Accounting Business Success Strategies

The accounting business is characterized by professionals who work long hours during most of the year while seldom earning enough profit to expand with new workers to carry the burden of serving a growing base of clients. Three-fourths of public accounting firms are estimated to consist of one CPA as a solo practitioner or with a single assistant. Finding clients who require tax preparation or bookkeeping services is seldom an issue. Rather, the burden for a successful accounting business is providing quality service to the right customers—and doing so in fewer hours with greater profit.

Eventually the owner of an accounting business must decide between being a staff accountant or a business executive. This step is best achieved if planned for at the beginning of the practice. Otherwise, the accounting firm becomes perpetually stuck in neutral. Sadly, few accountants choose the path to success.

The transition to becoming an accounting business executive means relinquishing the rudiments of preparing tax returns and conducting bookkeeping adjustments. Sure, an accountant must remain knowledgeable about these subjects in order to take charge of hiring, training, monitoring, and assigning projects. But the primary role of the successful executive in an accounting business involves client relations. Maintaining contact with clients builds brand loyalty and permits clients to say that their accountant really knows them. Without this, clients never understand the value provided by their accountant. Truly caring about people is admirable, but success in an accounting business depends upon allocating time to convey what the company’s services are all about.

So how does an accountant pursue this marketing endeavor while still completing the accounting tasks? The first step is to prioritize. Accomplish the absolutely necessary accounting duties. Then communicate with clients about what is of lesser importance and why it can be completed later. After all, there are only 168 hours in a week. Allowing time for eating, sleeping, and potty breaks leaves maybe 100 hours for everything else. And that includes time for the most important process of each week—thinking. To transcend from the ordinary requires time to think before acting. This ability is what separates humans from the other animals.

An infinite number of demands cannot be addressed in a finite amount of time. Accountants who work too many hours have committed themselves in the wrong manner to clients. When an accounting executive thinks and communicates to clients about a process, the clients appreciate the personalized value and the accountant commits to achieving the most important objectives of each client. The prioritized necessities are understood and appreciated by the client precisely because of the communication by the accountant. This communication is best served to clients from the executive level of the accounting business. The working staff is busy completing assignments and reporting back to the executive.

Spending time on projects that are not of chief importance is noble but futile given a fixed amount of time. Success in the accounting business depends upon planning and then communicating with clients about the plans. This leads to satisfactory results for both the accountant and the client. Dissatisfied clients are a consequence of poor communication about priorities from the executive level of the accounting business.

Establishing priorities and communicating value depends upon having the right type of client. This requires the successful accounting business to use its limited time to serve clients that are most likely to understand and appreciate the expertise of the accounting firm. The accounting business must focus on a particular type of business—but not necessarily a specific industry. For example, the focus can be retail businesses or professional services companies or retired people or individuals with extensive investment interests. Anything that permits easily conveying the firm’s priorities and values for its clients. Clients that don’t fit the firm’s preferred profile create an unsustainable business. Accounting businesses will recognize this situation when too many hours are spent meeting too many goals of clients for which there has been little communication of priorities and value.

Accountants are always striving to implement effective prospecting systems for acquisition of new clients. Yet, much of the problem in an accounting business is too many clients. When starting an accounting business, client acquisition is obviously paramount. The firm will take all comers. But when this strategy continues, the business finds itself with the 80/20 problem. That is, twenty percent of the clients tend to take eighty percent of the time—but don’t provide any greater income. These are the high maintenance clients.

What are the signs that an accounting business has too many clients? The first indication that an accounting firm has too many clients is when there are clients who have never personally met the key executive of the firm—or one of the partners if the accounting business is a partnership. A client should recognize the chief executive of his accounting firm on sight. Having to state a name is cheating because ego leads to naming most accounting businesses after the accountant.

A successful accounting business has an executive with the job of knowing every client…or a group of executives who collectively know every client. Actually knowing the client requires awareness of the client’s sources of income, tax return status, income trend, and recent major life events. When an accounting firm has even one client that is not met with at least once per year, there are too many clients. In addition, an accounting business has too many clients if there is just one client who does not pay enough to cover his fair share of business costs.

Accountants want deeply meaningful relationships with their clients, who acknowledge delivery of truly valuable financial service. Accountants want to meet with clients and explain the collaborative effort required between accountant and client to perform accurate services. Accountants want income from every client that pays for a successful long-term relationship. Successful accountants make these things happen instead of dreaming about new clients. The successful accounting business does no mass marketing. Success in the accounting business comes from building relationships. A sure road to failure is buying clients from other accountants leaving the industry or from hiring accountants to bring books of business who have been unsuccessful in their own practices.

Accountants new to the business are mesmerized by the output of the veterans. Growing practices might be envied but few accountants want the long hours and constant worry about finding new clients. Veterans of the accounting business are tired. Most of the high growth accounting businesses do not want to continue the path they have followed. Achieving genuine success in the accounting business requires strategies with proven viability for the long-term. The universal truth about success is adapting an organization to quality service. Seeking shortcuts or failing to plan for success merely wastes the limited time available to create an accounting business for the optimal type of clients while working a reasonable number of hours. Success in the accounting business is realized when satisfied clients provide sustainable profits and eliminate pressure to find new prospects.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: