What we’ve learned from 10 years of excellenceby
With entries now open for the 2021 Accounting Excellence Awards, editor in chief John Stokdyk looks back on the key trends that leading practice have embraced over the past decade.
This time 10 years ago, AccountingWEB launched its first annual Practice Excellence Awards. The scheme has gone from strength to strength in that time and evolved into the Accounting Excellence Awards, which last year attracted more than 200 entries.
Some firms have taken part almost every year. The insights they’ve shared into how they’ve grown and evolved has given us a unique template for what makes successful accountancy firms work.
Having acted as a judge and reviewed the entries in every previous year, I’ve learned that there aren’t many secrets to practice success. Most entrants know the fundamentals of good practice – understanding your clients, responding rapidly to their needs and exceeding their expectations – but the firms that get the recognition and awards have worked out how to implement those principles even when experiencing rapid growth and changing circumstances.
Key trends in Accounting Excellence
During the past decade, all those entry submissions allowed us to track the profession’s migration to cloud accounting and show how accountants coped with compliance transitions ranging from real-time information (RTI) for PAYE and pensions auto-enrolment right through to Making Tax Digital (work that is still in progress).
Looking back at that timeline since 2013, when we started analysing the underlying trends, these are the top five initiatives firms highlighted in their Accounting Excellence Award entries:
Leading Accounting Excellence trends 2013-20
Looking at the pace of cloud adoption by practitioners (top blue line on the chart above), cloud accounting doubled from 42% to 88% from 2015-18. The big acceleration was driven by MTD, as we saw in 2018, when the MTD programme was revised and delayed until 2019, resulting in visible dips in practice management (red line) and expense capture software (orange line), two of the key tools for MTD compliance.
Flexible working (purple) is a relative newcomer among the initiatives reported in Accounting Excellence Award entries, but it too doubled between 2018 and 2020. The initial impetus was to retain staff who wanted to take advantage of flexible online working, but Covid-19 made that an essential requirement for any practice with more than a couple of staff.
What we have learned
The trend lines show us how practices are changing, but the recurring qualities that mark out the most successful firms have remained surprisingly consistent. As the head of sales for Sage’s Accountants Division back in 2012, small firm award judge Claire Carter commented: “If they are thinking about what they can do for their clients and put that at the heart of their business, they’re in a good place.”
The philosophy certainly stood Carter in good stead as she moved to Wolters Kluwer, where she is now an executive vice president and CEO of tax and accounting for all of Europe.
Business software companies put a huge store on the Net Promoter Score (NPS). NPS boils customer satisfaction down to the ultimate question, “Based on the service you have received in the past 12 months, how likely would you be to refer us to a colleague?” and is built into the Accounting Excellence questionnaire.
Research by Fred Reichheld, who came up with the measure, found a very strong correlation between revenue growth and a high NPS. That relationship was confirmed and reinforced by the NPS ratings entrants gained in 2012 and by the way that many of the strongest contenders come back every year to report how they’re performing against their customer satisfaction targets.
And yes, firms that monitor their performance by regularly soliciting feedback from clients also make a strong showing in the Accounting Excellence Awards every year.
During an hour-long webinar packed with Accounting Excellence tips last week, Sian Kelly picked up the theme of exceeding client expectations. “If you’re giving advice to clients, put yourself in their shoes and understand what they want, and exceed their expectations. It’s all about customer service and getting that right,” she advised.
Some of the things finalists have done over the years to achieve that level of care include:
- Building regular meetings or phone conversations into the firm’s client care programme. How clients experience and perceive good service is based to a large degree on good communication, so obviously the more often and consistently you contact them, the better.
- Appointing client managers to act as champions and problem-solvers for the client within the firm. This approach improves communication and consistency in client service and has the added benefit of freeing up fee-earners to focus on higher value work.
- Managing referrals systematically. Whether they come via word of mouth or social media platforms, referrals are still the gold standard for winning new business. Smart and successful firms actively seek referrals from clients and set up formal mechanisms to monitor and manage them.
Aside from a laser focus on client satisfaction, many of our award winners share a commitment to continuous improvement. Often this emerges from evidence of initiatives that firms implemented by actively involving staff in shaping new ways to work. When measured in terms of fee growth during 2016-18, practices that undertook this approach typically outperformed the average by 25-30%.
That commitment remains just as relevant today, according to 2020 Small Firm of the Year award winner Paul Layte. During last week’s webinar, Layte shared the unofficial motto for his firm Next Level Business: “Kaizen to avoid chaos. Kaizen is a Japanese term and it means as we grow, if we want to avoid chaos, then we need to continually improve.”
Reading this blog, watching the companion Accounting Excellence Talks webinar series and taking part in the awards are all simple steps any practice can take to improve how they work.
The entry process itself can help because it involves thinking about the value your firm delivers to clients and collecting evidence to demonstrate how well you go about delivering it. Throw in a few insights and ideas from fellow entrants and finalists, and any good accountant should be able to come up with steps that will help them steer their firm where they want it to go next.
If you want to get more actively involved, visit the Accounting Excellence website to enter the 2021 awards. Entries are now open.
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