At the 2020 Group annual conference last week, US chairman Chris Frederiksen spoke about how to build a modern firm.
Based on the group's research and Frederiksen's own experience of firms around the world, he came up with five elements common to modern, profitable firms.
"We are now in a paradigm shift, as we have never seen it before," he said, referring to finance technology innovations such as Apple Pay.
"Most accountants are following the 'Red Queen' concept and running as fast as you can just to stay where you are at the moment."
Modern firms specialise
According to Frederiksen, modern, profitable firms typically specialise in a particular industry or product.
In addition, it knows its purpose or 'Why' and doesn't try to be all things to all people.
"You don't see Starbucks selling Coke," he said, "because that isn't who they are or what they believe in."
With 90% of what the profession does becoming largely commoditised by technology that lets people to do themselves, firms need to diversify and adapt to survive.
Once the firm has hammered out its why, what it will focus on and what industry and area it will specialise in, it can then stop taking in "whatever rolls in the door".
Modern firms are highly focused
Focus draws on three things, said Frederiksen: passion that you can transfer to your clients; being darn good at what you do; and figuring out a way of working that's very profitable.
There are services firms can focus on to bring in profit. Some that are on the up include:
- Virtual FD and CFO (or VFO) services: This will mean you have access to (through a cloud system) an up-to-date set of accounts from which you can produce high quality business advice, as you have the data to hand
- Business advisory bolt-ons, including strategic planning, KPIs, benchmarking, profit improvement and business coaching: The latter is something that can be done for an hour per week on the phone, and clients "really appreciate" it.
Implement value or fixed pricing. This is so clients only need to make one buying decision a year as one bill rolls in and not one a month, which they are more likely to look at and review. Frederiksen advises telling clients, 'this is the way it's done' and not to accept debtors.
Another area that's rising is that of wealth management, he added. All clients need help and advice with their retirement and succession planning as well as things such as ensuring they have a will written.
Modern firms are different
Different includes having a unique, client-friendly office environment (his own includes a massive collection of art) and make their experience or client service a personal and positive one.
Modern firms often present themselves with a differentiating strap-line that focuses its purpose on clients and not the firm itself.
Another thing modern firms do differently, he added, was having publications or something tangible a client can take away with the firm's name on it. Books are a good way of doing this and can be published quite cheaply via Amazon self publishing or by getting a book you can white-label.
Modern firms are good at marketing
They use a 'pull' not 'push' approach at marketing. Push includes ads, pull includes things like having a "killer" website.
Elements of this website include ensuring its not another template identical to many others. Having good, regularly updated content including client testimonials, freebies such as downloads and how-to guides, a welcome video and webinars.
Communicate consistently with your clients and prospects with a weekly or fortnightly email. Even if it's not opened, your name was in their minds for that split second.
Modern firms say, 'live first, work second'
This rising ideal from the world of the milennial is one that modern firms have adopted.
There is a challenge in the profession, Frederiksen added, to attract and keep young and motivated talent. There are certain things they want, that allow them to live first and work second - and do so effectively.
These include giving them the freedom to work flexible hours and from home, to be given cloud-based apps for use on mobile devices, receiving good training regularly on not just accounting areas but management and other skills too, quarterly instead of annual reviews and rewards for performance.
In addition millennials love to be involved in their community and volunteering a charity work would be another draw for them to work at a firm.
Modern firms are cloud based
The message is, if you're not on it, get on it now!
Benefits according to Frederiksen include achieving zero entry, whereby everything is populated including automated bank feeds.
"Once you start doing it, you will realise how much profit is in it," he added.
This new paradigm isn't just a flash in the panm, according to Frederiksen. What we are witnessing a "sea change" in the profession.
Do you consider yourself a modern firm - do you recognsise yourself in any of the above elements?