Can your clients afford to trust you?

There is a common misconception that accountants sell their time and that this is what clients are buying from them. Certainly many accountants still think in terms of the time they spend working on a client’s affairs. But ‘time’ is rarely what clients think they are buying, explains Mark Lee.

Most of all clients generally want ‘peace of mind’ from their accountant. And this requires that they can have confidence in their accountant to do all that is required on their behalf. Such confidence requires that they trust their accountant. Can your clients afford to trust you? They will certainly remain your clients for longer if they can trust you than if their trust is violated.

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  • Promises, promises
  • The implied promises
  • Clients’ assumptions
  • Business surveys
  • Breach of trust

Continued...

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Comments
Bob Harper's picture

I think you can trust traditional accountants

Bob Harper | | Permalink

@Mark - I think 99% of clients can trust 99% traditional accountants 99% of the time.

They can trust them to do no more than the basics. They can trust them to charge based on costs/time for something they don't really want, use or value.

Clients can also trust traditional accountants not to find more effective ways of working. And, they can trust them not to develop themselves so they can do more than accounts/tax returns with a bit of tax planning thrown in to justify the fee. 

Bob Harper

Crunchers - Alternative Accountants

ShirleyM's picture

Thanks for the vote of confidence, Bob!    3 thanks

ShirleyM | | Permalink

I didn't realise you were an expert authority on 99% of all traditional accountants.

Your post reminds me of a cat-food commercial. Did you write that, too?

I don't really mean to be rude, but quite honestly it gets my gall when you are so rude yourself.

I don't want to get into a long debate about how wrong I am, and how right you are (Mr Perfect), so I give you my blessing to criticise me all you want.

Rant over!

Sometimes Bob    2 thanks

justsotax | | Permalink

you just lose me at hello.....

 

I have read one of your reports and had many a 'discussion' through the forum and whilst I don't always agree with your comments I believe some of what you say is relevant to us all.  BUT given your expertise in marketing it shocks me at your inability to sell something to the industry that you believe in, you appear to comprehensively fail to translate the benefits of your approach to a significant (albeit anecdotal) number of members.

 

If i were to apply the approach you use on here to potential clients it seems my sales pitch would go somewhere along these lines:

'99% of you business owners haven't got a clue your profit is or where your income is coming from...indeed you struggle to add 2 + 2, and worse than that if you get enquired into by the Revenue the likely consequences are you will get at least 20 years in jail because there is bound to be a missing receipt'.....so if you need help just email me at @givemeyourmoney.co.uk.....

 

 

 

Bob Harper's picture

Traditional

Bob Harper | | Permalink

@Shirley - couple of things:

1) I was careful to use the word "traditional" and I do not consider you traditional.

2) Am I wrong? Are traditional accountants doing more than the basics, innovating or developing themselves? No...most are doing what they've always done accounts and tax returns with a bit of tax planning to justify the fee.

@JustSoTax - if you didn't know, I am not really interested in working with traditional accountants. The ones that get what I am talking about tend to share my opinions and see the funny side of my posts, rather than get offended.

My feeling is that new accountants/firms are needed because the established ones are not brave enough to attack themselves.

See if you smile about this. I'm working on a video at the moment, it's about 50% done but the first part explains what we think of traditional accountants http://vimeo.com/42684973

Bob Harper

Crunchers - Alternative Accountants

mr. mischief's picture

mmm    1 thanks

mr. mischief | | Permalink

Not sure.  I have just won a client from a "traditional" Chartered Accountant.  The reason was I told this guy about a 50% rates rebate I thought he could apply for, one all my qualifying clients already have.

He got a £5k rebate.  I've also given him VAT separation advice in casual conversation, he's in the local Chamber of Trade.  His existing accountant said to him, when told why he was leaving:

"We just do the books, we don't get involved in stuff like that."

My new client expected more.  Having been an FD for a company with £80k sales, I aim to act just like that for all clients, and this includes an extensive range of high quality third parties such as commercial loan specialists.

I reckon 99% of the guys on this site are doing all of this.  By definition a site like this self-selects people who are at least interested in going the extra mile.  But I still think natinally this is unusual.

A client I won last year from the main tax partner of the largest local firm saved £7k in corporation tax and £3k per year income tax when I sorted things out properly for her.  No offshore stuff, just box-standard stuff most posters on here would come up with.

 

@ Bob - not offended by your posts...

justsotax | | Permalink

just offering some constructive critiscism on the way you put your point across (whether what you say is correct or not).

 

And as Mr Mishcief has implied I think you will find that 99% of traditional accountants (as defined by you) are unlikely to be members of a site like this.....indeed given your defiinition i suspect they are still using large analysis paper for the accounts and probably have a desktop computer with windows 97 on it....and probably are still wondering why they would need a website.  But I trust you really knew that as you will have done a bit of bit of research on the type of clients you are after and where to find them....buts thats teaching you how to suck eggs I guess....

 

 

Business Advisors    1 thanks

eddybee | | Permalink

I think it is important for accountants to be clear about what they do and what they don't do.  Some clients may be happy "just having the books done"; however if accountants purport to be "business advisors" are they clear about what the advice entails and what it doesn't entail.  (eg: Do they advise on sales on marketing which is pretty fundamental to the vast majority of businesses.

Poor cash flow management is one of the major causes of business failure - how many accountant "business advisors" advise and provide practical help to clients in that area? I am sure some do but equally many won't.   There is of course Mark's options 2 & 3 (outsourcing/referral), but how many are actually prepared to admit that they either don't have the skills/time to provide the necessary support and then will take one of these paths?   Whilst I get the feeling that things are moving very slowly in this direction, I am sure many remain  parochial.  

It's a shame that this site doesn't have a poll facility!

 

 David Lewis

http://camroseconsulting.co.uk/

 

    

Bob Harper's picture

Selling

Bob Harper | | Permalink

@JustSoTax - it would be interesting to know:

  • What percentage of fees AWeb members attributes to compliance and added value services
  • How many record time because that shows they are not value focussed
  • How many hours they invest a month in personal development

Would you be willing to share your answers?

Bob Harper

Crunchers - Alternative Accountants

ShirleyM's picture

@Bob    3 thanks

ShirleyM | | Permalink

I am sure justsotax can answer for himself, but how is justsotax likely to know the answer any more than you do? Any answer given would be speculation, and should not be confused with fact!

Why are you so concerned with what others do? Are you trying to steal our ideas?????

@Bob

The Black Knight | | Permalink

What do you see as added value from accountants?

and surely if this were marketable you would not need to sell these services as cheap as chips?

I think some traditional skills like getting the accounts and tax returns correct are still quite important.

Sure there are firms out there that do the basics. They may not have set the world on fire but at least you get a bank that reconciles.

You would be surprised how many accountants do not get the basics right and when you ask for carry over information you find there are no workings and all the fancy ideas were flawed.

We alter our services to what the clients want and or need. Always a difficult one to ascertain when the client does not know themselves.

Bob Harper's picture

Facts

Bob Harper | | Permalink

@Shirley - I will speculate:

  • Compliance 95%
  • Time recording 95%
  • Accountants investing in personal development 5%

@BlackKnight - I am aware how poor some firms are at the basis, I just don't think it is a good idea to base a business strategy on the competition being poor.

Bob

hmmm....facts and speculate in the same    2 thanks

justsotax | | Permalink

sentence when referring to some figures....i can certainly see the funny side of that post.....

 

I suppose thats the difference between marketing and accounting....one deals with pure speculation...and one deals in facts......

Bob Harper's picture

Difference

Bob Harper | | Permalink

@JustSoTax - that's a very technicians comment and one of the mindsets that accountants need to breakdown if they are to be successful with practice development.

By the way, I've got a new Website coming out next month with lots of free content about practice development. I'll make sure I cover this early on just don't complain about being challenged.

The fact is that the days of hope marketing are long gone. There is enough research, data and evidence to show what works and what doesn't. Marketing is not easy but is scientific and the best marketing uses the latest understanding of how the brain works. And, as we are learning more about the brain we can be more effective with marketing.

Having said that, both both accounting and marketing are numbers based disciplines. And, they both deal with facts. They just are looking at the numbers from a different perspective. One is a just a history lesson, the other is focussed on today and tomorrow.

Bob Harper

Crunchers

 

Cynical    2 thanks

eddies368 | | Permalink

I thought I was cynical until I read Bob's opening post.

Whist I cannot call myself a traditional accountant, being a mere CTA, I have a remarkable number of clients who I've acted for for 39 years since leaving the Revenue (which was actually a happy place to work in those days, but that's another story).

Many of those clients have me as a trustee and have named me as an executor. As what solicitors term a private client  partner in a top 20 practice I have recently agreed to continue on a consultancy basis to look after those clients. I don't believe for a moment that my clients don't value what I do. So I must be one of the remaining 1% Bob.

what next....a discussion on

justsotax | | Permalink

the benefits of NLP and how you can coerse them into buying from you....or perhaps one of the latest marketing motos....."for every no you are closer to a yes..."  (lets not go into the nigerian national lottery emails....for which no doubt the marketing strategy combines a number of these things to sucker the ill informed and vunerable into parting with their cash).

 

I am happy to learn of any marketing ideas that work, but I just like to know the cost/benefits.....is it the marketing or the product that is selling, is it the motivation of the business owner or is it the marketing material he is pushing out, and what it the breakeven.....additional work vs extra staff/overheads/marketing costs etc.....

 

If it is anything like a business coachs costs then over a year you could be looking at spending £10,000....that requires a net profit of £24,000  (give or take - assuming owner is 40% taxpayer), if we say that out of a practice you would expect say 1/3 profit, 1/3 overheads, 1/3 emp'ee costs then the actual turnover you need is £72,000 to breakeven....of course this doesn't take account of the actual additional marketing costs (say the marketing guru suggests telemarketing, email/online strategy that requires IT support etc)...suddenly that 30% growth suddenly doesn't look so good....

 

...just saying.

 

 

Bob Harper's picture

Yes and no

Bob Harper | | Permalink

@JustSoTax - NLP can't be used to get anyone to do what they don't want to do and I find it better not to ask yes/no questions (unless I know the answer is yes).

Your numbers are right, if you look at one year in isolation. But, what about if £10,000 in coaching gets you to the next level in your business for the rest of your life?

It could be the best money ever spent because good coaching is self-funding.

Am I right that you are with AVN?

Bob Harper

Crunchers Accountants

 

History lesson?

eddybee | | Permalink

In its basic form accountancy can be purely a "history lesson".   However (believe it or not) some accountants have been known to prepare forecasts, budgets and business plans and to encourage clients to be forward looking!!  Although I no longer class myself as a traditional accountant, it is a little disparaging to see all accountants tarred with the same brush.

From the accountant's perspective it is quite right that they only provide the services they are comfortable providing.  Each firm will have it's own level of ambition and attitude to risk and some  do not feel the need to move out of their comfort zone.   I'm afraid that's a fact of life.

However highly ambitious firms are more likely to take a more aggressive stance both in terms of marketing and needing to be perceived to add value (possibly investing in training and new staff). The question for the less ambitious firms is how do they respond?  Especially when clients become successful and are more likely to be targeted by other firms.   

It's when clients see that other firms are providing something that they need and that hasn't been offered by their existing accountant that trust can be broken.   Clients don't know what they don't know - until someone points it out!!

Marketing and soft skills are important;but they need to be backed up by substance and being able to support clients' changing needs (which is where collaboration can help). 

I wonder how many firms actually look at their business strategically (eg: doing a swot analysis) and how many simply rest on their laurels?  

 

 

 

Growth and trust ot all it seems

The Black Knight | | Permalink

I was quite surprised to read about the accountant expelled from his professional body that continued to practice and kept all the false corporation tax refunds.

Eventually sent down.

But clearly to achieve 800 clients that blindly trusted him (a complete whotsit) was quite extraordinary in the time frame. Or was he just the cheapest in town because he did not have to do the work so any fee was profitable.

So is even trust a dirty word now as well?

