5 things the most successful accounting firms are doing to lap their competition on the track
Last month Edi and I had the good fortune of attending the Growth and Strategy Forum presented by Rick Telberg when it came through San Francisco on the 24th. At the end of a day packed with powerful conversation, one thing was clear. The profession is changing. Those who change with it have a tremendous opportunity ahead of them. Those who do not, can anticipate a very steady decline in their business over the next decade. The gap between the winners and the losers in the accounting profession is widening by the day because of choices that firm partners and consumers are making RIGHT NOW.
There are 5 particular characteristics and activities that run as a common thread through the best of the best firms across the United States. According to Michael Platt, Principal of The Platt Group who is responsible for such publications as Inside Public Accounting and AccountingWeb, these are the five things that todays’ most successful firms are doing to leave their competition in the dust…
It’s no secret that many firms today have challenges with succession planning. There are 3 things happening…
1. As a result of the stock market volatility over the past several years, many partners are electing to postpone retirement. This is having a dramatic impact on what juniors thought their career paths would be. Many are switching firms or careers because of it. 2. The traditional model in most firms has always been built around the mentality that you “Eat what you kill”. Patrick Lencioni wrote a great book on the subject, “Silos, Politics & Turf Wars”. (Insert Lencioni Amazon Link) Veterans of the profession look at their book of business as their retirement plan and as a result, never built a team to take over. Click here to listen to an interview with Michael Platt
3. When this new generation of CPA’s look at the old definition of a partner they’re saying, “No. Thank you.” Firms that want to stay around a while need to be making room for a completely new approach to what partner behaviors look like and how partners add value. Most are too busy ignoring the problem secretly hoping another firm will buy them out. If that’s your plan, you better cross your fingers and hope your clients are worth a buy-out.Click here to listen to an interview with Michael Platt
The firms that are setting themselves apart are the ones investing very heavily in to their peoples’ communication, leadership and practice management skills. It is no longer enough to just be technically skilled as a partner. Today’s environment requires a much higher capability for communicating. Technology has leveled the playing field for all firms. If your clients still see you as “just a tax guy” you’re operating at the commodity level. There’s no loyalty at this level. If your clients can get what you provide cheaper somewhere else, don’t kid yourself, they will. The trick is to provide them with service they can’t get anywhere else.
Fostering a culture of doing more with less Click here to listen to an interview with Michael Platt on this topic This applies not just to Accounting Firms, but to all businesses that are staying successful through what many would call an incredibly challenging economic environment. The businesses that are pulling ahead of the pack are the ones that have recognized the need to make cuts like everyone else, but have found ways to make up the difference by working smarter. This includes streamlining systems to cut down on wasted time. Maximizing their human capitol and cutting down on employee turn-over and training costs. Click HERE to see how you can do the same. They are looking at every aspect of the business with the goal of finding faster, better, more efficient ways of getting the job done.
They charge what they’re worth Click here to listen to an interview with Michael Platt on this topic Value billing… Conjures up all kind of scary thoughts for many practitioners. Client push back on fees, justifying the numbers to partners, meeting your billable hours requirement. But the firms that are emerging as the leaders of the pack are the ones taking a new approach to billing. They recognize that clients will only complain about fees for 2 reasons. 1. They were surprised by the bill because their CPA didn’t prepare them for what to expect. 2. They didn’t receive enough value from the service provided to make them feel they got their money’s worth.
These firms are operating above the commodity level, and as such, are providing the kind of advisory service that today’s entrepreneurs are starving for! Click HERE to get your free whitepaper from Mentor Plus on how you can be doing the same for your clients.
Value is relative. Find out what your clients value, give it to them, and charge accordingly. It’s all about establishing expectations on both sides of the table.
They encourage work-life balance throughout the organization Click here to listen to an interview with Michael Platt on this topic This one’s a no-brainer. Happier employees makes for less turn-over, higher job satisfaction and more consistent employee engagement. These things don’t just make for a better place to work. They make a significant impact on the bottom line as well.
They keep partners accountable to commitments and responsibilities Click here to listen to an interview with Michael Platt on this topic Last but not least, they have structures and systems to hold their partners accountable. Compensation is impacted when partners underperform. The idea that once you’re partner, you will be until you retire, is not true any longer.