Do you offer a service guarantee? I bet you do.

Let’s be realistic. If you did some work for a client but they weren’t happy because you made a big mess of it, would you insist on charging them extra to correct your mistake?

I hope you wouldn’t even consider trying to charge extra to resolve a mistake of your own making.  To my mind this is the start of a service guarantee. And it’s the sort of thing, which, if promised up front, can help generate confidence from prospective clients.

Over the years I’ve often seen references to service guarantees on an increasing number of professional service provider’s websites. I came across one last week and established that it wasn’t unique to the firm in question; Just put yourself in the shoes of a prospective client and consider how effective is the message below. It’s listed on some accountancy firms’ websites as one of the answers to the question ‘Why us?’

Our 100% Risk Free Guarantee…Use our services to help you pay less tax and increase wealth, completely at our risk. Our services are so outstanding there’s a 100% Risk Free Guarantee.

Here it is…

If at any time you are not completely happy withglobal-unlock-guarantee our work please discuss it with us. If we really can’t sort the issue for you then don’t pay for the part you’re not happy with. Ask for it at any time within 30 days of the work and we won’t expect payment. That means…

No small print;

No quibbles;

No questions asked;

No exceptions;

No strings

I think this is very cleverly worded and does put some (but not a lot) of responsibility on the accountant to achieve absolute clarity as regards the services to be provided up front.

How would you feel if a prospective client asked if you were as confident as this in your work? Or why should they choose you over another accountant that offers such a guarantee?

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Why your clients are indifferent and don’t recommend you

Many accountants claim that they secure much of their new work through word of mouth referrals. This suggests that clients are making positive comments about their accountants. They may do that if they’re particularly happy but in the same way any unhappy clients will be quick to complain about their accountants.

I’ve heard a large number of people talking about their accountants in recent years and it’s fair to categorise those views as good, bad, or most often – indifferent. Well at least it’s not ugly!

Good

This seems to imply that things couldn’t be better. Clients believe that their accountant does what they want, when they want it and for a fee that they consider to be good value for money. The client feels that they get pro-active advice and are very happy to recommend their accountant to friends and family.

Bad

Clients feel that they’re putting up with bad service, high fees and/or get little of value. They certainly wouldn’t recommend anyone they know to use the accountant.

Indifferent

This is how I describe those clients who think their adviser is ‘okay’. This might be because the accountant doesn’t wow the clients with great service nor do they feel that the accountant is charging excessive fees.

Sadly it seems to me that a high proportion of people think their accountant is just ‘okay’. The fact that they haven’t complained doesn’t mean we can assume that they think their accountant is ‘good’. It also means that the client is more at risk of moving to a new pro-active accountant than we might assume.

‘My accountant is great’

When I saw this comment on a business forum I asked the person concerned what made them say that? Here’s the reply:

“He keeps things very straightforward in his explanations not that I have any particularly complex matters to deal with but he acts quickly, keeps costs to a reasonable amount (not cheap but sufficient value), makes himself available as and when needed and I get comfort from the fact that he has a successful practice, nice small modern offices and polite and helpful staff. When I have required explanations re: overseas investments, capital gains tax, what I can put against tax to minimise it legally, he delivers his knowledge in an easy to assimilate manner”.

I think that’s about it in a nutshell. Of course different clients want different things from their accountants. And different elements of your service and style will appeal to different clients.

If your clients are getting the service and attention  they want from you at a price they’re happy to pay then they MIGHT be expressing a positive view. They’ll only do so when asked though. Are you consciously doing anything to ensure that your clients see you as good, rather than bad, or do you risk them being indifferent?

It’s only if your clients think you’re good that they’ll be saying positive things about you. And if you rely on word of mouth referrals for new clients, you may find that we are moving into an age when you need a more active approach to encouraging these.

What do you do to actively encourage positive word of mouth referrals?

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What’s your angle?

Too many accountants struggle to distinguish themselves from their competition. This is a shame as it is what makes each of us different that makes us memorable and the reason why clients engage us.

Challenge this if you must. Tell me that no one cares about anything other than price.

If that’s what you believe then I’m sorry for you. It’s a fallacy promoted by those who choose to sell stuff at low prices. It’s not true for Apple, for the makers of quality cars, handbags or designer clothes. Nor is it true for EVERYONE seeking professional advice, tax advice or day to day compliance services.

Of course price is all that matters to SOME people. Personally though I’m happy for those people to choose someone other than me to provide the service they seek. Typically those who only want to pay a low fee do not become valued clients; they are often more trouble to deal with and getting paid is rarely easy either.

So, let’s get back to the point. Do you really feel that you are no different from hundreds of other accountants? If that’s what YOU feel then it’s no wonder that prospective clients think the same and may choose to go elsewhere.

When you talk about what you do for clients, do you sound the same as everyone else? If so, you are missing a trick. The same goes for your website, online profiles and any physical marketing materials you use.

What do you add beyond the basics? It’s the differences that matter and that make it worth while someone choosing to engage you rather than the accountant down the road. What’s your angle? Often it’s your point of view that makes you unique and can help you to STAND OUT from your competitors. If you haven’t formulated any strong opinions on work related topics you may struggle to convince prospective clients why they will get a better service from you than from others. Just be careful to ensure that your views are based on informed facts rather than a naive acceptance of biased comment in the media.

Think back to the most common questions you are asked by prospective clients. Do you have a unique take that might resonate with them and help them to recognise that you’re the sort of professional they want to engage?

What’s your angle?

 

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What do clients pay you for?

Are you one of those accountants in practice, who still charges fees by reference to the time you spend working on a client’s affairs?

Even if you have moved to fixed pricing, menu pricing or value pricing you may still complete timesheets to show how much of your day has been devoted to each different client.

Thinking back to when I was in practice it was many years before I realised that a timesheet may have uses as a management tool but that it did not ‘prove’ how much time had been spent doing anything. It was a guide, nothing more.

After I left practice in 2006 I continued running training courses (very different to the talks I give now) and I asked accountants what they would bill in a variety of situations. The varied answers proved that the timesheet was simply a guide and that the ‘time costs’ that it reveals are rarely the same as the fees billed (or that could be billed).

A quick search online reveals that many accountants websites still assert that “Accountants sell time”. What nonsense. This is a sad misconception. It’s based on a misunderstanding and it’s misleading. Some accountants may try to determine SOME OF their fees by reference to time. They may try to charge fees by reference to their time records but TIME is not generally what accountants sell. If it were then the corollary would be that TIME is what people who want an accountant set out to buy. And they don’t.

In my view accountants sell (or should focus on selling) Trust, Confidence and Peace of Mind. These are 3 of the key qualities, if not THE 3 key qualities, that clients seek when they want to appoint an accountant. If prospective clients do not quickly trust you, have confidence that you will do the necessary, and gain peace of mind that they can rely on you, you will not keep them as clients; indeed they may not appoint you in the first place.

Yes they may have more specific needs – such as to prepare accounts, complete tax returns or resolve issues with HMRC. They don’t really care how long it takes you to provide your services. They just want things done. What do you think clients pay you for?

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Is it better to have lots of small clients or a smaller number of larger clients?

The question I was recently asked by an accountant was actually: “Is it better to have 500 small clients paying me £500 pa or 50 larger clients paying £5,000 pa?”

A little background from the accountant concerned:

“The reason behind this question is that I have been running my practise for many years looking after clients that perhaps most others accountants wouldn’t entertain. However, these small clients are always polite and pay on time even though they can be quite messy i.e. Shoe box or carrier bag type book keeping. But I do enjoy preparing their VAT, payroll and accounts, and they are always appreciative. I also have a few much larger clients where fees are £3k – £5K but find these clients are typically very demanding and often impose strict deadlines for when their work needs to be delivered. They rarely say thank you, even when we deliver before the deadline.”

My reply picked up on the following:

The answer as to what type of practice is best depends on a number of factors including:
  • what work do you enjoy?
  • what client base do you currently have?
  • how easy do you find it to win new clients (and what type of clients)?
  • how much effort do you want to put into winning new clients?
  • where do you want your practice to be in a few years time (taking account of regulatory changes and your own plans)?
  • how do you want to make your money?

