related posts:

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3 categories of time to track – not just chargeable time

I was surprised recently to see a firm of accountants being applauded for the fact that partners were given goals regarding client time. This is hardly newsworthy. Then I read more closely. The partners in this firm are measured in terms of three categories of time:

  1. chargeable time (as has long been the case in many larger firms);
  2. contact time with their clients in a relationship management capacity (with a view to scoping ABOs – Additional Billing Opportunities); and
  3. time spent with prospective clients.

The most significant issue here was that the category three time was rated as important as chargeable time. This is worthy of applause, although it is open to abuse if not carefully managed. That though is indeed a management issue. It is absolutely right to record and measure the time. To consider the  LONG TERM impact of attending a regular networking group and comparing this with more generic and random networking events. In both cases it’s important to also spend time and track the time spent on follow up 1-2-1 meetings with prospects and referrers. Focusing on short-term results is to misunderstand the way that business networking and referral marketing work.

Long time readers of this blog may recall a post I wrote 3 years ago: Are accountants as ‘stupid’ as lawyers? In it I repeated a David Maister story that is relevant here. David noted that there is general agreement amongst lawyers (and most other people too) that it is generally easier to win more work from existing clients than it is to get engaged to provide services to strangers (new clients). “Why then,” he asks, “do we risk upsetting clients by treating all the time we spend with them as potentially billable? And why do we only consider ‘billable’ time to be of value”

I would put it this way:

A firm will encourage and motivate the partners to devote time to those activities that they believe are being recorded and measured and rewarded. I stressed the importance of looking beyond fees billed in my 2006 blog post: Fees, fees, fees.

In the traditional model all the focus was on ‘billable time’. More sophisticated models take account of how much of such time is actually billed.  This then requires careful monitoring to ensure that write-offs are fairly allocated to the partner’s time costs vs that of their teams or of specialists who have been working on the same clients.

When I was at Touche Ross (now Deloitte) many years ago they already had a time recording system that allowed client time to be recorded ‘below the line’. This was the category two time above and quite forward thinking for the 1980s.

Almost thirty years later, how many firms track and monitor category two or category three time? Do you think they should?

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Avoid this mistake when a client disputes your fee note

We’ve all had them. The client who sends a detailed letter/email listing a load of issues and problems.  Sadly I can recall having the odd one or two such missives when I was in practice.

I remember the feeling of indignation. The frustration at the unfairness of the accusations. The unreasonableness of the assertions and the one-sided nature of the complaint which totally ignored anyone’s perspective other than that of the client.

Yes, I know. The client is always right. Except they’re not. Sometimes they’re wrong, mistaken or liars.

I recall one occasion over ten years ago when I received a detailed list of issues from a client in response to the invoice issued by my tax manager. I went through the list and made a few notes. I gave these and the client’s letter to the tax manager to comment on. We crafted a point by point response. We were satisfied we had addressed all the points thoroughly and fairly. We sent our letter. This had the inevitable consequence.

We got another letter. With the benefit of hindsight I suspect the client was playing with us and playing for time. I don’t remember if there was another exchange of letters or not, but I do recall a meeting where we went through things line by line again.  Eventually the fee was paid and the final amount was not much different to the original bill.

I had made a fundamental mistake in replying to the complaint letter point by point.

What I should have done was to pick up the phone, apologise for any misunderstandings and ask what the client wanted. And then deliver that or discuss it in order to reach a fair result as quickly as possible.

Few clients WANT a line by line, point by point response to their letter of complaint. Your detailed reply simply invites another round of the same game. Perhaps the client is simply trying to buy some time before they will pay you in full, maybe they just want a small reduction in the fee or a change in the personnel dealing with their affairs. Maybe they want a big reduction in the fee. Maybe they are going to be so unreasonable that YOU should decide you don’t want them as a client any more.

Far better to reach one or other of those outcomes asap and get paid what you’re going to get paid asap. Don’t you agree?

Related posts:

7 steps to resolving client complaints

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Accountants ‘just do the accounts and tax returns’

Today I quote selectively from the blog of one of the members of my Tax Advice Network, Jon Stow. I’ve added a few words of commentary of my own.

Most business owners will tell you what they think their accountants do: they prepare the accounts and do the tax return. They probably think of this as pretty much a process. There are two misunderstandings implicit in that sort of thinking; the first is there is a sort of sausage machine at work and that you put in the figures and get a certain result, and the second is that there is no room for manoeuvre.

How would your clients describe the services you provide?  Is it just preparation of accounts and tax? In most cases the answer is ‘yes’ although you may have a few clients where you focus on helping them to build their business. Is this because you have agreed additional fees for doing this or simply because they haven’t screwed your basic fees down and you feel you can afford to spend more time with them?

What business owners should expect from their accountants is not just the “doing”. Business owners should expect from their accountants some thinking in terms of the tax side of things. Most accountants will deliver this. Those that fail to do the thinking may be the larger firms who will use their junior staff to cut their teeth on “smaller” companies and who do not have the experience to think. Sometimes the very small firms are rushed off their feet to do all the accountancy work and are not able to think properly about the tax process beyond doing basic tax calculations.

This latter point being one of the reasons that so many firms sub-contract tax advice to independent tax advisers, like those who are members of the Tax Advice Network.  Members can help on ad-hoc matters or provide tax clinics and visit your office on a regular basis. Better you engage them than you leave your clients to source specialist tax advice that they assume is beyond you as you ‘just do the accounts and tax returns’.

Like this post? You can now obtain my ebook containing loads of valuable insights, short-cuts, tips and advice for accountants who want to STANDOUT and speed up their success. You can buy the book or download a summary for free here>>>

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How to boost the tax capability of a general practice

Every now and then I hear about general practice firms of accountants which have determined that they want to provide a higher level of tax service to their existing clients. This is often the case in more forward thinking practices where the partners recognise that they are limited in their own abilities and that they need someone else to check out their files for tax planning opportunities, to put tax advice in writing and to attend meetings with clients to provide a more tax focused service.

Provide tax schemes?
Boosting the firm’s tax capability can be a worthy objective although sometimes it’s a euphemism for offering tax schemes and products. I addressed this issue in a recent blog post: Selling tax schemes is NOT a route to riches.  If the partners do not understand this they WILL be disappointed.

Tax manager
Some firms recruit a tax ‘manager’ in the hope that he or she will fill the gap. And if the firm is lucky this may well happen. I always wonder however in such cases – How do the partners know that the tax specialist’s advice is correct? If there is no one else in the firm with the requisite expertise, this is a big risk, especially with a relatively inexperienced tax ‘manager’. Often they may feel under pressure to impress their new partners – especially if the carrot of ‘partnership’ depends on the partners’ perception of their performance. Again I addressed this in a recent post: Confidence is good – but not if it’s naive or deceitful.

If the new recruit causes a problem – which will often only become apparent down the line – either the partners will have to bear the loss or their PI policy will suffer a claim.

New recruits are also an expensive option. Over and above the recruitment costs and induction time it can be a while before they start to pay their way.

Merge with or takeover a tax only practice
I was asked my views about this possibility recently. I suspect it’s a dream that will rarely be realised. Tax only practices are generally set up specifically to avoid the distractions of providing accounting and auditing type services. Why would a successful tax practice want to merge with a general practice firm of accountants?

If such a merger or takeover occurs the tax specialists are likely to want to reduce the risks to the practice of general practice partners providing tax advice without it first being ‘checked’. This will often give rise to conflicts as the general practice partners are not used to having their advice double checked or to being constrained as to what they can advise on.

Merge or takeover a one-man band tax specialist
This idea suffers from much the same downsides as have already been mentioned. It can be worse however as there is the added risk of the individual retiring, dying, going sick or leaving shortly afterwards. Although such risks may be considered small the prospect of one of these may have been the prime motivation for the tax specialist agreeing to the deal.

The partnership will want to limit the upfront costs of recruiting a tax partner by requiring that the new person has a following. However very few tax specialists with a following would feel comfortable taking their clients into an environment that has not previously provided clients with specialist tax advice.

