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Profit first: Why profit is more important than customer service

12th Jul 2018
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The headline isn’t meant to introduce an ode to the best selling book by Mike Michaelowicz but it’s a point of reference and focus for those new sole practitioners who are starting out on a tight budget.

Profits and cash in the short term are paramount to your long-term success.

If you read several of the articles that have appeared on AccountingWEB it’s very easy to get sucked into thinking you need to prioritise the ‘customer experience’ and appoint a ‘client champion’.

Well, my view is you don’t.

Yes, you should provide a good service, charge reasonable fees, be straightforward and honest when you speak to clients and they will refer work to you and stay with you for years to come.

Just make sure you focus on getting your fee and service levels right first. This will affect how quickly and easily you can start to achieve the level of income you need and will avoid you becoming a busy fool.

From my experience and from speaking to other sole practitioners, I know that there are plenty who have the same experience.

When you first start out, just you, no other staff apart from possibly some part-time admin or bookkeeping support, the biggest limitation on your fee income and therefore your profit levels is your time.

Initially, you are time rich but don’t get sucked into using all that free time to provide ‘free’ advice to clients.

By all means call or email a client to make sure they’ve paid a tax bill on time or to request information, just make sure there is a purpose to that call or email.

Don’t ‘just call in’ to see how clients are doing and help them with queries. Fine to do it if you are passing every now and then, but if you make a habit of it clients will start to expect it.

There will come a point when you start to get busy and you can’t answer those detailed email queries as quickly and you can’t just ‘pop in’ to deal with a bookkeeping query. Clients will then start to get disgruntled.

Also remember clients are busy running their businesses, the last thing they want is a ‘client champion’ phoning them to see how they are. This touchy-feely stuff isn’t needed or wanted.

Do a good job for your clients, charge reasonable fees and they will be happy. Phone them up for no particular reason when they’re busy and you’ll irritate them.

By providing the agreed services properly you’ll have plenty of opportunity to make contact.

Emailing payroll information each month, requesting quarterly bookkeeping information for the vat returns, sending accounts and tax returns for approval. All of these necessary communication points provide plenty of opportunities to have a "and how is business..." conversation.

By all means be proactive when matters need to be discussed. Clients really appreciate that, but don’t call for calling sake.

And remember – ‘time is money’.


Replies (17)

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By Sheepy306
13th Jul 2018 21:10

Disgracefully sensible and top notch advice. I’m afraid you’ll never win any Practice Excellence awards though with that attitude!

Thanks (7)
Replying to Sheepy306:
Mark Telford Chartered Accountant
By Mark Telford
15th Jul 2018 17:57

Thanks Sheepy - there is of course an inverse correlation between the financial performance of a small practice and it’s ability to win PE awards.

Thanks (7)
Chris M
By mr. mischief
14th Jul 2018 18:58

In fact, the inverse law applies to awards in general. In my client base, more or less all the award winners are loss-making or very thin gruel profits.

Whereas the guys making a killing from a start-up start are all way too busy making money to bother with awards, so only 1 of them has ever won one.

Thanks (7)
Replying to mr. mischief:
paddle steamer
15th Jul 2018 18:39

Don't know they have to differ, one can make money and gets bits of paper.

We won a Gazelle award as a fastest (one of them) growing company. We one year had a very profitable site sale (back when we bought sites, got planning and sold to builders) and a year or so later I received this award certificate through the post, I never asked for it or applied for it, it just arrived.

It was of course somewhat premature re our vaulting up the list of Scotland's most profitable companies, the next year our profits dropped back to their more normal level, still it is always a talking point.

It looks good on my notice board in front of my desk alongside my City & Guilds Cert qualifying me as a personal licence holder (needed for a pub we lease out in case tenancy ends and someone has to be the personal licence holder until we find another tenant- 3 hours of my life and a multiple choice quiz to get that one) and it used to also sit alongside the office TV licence until we binned the TV.

Thanks (0)
Replying to mr. mischief:
By Tom 7000
17th Jul 2018 10:06

I beg to differ

I am doing ok and I won an award...

The longest drive... it was easy 330yds... I didn't half belt it, it was a huge hook too... bent like a banana hit the fairway going sideways and stopped 6 inches before the rough.

I have it on my shelf.

Thanks (2)
Della Hudson FCA
By Della Hudson
17th Jul 2018 06:45

I agree that most clients are too busy for those “just touching base” conversations. I also hate being on the receiving end of them from salespeople. It’s not client service, it’s just disruptive.

Like you, our bookkeepers were in touch each month and had enough time to to chat naturally as well as being trained to spot opportunities to help clients. This relationship meant that clients would often contact our bookkeepers with a query that could be passed on to the accountant sitting next to them.

Thanks (4)
By Ian McTernan CTA
17th Jul 2018 10:07

Some clients like to be bothered by their advisors, some don't . The key is in knowing your clients, and knowing when to step in and provide advice and when you shouldn't.