You also need to consider where and how you will find the larger new clients. Inevitably they are tougher to win than are the smaller and less demanding clients. Some accountants are happy to only go for the larger fees. Others prefer to take on up all-comers – some of whom may grow into larger clients in the future. You need a very different strategy to win larger clients than smaller ones; also different marketing messages and a different approach to sales. It suits some people, but not everyone.

I do not believe there is one perfect solution that is ‘best’ across the board. The grass often seems greener on the other side.  At meetings of The Inner Circle for Accountants the members often note that they each run their practices in different ways and that no one approach is perfect.

One member said his practice is on course to reach: 5 clients paying £25k pa and ten clients paying £5k pa.  He says he won’t take on a new client that pays less than £3,000 for recurring compliance work. And he doesn’t do any bookkeeping for clients.
Most other members have much lower average fees and minimum annual fees ranging from £250 to £1,600. Some want to grow their average site here. Others want to grow their numbers and like to play the volume game, passing over any extra advisory work to specialists. That way the accountant can just focus on doing what he does best.

 

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Why I sacked a large firm of accountants

The purpose of sharing what follows is the lessons that I hope become apparent. I have no desire to embarrass anyone so I am not identifying the client, the firm or the partner concerned. That’s not the point.

Background

Last year I took over responsibility, on a voluntary basis, for the finances of a members’ club that had long been audited by a top 20 firm. I called the audit partner for a chat and to mention that we would no longer require an audit. Turnover was less than £250k and the bulk of income and expenditure arose from mutual trading. I explained that I had engaged a bookkeeper – my predecessors having done the bookkeeping themselves. All the bookkeeping is maintained on Xero.

We agreed that an independent examination of the accounts, to be drafted by the bookkeeper, would suffice.  That was February. Our accounting date was 31 March.  The partner said that a manager would liaise with me over the timing of the work.

The service

An audit manager got in touch, but not until June, and agreed to send a fee quote, which he did. It was lower than previous audit fees and I assumed it covered all of the services to be provided for the year.

To give the firm credit, everyone who communicated with me and the bookkeeper was efficient, polite and professional. However I never once received a phone call from anyone. Not once. I simply cannot accept that this is best practice.

I find it bizarre that an accountancy practice (whatever the size) can service a client paying the firm many thousands of pounds each year without someone actually talking to their key contact at least once during the annual process. Even more so given that I was new in role.

My conclusion was, as I had anticipated at the outset, that the job was too small for the firm and that perhaps they had been waiting for us to sack them. I have no idea what paperwork is on their files re the accounts review etc but it felt as though they simply went through the process without considering the impact on us as their client. They had a few queries but proposed no changes to the draft accounts prepared by the bookkeeper.

In the event the work involved in preparing our accounts will have taken much less time than in previous years as our new bookkeeper did much of the accounts prep work.

The tax

Someone from the tax department emailed me in November to remind me of filing deadlines and to ask if I wanted them to do their work as usual. I agreed and realised only then that that the fee quotes, supplied in the summer, excluded any ref to the tax work (suggesting the traditional lack of communication between departments that I recall from my own days in practice). No one confirmed what they would do on the tax side. I was pleased however that the tax team seemed on the ball and took responsibility for getting things done.

Remember the client here is a mutual trading body with many annual recurring sources of income. I was surprised therefore to receive a number of queries from the tax team as to the taxability or otherwise of income sources. I suggested that their files or colleagues should be able to confirm which sources were taxable etc. I had my own views too of course.

The club had been client of the firm for many, many years, so it struck me as odd that the tax team were asking basic questions as if new to the affairs of the client. They were otherwise efficient and helpful so I paid the tax fees without query. However no one spoke with me or quoted for the tax fees which were simply charged without any explanation at all.

The upshot

It transpires that the 2014 accounts contained an under accrual for the audit firm’s fees for the year. Whilst they were not auditing the figures I would have hoped that they would have ensured we were adequately accruing for their full charges. Our draft figures for the year to 31 March 2015 therefore have to reflect last year’s under-accrual. Had this been correctly accrued our results would not be swinging from a surplus last year to a deficit this year.

