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The professional way to respond to the recession. By Steve Pipe

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13th Oct 2008
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As I write this the FTSE100 has just fallen by the largest ever amount in a single day. And, despite the best efforts of governments across the world, it looks almost certain that we are at the start of the most turbulent economic period in your and my lifetimes.

These extraordinary times call for an extraordinary response from the accounting profession. Clients have loyally paid us in the good times. So now it is our turn to repay their trust by proactively helping them to strengthen their cashflow so they can weather the financial storm.

We have a moral obligation to show leadership - our professional integrity demands it of us. Doing nothing is not an option, and neither is waiting until our clients are desperate. For the good of society and the reputation of the profession, we have to be proactive in this.

Offering to help

The starting point is to show you care by proactively contacting every client and asking questions such as: “What effect is the recession already having on your business?”, “What extra effect it could have in the future?” and “Do you already have an action plan for dealing with it?”

In a previous article I suggested doing this by writing to clients. But now the time has passed for hiding behind the written word. We need to get off our backsides to pick up the phone and talk to them. It takes more effort, of course, but is so much more personal. It is also likely to be much more effective – since while people can ignore the written word, it is much harder for them to ignore a phone call.

And as you talk to them you should go on to ask if they want any help in developing, improving or implementing their anti-recession action plan. The best way to do that is probably to also ask – given that “cash is king” in a recession – if they would like you to carry out a diagnostic review of their key options for strengthening their cashflow so that they can weather the storm.

Regardless of whether they accept your offer of help, they will be both impressed and grateful, since these are worrying times and it is very reassuring for them to know that they have a good (and caring) accountant on their side.

Delivering the promise

If they accept your offer, the next step is to actually help them in whatever way they want and need. The good news, of course, is that in due course you will be able to charge extra fees for much of this extra help – so not only will your clients benefit, but so will you.

My specific suggestion, as I mentioned above, is that you offer them a free and quick diagnostic review to look for key ways to strengthen their cashflow.

Why “quick”? Because urgent times call for urgent action. And because there is only so much we can do for free. So a quick review allows you to address key issues and make preliminary recommendations.

Why “free”? Partly because it is a genuine offer of help rather than a self-serving attempt to line our own pockets. Partly it’s because a price tag would deter the people who need it most. And partly because it is very likely that they will ask you for further support to help them implement your recommendations – and it is entirely proper to charge fees for that kind of follow up help and support. So in a very real sense you can afford to do the diagnostic review stage for free. In fact, in my opinion you cannot afford not too.

Preparing for the challenge

My previous article gave some useful guidance on how to prepare your practice to rise to this challenge. So in this article I want to make one further suggestion.

Everyone goes on training courses to get to grips with the implications of major changes to the tax rules or accounting disclosure requirements, don’t they? So how much more important is it that we train ourselves to get to grips with the implications of the biggest financial shockwave of our lifetime?

And that is why, as a gesture of my support to the profession, and to help you show much needed leadership, I would like to give the first 100 partners to contact me a full day’s free training. Based on my extensive research, the training will cover how to design and launch a proactive anti-recession service for owner-managed business client, how to deliver that service profitably, and how you can also use it to win new clients away from the firms who can’t be bothered. If you would like this sort of free training, pleased contact me on [email protected].

Steve Pipe FCA is the Chairman and founder of the 250 practice strong association of leading accounting firms, AVN, and a leading researcher into the commercial issues and opportunities facing UK accountancy practices. He was also the editorial adviser to the ICAEW’s groundbreaking 2005 Report, and is the author of the 2008 White Paper “The proactive accountant”. He can be contacted on [email protected].

Note
The copyright for this article is retained by Steve Pipe and AVN – 12 October 2008

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By AnonymousUser
15th Oct 2008 21:35

Get your house in order
Steve,

It seems to me that firms should get their own house in order before offering to sort out their clients.

Our experience is that most firms (large and small, new and old) have lock-up, late payment and compromised profit with lower than expected recovery rates. Why should clients listen to accountants about maximising cash and profit when accountants aren’t good at it? Do accountants have the credibility? Maybe the starting point should be demonstrating leadership - it's worked for Gordon Brown! One minute he's got a revolt and now he's a world leader. It's your time if you go for it!

Accountants can also keep in mind that they don’t need to be the solution provider to be hugely valuable – providing signposts is a good start. Firms that want to know someone who can get bank funding applications approved and Business Angle Investment can email me at [email protected] and I’ll give you a really useful contact.

Another option is for firms to run a series of “secrets shared” Webinars for clients to listen to other businesses share success stories about key issues like financial management and credit control.

And., if you think your clients should Credit Check potential new customers then why not offer a “service extension” and do this for clients? Again, email me and I’ll explain how you can start doing this for clients.

Steve – could free service do more harm than good? Have a sales meeting and sell a diagnostic – free consulting may result in clients not taking action and accountants not following through. If the fee was £5k to improve cashflow by £20k then maybe the firm would be more motivated!

Make hay, times are good for those than can make a difference.

Bob
[email protected]
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Steve pipe
By Steve Pipe
14th Oct 2008 17:21

West Country Practitioner agrees
In his diary this month The West Country Practitioner makes it crystal clear that we need to be proactive in exactly the way spelled out above.

So if you aren’t quite sure how to do it, please accept the offer of free training in the article.

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