If the tax specialist or partner does join the firm their focus will be on their existing clients. What will motivate the specialist to make time to explore opportunities to provide tax advice to the firm’s existing clients?

Tax contractor support
In my view this is the best solution – at least as a first step towards building in-house tax expertise.

It will often be easy to identify someone who has the requisite expertise and is available to help out on a part-time basis. They remain self employed and provide their services to the firm on a contract basis, perhaps one day a week for a few months.  This option is also more cost effective for the general practice firm as they bear no employment related costs. In the event that any problems arise the relationship can be terminated quite quickly and any claims made will be against the contractors’ PI policy.

It may be that more then one such specialist can be identified – perhaps one to focus on IHT issues, one on VAT and one on corporate tax matters. (There are many other such topics too of course).

Multiple adviser tax support
Whichever route a firm follows they should appreciate that, these days, hardly any tax adviser can cover off and advise on all tax matters. If you have just one or two in-house  senior tax specialists, you should expect them to want to seek confirmation or support from a third-party ever now and then.

Tax Advice Network
This supportive network provides over 2,500 accountants with access to dozens of  vetted independent specialist tax advisers across the UK.  These tax advisers are categorised by their areas of expertise and location.

You can contact any of them for specific,  general or tax contractor support as described above.  And yes, as implied above, much of the time these independent tax advisers are providing second opinions and support to the tax specialist managers and partners in firms, as well as to general practice partners.

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What impact does new software have on staff costs?

The increased use of accounting and tax software has had an unexpected impact on at least one accountancy firm. And I suspect there are others in the same position.

The firm had assumed that they would reduce staff costs through increased use of junior staff.  The partners anticipated that using more sophisticated tax software would allow them to reduce salary costs as it would require less able and qualified staff than previously. In practice the firm has less need of unskilled staff. The software itself takes the drudgery out of the work and enables staff to focus more on value added and advisory services for clients.

Staff numbers are down – as one might expect. But staff costs are up as the firm is able to make better use of more qualified staff.

What’s been your experience?

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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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How to avoid giving free advice to prospects

I’m reminded of the old sex education message: Just say ‘no’!

As professional advisers we are all used to prospective clients seeking free advice. As I’m no longer in practice and as a frequent blogger I have very different perspective now. So here is some free advice from me.  When a stranger/prospect calls you need to set clear parameters. Why give any free advice?

I think the most common reason accountants give themselves is that it helps evidence their credibility, style, approach, knowledge and willingness to help clients.  In reality it is only the accountant themselves who doubts their ability and knowledge. The prospect generally takes all that for granted – after all our adverts or website makes clear we’re an accountant. All accountants know everything don’t they? We know this isn’t the case but prospects assume it is so.  Even more so if theye have been recommended or referred by a third party.

So accountants are generally proving nothing by giving free advice. They can evidence the other key qualities they want to exhibit without giving free technical advice.

I also tend to think that a side benefit of the Anti-Money Laundering (AML) legislation is that it gives accountants a statutory justification for any apparent reluctance to provide answers to technical questions before engaging a new client.  “I’m really sorry Mr Prospect but as a professional adviser I’m precluded by law from giving any advice before we’ve been through the anti-money laundering checks. I know it’s a pain but it’s the law.” The consequence of this will often be that you have engaged the client and secured their agreement to your preferred billing procedures before you give them any valuable advice. So the AML laws do have an upside after all!

Finally I would suggest you establish a process to qualify a prospect or to let them go elsewhere before you waste too much time on them. Initially you may want to qualify out time wasters on the phone. You will also want to determine what you need to cover in an initial meeting.

In many of my seminars I ask accountants if they offer a free initial meeting to prospective clients. Typically the answer is ‘yes’. “How long do you allow for such meetings?” Some put a cap on it. Others say ‘as long as it takes’. I ask the question – “As long as WHAT takes?” It’s not just about getting the prospect to want to appoint you. You need to find out quite early on if they can afford to pay the fees you would want to earn. You also need to determine if this is the sort of person you want to have a client.

Bottom line, I’d suggest you establish a process/checklist (that you will in time commit to memory) to use when you receive such calls in future and indeed when you have an initial meeting with a prospect.

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