As a side issue I also noted that postal communications from the firm’s accounts and marketing department, more than a year after I took over, continue to be addressed to my predecessor.

All in all the firm did little to cover itself in glory.

The switch

I made the decision to recommend that we replace the firm earlier this year, but thought I would wait to see when they would get in touch to plan the work for our accounts to 31 March 2015. They didn’t.

A few weeks ago I briefed 3 possible replacement firms, all of whom have since submitted fee quotes in the region of half what we paid last year. Two of the firms are in the top 20. One is in the top 30.

I sent an email last week to the old audit partner explaining much of the above. The response I received simply said:

Thank you for your email.
I am sorry to hear that you were not happy with the service you received.
We await your further information regarding our selected replacement.

The questions

Does any of what I experienced surprise you? Do you think I am being too harsh or had unreasonable expectations? I’d love to know.

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Resolving issues with problem clients

This was the main topic for discussion at last month’s meeting of The Inner Circle for Accountants.

Once again Members of <a href="http://www this hyperlink.bookmarklee.co.uk/inner-circle” target=”_blank”>The Inner Circle benefited from the willingness they all had to share their experiences and insights during our round table discussion. In accordance with one of our key membership principles everyone agreed to abide by the Chatham House Rule.

As usual I have prepared a follow up summary including members’ selected key learning points and some useful links.

What follows are simply some of the opening comments that set the scene for our round-table discussion. We started by considering the various issues that contribute to problem clients:

  • Lateness – supply of info, payment of fees
  • Rudeness – to you, colleagues, contractors, staff
  • Unreasonable demands/expectations
  • Tried to do it themselves
  • Quibblers – overly price conscious
  • Fudgers – over claiming and under disclosing
  • Time vampires – be this the client or their in-house accounts staff
  • Needy, sad and poor
  • Those who no longer fit your ideal client profile (if they ever did)

Possible solutions varied from those requiring courage to those that could generate more income even if the problem client took their business elsewhere. Members were amused but unsurprised to hear how they all had similar problem clients. The real benefit of the meeting came from the round table discussion and ideas as to how to resolve specific situations.

The Inner Circle is for the owners of smaller accountancy practices who are keen to be more successful without spending a fortune on marketing and branding. To find out more just click the link>>>

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10 shocking mistakes that frustrate your clients

During my annual networking ski trip I asked a number of my fellow entrepreneurs and business owners to talk to me about their accountants. I have since written 3 articles for AccountingWeb by reference to the notes of those conversations.The first article has been published and has already stimulated much online discussion.

By way of summary and especially if you don’t have time to read the whole thing I have summarised below the 10 mistakes which were identified as frustrating by my interviewees:

  1. Working too close to deadlines – regardless of when clients supply their information;
  2. Charging differing (time based) fees each year even when the work done is substantially the same;
  3. Failing to offer business focused advice to business clients;
  4. Taking an unreasonable amount of time to respond to client enquiries and to follow up after meetings with them;
  5. Refusing to provide regular advice sought by clients;
  6. Omitting to provide the most basic piece of advice sought by clients as it’s not embedded in the accountant’s standard procedures;
  7. Delegating work to junior staff who cannot communicate effectively with clients;
  8. Failing to make the client feel that their views and desires are important;
  9. Taking on a client even though it will become obvious the accountant has no relevant experience of that business sector and is unwilling to close the gap;
  10. An absence of processes such that client feels the accountant is disorganised and making it all up as they go along.

When these sort of issues come up during mentoring conversations I stress that what matters is the client’s perception, as their perception is their reality.

The skill comes in learning how to help clients to recognise that you are doing your best to help them, that you’re on their side, and that you understand and want to help them succeed in their business.

The language you use in conversations, emails and forms/checklists all contribute to your clients’ perceptions. How confident are you that your clients aren’t harbouring unspoken frustrations that could mean they are ready to move to a new adviser any day now?

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