Along with: Proactive, added value, and a can do attitude ?

Clearly some marketing techniques are designed to give the illusion of trust so the customer can be conned. Some people can already see through these cynical and false claims.

This post and your website

mackthefork | | Permalink

Bob Harper wrote:

@Mark - I think 99% of clients can trust 99% traditional accountants 99% of the time.

They can trust them to do no more than the basics. They can trust them to charge based on costs/time for something they don't really want, use or value.

Clients can also trust traditional accountants not to find more effective ways of working. And, they can trust them not to develop themselves so they can do more than accounts/tax returns with a bit of tax planning thrown in to justify the fee. 

Bob Harper

Crunchers - Alternative Accountants

Fall massively short of accepted standards of professionalism and good conduct, which professional body are you with?, I will drop them a couple of links by email.

Regards

MtF

Wow, just wow!

mackthefork | | Permalink

Bob Harper wrote:

@Shirley - I will speculate:

  • Compliance 95%
  • Time recording 95%
  • Accountants investing in personal development 5%

@BlackKnight - I am aware how poor some firms are at the basis, I just don't think it is a good idea to base a business strategy on the competition being poor.

Bob

 

1) Recording time is sensible it connects the costs of providing goods and services to the fees charged, many businesses also fail due to not doing this right.

2) 1 day a month is not so bad, lol, they probably have too much work to do much more, maybe I'll see you at International Womens Week next year, meh I will probably be busy actually but you enjoy.

3) Non-compliance is the opposite, I spend less than 5% of my time doing this, glad to hear you are keeping it going for the team though.

4) doing a good job is not a busienss strategy selected due to others being rubbish lol, do you see why? It's just about not being rubbish, you can juggle with more than one ball you know.

Regards

MtF

Bob Harper's picture

Standards

Bob Harper | | Permalink

@MackTheFork - I accept my comments may fall short of accepted standards of professionalism, as defined by traditional accountants. But, I think these standards are wrong.

Recording time may appear sensible but there are massive downsides. Most traditional accountants base their fees on costs plus desired profit (even if they use fixed prices) and as a result clients end up paying more than more than they need to.

Is that professional?

Bob Harper

Crunchers Accountancy Franchise

ShirleyM's picture

So what!

ShirleyM | | Permalink

Recording time may appear sensible but there are massive downsides. Most traditional accountants base their fees on costs plus desired profit (even if they use fixed prices) and as a result clients end up paying more than more than they need to. 

I personally don't agree with % pricing on tax saved, and I don't do it myself, but if other accountants want to do that, and if a client is happy to pay his accountant £5K for something another accountant would only charge £1K (based on time recording/fixed fees), then it is their choice!

What ?    1 thanks

The Black Knight | | Permalink

Bob Harper wrote:

@MackTheFork - I accept my comments may fall short of accepted standards of professionalism, as defined by traditional accountants. But, I think these standards are wrong.

Recording time may appear sensible but there are massive downsides. Most traditional accountants base their fees on costs plus desired profit (even if they use fixed prices) and as a result clients end up paying more than more than they need to.

Is that professional?

Bob Harper

Crunchers Accountancy Franchise

What rubbish - paying more than they need to ?

Most accountants also write off a lot of time when the time spent is too much.

You are free to charge on a time basis or on a fixed fees basis both have their ups and downsides. or a mixture of both if you like.No system is perfect.

Charging by % however interferes with being seen to be independent which is why you are not allowed to do it.

Bob the rules of professionalism are about protecting the public.

For me it's also about doing the job properly and there is a price where that is achievable. It is my experience that when the fees become dirt cheap so does the standard of work and advice.

Why exactly do you have chip on your shoulder about professionally qualified accountants?

 

Bob Harper's picture

Paying

Bob Harper | | Permalink

@Shirley - value pricing can mean clients pay more, but only when the value is high. It also means they pay less where there is value is low, like annual accounts. Pricing on value is 100% ethical because the client and accountant are fully aligned.

@BlackKnight - two wrongs don't make a right.

I have nothing against professionally qualified accountants. My issue is with what I call traditional accountants who base their business model on time based billing.

