Emerging 2021 Trends

I have attended and spoken at a number of practice management webinars of late and one of the areas where consensus has emerged is that those firms that will come out the healthiest from the pandemic will be those who act as though it will not end. 

Over the course of this and the forthcoming two newsletters we are going to look at six areas of significance that are resonating around the profession. In this issue we will take a look at the first two.

1. Ongoing importance of investing in technology

I know, this is obvious and I acknowledge that everyone understands this. Some eight years ago I lectured for the ICAEW (English Institute) at their annual practice management conference. While speaking I directed firms to ensure that they had developed and understanding and expertise in 3-4 online service providers. I seem to recall mentioning Xero and Sage as possibilities. However, during the subsequent breakout group I was taken to task by one accountant who told me “Mark, you are wrong”. I have learnt in life that when someone disagrees with me this is likely to be an opportunity for a great learning opportunity. So, I duly enquired, “Why is that?” The response was illuminating in that she explained how Xero had sent out over 250 agent updates in the last year. Now come forward to March 2019 when all UK VAT registered businesses were required to register and submit returns electronically. I duly registered and was shown a list of more than 80 companies that I could use for online accounting and digital VAT submission. What a challenge for anyone to be au fait with that many! No, realistically that is surely not possible? Besides I would not mind betting that some of those platform providers did not work as they should. Some, maybe have subsequently withdrawn from the marketplace only to be replaced by other aspiring tech service providers. Ans yet, we all see technology as a major partner and not a disrupter. We must engage with technology and the real time data it provides. This enables us to exploit the opportunities it affords to deliver not just those rear-view mirror compliance necessities of life but advance to forward looking, real time analysis and advice. Your clients are, after all, focussed on managing their businesses and endeavouring to sift through myriad reports and data is unlikely to feature at the top of their agenda. 

Key Marketing Point: Gale Crossley, Crossley and Company makes a valid marketing point that we should use the tools that technology offers to drive demand beyond the firm’s existing geographic boundaries. For example, online meeting platforms enable meetings to be easily scheduled. The past year has evidenced that face to face meetings are now accepted as not being a necessity. I have clients in almost every time zone and accept that meeting in other people’s time zones is a business courtesy. One recent meeting took place with a client in Sydney, there is currently an 11 hour time difference but still the meeting took place at 8am their time.

Joris Van Der Gucht, Silverfin, makes it clear that “there is ever increasingly complex global tax, standards and auditing legislation accompanied by government requirements to comply and make tax digital. Technology has a vital role to play in so many areas.”

2. The development of revenue streams from business advisory services

How important is the development of a robust range of business advisory services? Very. Fraser Campbell – UK head of Business Advisory Services, Azets (who act for 100,000 UK SME clients and have 3,500 staff across UK, tells it like this “we find clients increasingly relying on us, and the pandemic has only served to accelerate that reliance”.  

Let me state clearly, not for the first time, that I do not doubt that you give business advice – of course you do – all accountants do in their role as trusted business advisor. But, if you were to review your invoices for the last 12 months (which I accept has been a most unusual period) what is the value you have separately invoiced for such advice? Or is this all wrapped up in the compliance work account – for example, maybe described as ‘sundry advice from time to time’? Is that wrong, you might ask? Well ‘yes’ and ‘no’. Yes, inasmuch as you provided advice but ‘no’ in that you could, and possibly, should have approached giving this advice in a different manner. Let’s explore further.

Planning a separate advisory meeting
When your client comes in for a [compliance] meeting they leave behind their busy schedule of calls, meetings, emails, tweets etc. to meet and discuss matters appertaining to compliance. They meet with you, typically for an average of 60-80 minutes (source: SAICA survey, 2017). During that meeting you exchange personal greetings and social conversation before addressing the reason(s) for the meeting – i.e., compliance. The time given over to business advice is therefore limited. Maybe the client might not have been expecting to discuss matters beyond compliance. You then say your farewells and your client leaves only to find messages, calls and emails that demand attention. The great advice and insight you offered fades into the background due to the demands of their day. Your input reinforces that you are a great accountant but maybe does not fully address or solve issues arising. The solution? Use the compliance meeting to identify areas where advice is necessary and then agree a time and date to meet. Maybe the client needs to undertake some preparation, maybe you need to as well. Perhaps others should attend, spouse, co-director or manager? 

The key advantages of this approach:

  • The client is committed to seeing this meeting as a priority and one that meets expressed needs
  • The client is going to take your advice seriously
  • The client will understand that a separate price must be agreed for this advice
  • You are positioning yourself as an important adviser to the client beyond compliance

Key Recommend: It is time to move on from telling the client the price is based on hours. No one wants to hear that. Quote a fixed price, or if you must, quote a range but ensure that the lower and upper numbers are no more than 15 per cent apart

Key Point 1: We must do all we can to avoid FTI – that is Failure to Implement. I strongly believe that if the client agrees on a course of action you must hold them to account for implementation on their part. 

Key Point 2: Make sure you read the accompanying article which highlights the importance of generating higher value charge hours.

Key Point 3: One approach to starting a business advisory meeting is to ask great questions. For example: 

  • How concerned are you about the future of the business? 
  • How do you see the business developing?
  • Is there an agreed plan and is the management team all pulling in the same direction? 
  • Does the business have a plan for the next 12 months?
  • What are your competitors doing that are a threat to you?

Key Action: Calculate the value of business advisory in the last twelve month and adding in a good degree of stretch set your goals for the forthcoming year. Then, monitor monthly and hold everyone accountable.

Key Warning/Observation: In the accompanying article I described technology as a strategic partner. It is, but it also represents a threat as technology develops the increasing ability to perform compliance. This is just another reason for developing a business advisory plan including: service portfolio, people, training, marketing, management, success and accountability strategies.

In our next issue we will explore further the next two key emerging trends.