Choose your clients wisely, then deal with them appropriately.

If you are just starting out in practice, remember to set the tone with client relationships early then stick to it.

Thanks (2)
By AndrewV12
17th Jul 2018 10:27

Extract above
'I do this not by submitting accounts and tax returns on time - that's the bare minimum, but by helping them achieve more. This can be business growth, business sale, succession or retirement planning, business improvement and most importantly personal goals. '

I hear so much of this, just how are Accountants, who work on historical data supposed to expand other peoples business (including giving advice which may turn sour), its hard enough to expand your own business.

Thanks (0)
Replying to AndrewV12:
Mark Telford Chartered Accountant
By Mark Telford
18th Jul 2018 10:27

Andrew - try talking to your clients and finding out if there's anything they need help with.

Ask questions - it may turn out that they would value your contribution to prepare a business plan, budget, cash flow forecast.

Client's don't look backwards to the past to see how they should run their businesses.

While not every client will want support and advice which generates additional work and fees, for an 'average' small practice I'd say at least 10% will.

In the last week 3 of our clients have asked for more help purely as a result of conversations - staying in touch with them and letting them know you can support them outside of just annual accounts and tax returns.

Thanks (1)
By johnjenkins
17th Jul 2018 10:30

My mate used to charge clients when they took him out to lunch.
His attitude was it's my time so the client can pay for it.
Horses for courses.

Thanks (1)
By ColA
17th Jul 2018 10:46

As an accountant in commerce I found professional auditors of little help and often more of an irritant.
They clearly displayed a profit-only motive, especially when my appointment resulted in their fees dropping by two thirds.
As to customer service, fee-earning opportunities all too blatant.

Thanks (1)
Glenn Martin
By Glenn Martin
17th Jul 2018 13:01

Another great article Mark, debunking a few myths that seem to land in my inbox 7/8 times per week from the "Accountant Gurus."

For me I have geared my service around delivering a result for clients. These are easily measured, deliver results for your clients and they will go away and spread the word. Delivering results to clients allows for full recovery of your fees as you have done what you have said you would do.

I am not one for all this cuddly stuff. I like to meet mid year with clients and discuss issues they have, and get into the nuts and bolts of the business that will make a difference, reducing debtors down, improving cashflow etc. This is what clients want.

I am not one for these client satisfaction scores as I imagine poor ones are ignored, and clients who are happy enough with your service to come back each year, probably cannot be bothered to even fill them in so the data collected is probably from a few pet clients so the result will maybe sound good but of actual no real measure as to if you do a good job or not.

Fancy CRM systems that manage client communications are looked at as must haves, but clients actually want is genuine contact personal to them, not automated standard responses that go out to everyone, although these have their place with issuing reminders etc, but a Zendesk style way of dealing with clients does not appeal to me, although I imagine quoting things like all client queries are dealt within 4 hours sounds good to some folk.

You just have to consider that HMRC has a 49% satisfaction score from accountants to know these are cobblers.

Clients who gush about how good their accountant is, do so as they probably get way more services than they actually pay for.

Ps I have been shortlisted in the service category for the AE awards, although not a massive financial success I am getting there.

Thanks (3)
Mark Lee headshot 2023
By Mark Lee
17th Jul 2018 17:19

Great article Mark and it matches my advice to start up firms of accountants and sole practitioners.

I didn't think I was going to agree when I read the title in isolation but you argue your case well.

Thanks (0)
By North East Accountant
18th Jul 2018 08:51

Profit and Cash are also paramount to your long term , as well as short term, survival.

Fundamental stuff that people tend to forget.

Thanks (1)
Replying to North East Accountant:
Mark Telford Chartered Accountant
By Mark Telford
18th Jul 2018 10:25

It is, but people get caught up in all the hype and marketing spiel which is incessant in the world of small/new practices.

I think we're seen as an easy target - do this, buy that, use that app...

We (small/sole/new practitioners) need to step back for a moment and think about what we're trying to achieve.

For this reason I think its really important to share experiences and practices with other practitioners in a similar position - you can gain far more from this than from gurus, consultants and marketeers.

Thanks (0)
Replying to Mark Telford:
Glenn Martin
By Glenn Martin
18th Jul 2018 12:39

That last sentence, you said what everyone feels, but out loud.

Well done.

I suspect you now maybe Firstabs hero.

Thanks (0)
By KrisKros
19th Jul 2018 11:58

Highly baited article but beautifully delivered to the point, That is the definition of giving high customer service delivering above and beyond as required when asked, which will in turn give profits (providing you're charging correctly)

Nice to see some common sense, a ray of light in a world of the lost, confused and cynics .

Bravo Sir, I'm curious if you specialise in offering your services to any industry in particular?

Thanks (0)