Bob Harper

Crunchers Accountants

Am I hearing you right?    1 thanks

mackthefork | | Permalink

@MackTheFork - I accept my comments may fall short of accepted standards of professionalism, as defined by traditional accountants. But, I think these standards are wrong. 

You are saying here that you don't think it's important for tax advisors to have high standards, and would prefer 'a race to the bottom' with everyone having a smiley face logo and a brash aggressive line in BS, the quality of the services behind it are not so important.

I just want to know where your company stands, if this isn't an extraordinarily meticulously planned troll.

Regards

MtF

 

Bob Harper's picture

Where I stand

Bob Harper | | Permalink

@MtF - I stand for value and challenging the profession on its business model of basing fees on time. A profession that uses this model (in my opinion) is not focussed 100% on the client and is not as effective as it could be.

I could complete a Self Assessment questionnaire for firms to challenge themselves but there are books out there that explain it.

Here is a book you may find useful written by a true professional:

http://www.amazon.co.uk/Life-without-Timesheets-Hugh-Williams/dp/product-description/0955418801

Bob Harper

Crunchers Accountants

At least be honest

mackthefork | | Permalink

Bob Harper wrote:

@MtF - I stand for value and challenging the profession on its business model of basing fees on time. A profession that uses this model (in my opinion) is not focussed 100% on the client and is not as effective as it could be.

I could complete a Self Assessment questionnaire for firms to challenge themselves but there are books out there that explain it.

Here is a book you may find useful written by a true professional:

http://www.amazon.co.uk/Life-without-Timesheets-Hugh-Williams/dp/product-description/0955418801

Bob Harper

Crunchers Accountants

1) The guy who wrote that book doesn't think you are charging enough, you are arguing the opposite.

2) The fixed fee, no frills service has been around a long time, the pros/cons and in most cases the end results are well known, I have seen many clients come from these types of firm and you look at their affairs over the last 12 months and think yeah sure I will charge 500/1000 more than the last guy, but they will still be 4 or 5 grand better off as a dozen good ideas have been overlooked due to the other firm not having the quality of staff to pick this stuff out.

Anyway I genuinely wish you good luck and hope you are different but i think timesheets definitely have a place for the time being, lots of time is wriutten off you know, precisely for the reasons you argue the timesheet is redundant.  I just think you missed the point.

Regards

MtF

Bob Harper's picture

Time

Bob Harper | | Permalink

@MtF - I am not proposing fixed fees. Most firms who use fixed fees do this without changing their thinking. They do what they've always done but with a fixed fee sticker.

What I am saying is that accountants should change their business model and price based on value. This means charging less for some things (e.g. compliance). But, it also means charging more for some things (e.g. helping clients develop their business).

This has a fundamental effect on how you approach developing and managing a practice. And, it is better for everyone except traditional firms who will lose clients.

Timesheets have a place in firms who believe that time is money and pursue a strategy based on efficiency. I prefer to believe that revenue comes from knowledge, profits from risk and being effective is the best strategy.

Who would you want to operate on your brain tumour, a efficient surgeon or an effective one? Who would you choose to operate, one who gets paid based on success or one based on how many hours it took?

I used to believe is Santa but I don't any more. I used to believe we sold time (because my first employer told me). But, I have educated myself and made my own mind up.

Bob Harper

Crunchers Accountants

 

This means charging less for    1 thanks

mackthefork | | Permalink

"This means charging less for some things (e.g. compliance). But, it also means charging more for some things (e.g. helping clients develop their business)"

This tends to be a particularly woolley area, how will you base your fees, on results?  If so how will you know the results of your work which will almost certainly not be seen within a practical timescale.  Compliance is under rated in my honest opinion.

"Who would you want to operate on your brain tumour, a efficient surgeon or an effective one? Who would you choose to operate, one who gets paid based on success or one based on how many hours it took? "

This is a poor analogy because when your life is involved you would give all you had to save it, except in some extreme examples, however when the question is about money and business the balance tips in favour of the best result on average, therefore efficiency is the likely winner.

Regards

MtF