Recently I was asked this question: “Can a traditional accountant also be a modern accountant?” The person asking me this was what we might think of as an ‘old-school’ traditional accountant. But they liked to also think of themselves as modern.
I think they had seen an article that suggested that traditional and modern accountants are two very different animals. I’m not sure that’s entirely fair.
These days the implication is that a traditional accountant is one who focuses on promoting and providing basic compliance services to clients who want nothing more than the submission of their annual accounts and tax returns.
Traditional accountants migrated from pen and paper to calculators and then to spreadsheets. Many still believe clients expect them to know the answer to all financial and tax questions; they like to think they embody traditional ethical values and they often recall fondly the ‘good old days’ when they could build a working relationship with local Inspectors of Taxes. Traditional accountants probably still maintain time sheets and bill clients by reference to the time taken to service them.
In some respects you might therefore suggest that traditional accountants are living in the past. They have barely accepted the move to MTD and certainly are not embracing this major development.
On the other hand, modern accountants have moved with the times. Modern accountants may differ from their traditional counter-parts in a number of ways.
How modern are you?
- Do you work in a paperless office? [Saving the time and effort otherwise spent collating, keeping track and tidying papers]
- Do you rely on cloud based accounting and tax software? [Accessing real-time data]
- Do you encourage clients to use such software? [So you can deliver more timely service and advice]
- Do you accept digital signatures to approve engagement letters, accounts and tax return submissions? [Speedier and more convenient all round]
- Do you charge fixed or value based fees? [Recognising that clients typically want to pay for value vs time]
- Are you promoting the owner(s) of the practice rather than simply the practice name? [More people are choosing accountants because of an individual rather than by reference to a ‘brand’ or practice name]
- Can you confidently explain to clients why you need to seek input from an expert as some issues go beyond those topics on which you feel able to advise? [It’s more professional, as well as ‘modern’ to do this. For example you could choose from the specialist tax advisers on the Tax Advice Network]
- Have you updated your website in the last year or two [Old fashioned websites do not attract prospects and may even be a turn-off]
- Do you have at least one promotional video on your website? [Allowing prospects to ‘meet’ you before they get in touch]
- Do you rely on more software packages to run the firm and to provide additional services to clients than in previous years? [Evidencing a move into the future]
- Do you help clients to choose the right apps to supplement your preferred cloud bookkeeping package? [An additional value based service they need]
- Have you reviewed your support needs and chosen wisely – rather than only considering traditional employees [There are more attractive commercial options now]
- Do you regularly look to build and expand your key business skills rather than rely solely on keeping your technical knowledge up to date? [Crucial to be successful into the future]
- Do you no longer focus the promotion of your services on bookkeeping, accounts and tax returns? [As these will become increasingly cost-sensitive and less profitable]
- Are you determined to build an advisory-led practice? [More likely to form a sustainable model for future accountancy practices]
NB: Whilst I support this direction of movement, I also accept that it’s not the only way to be successful over the next few years.
Some people might see ‘modern’ accountants as those who are very active on social media. In reality I see very few accountants making a success of such activity. The main exceptions being those who use Linkedin strategically and those who are successfully reaching a specific demographic directly through facebook, instagram or pintrest. Other signs of being ‘modern’ (such as relying on a branded app) are rarely, of themselves, sufficient to ensure your practice will survive into the future.
As I noted in last week’s blog post, it’s now at least ten years since some commentators were talking about the imminent demise of compliance-led services. It was nonsense in 2009 and it’s nonsense now.
None of the hundreds of accountants I have worked with or spoken with in recent months are losing more than the odd client or two. None of them anticipate that many of their CURRENT clients will want any less help in the future than they do at the moment. As a result these accountants are continuing to promote their compliance services and anticipate doing so for many years in the future.
In many other respects however these ‘traditional’ accountants are quite modern and are embracing new technology, new systems and new ‘modern’ ways of operating.
How about you? How modern are you?