Staff not only look at what firm leaders do – they follow their example
There is an ancient proverb that informs us that ‘The fish rots from the head.’ The source of this insight is not known for certain. Some suggest its origins are in China while others speculate that this comes from the Greeks or the Turks. However, there is no definitive proof.
This emanates from the idea that after is fish is caught and killed, it first begins to spoil at the head. However, some biologists say that this is not factual. They say that the first part of a fish to go bad is its intestinal system.
Regardless, it is now a common metaphor to argue in favour of good leadership for businesses and other groups. It means that if the person in charge of something is bad at his or her job, no one working under that person will be able to do a good job either.
Reference was recently made in the UK when a senior government minister resigned as a result of an affair he was having was made public. Boris Johnson, the UK Prime Minister did little other than initially suggest that he did not intend to take any action against the Health Secretary. Others, recognising that he himself had a history of affairs declined to sack his Minister. This was immediately leapt on and guess what? Reference was made to this very same proverb. His authority to take action as a result of his own behaviour and infidelities.
Key Point: Be timely. Keep your time records up-to-date – daily. Bill promptly. Respond to issues promptly. Staff will see how the owner team conducts themselves and will follow their example. Conversely, fail in these areas and staff then will have permission to fail as well. The fish rots from the head!
Set a good example
Over the years I have encountered a number of situations where lock up (debtors/receivables and work in progress at realisable value) are in excess of 25% of annual revenues. In my last article on this subject we started to look at a range of Key Facts and Key Challenges. From these I derived a number of conclusions in particular that technology companies do not deliver a personal assurance service but they do deliver on a timely basis. The reasons for my focus on lock up is that it is evidence of the timeliness of service. Lock up of 15 per cent or less is clear evidence that timeliness of service is embedded in the firm’s culture, systems and processes. 25 per cent or more is evidence that indicates that this is a battle ground. Win this battle and your future is more assured. In the middle ground the challenge is to ensure that lock up reduces and not increases.
The bad news: Where firms have high levels of WIP there is normally a high level of receivables. Iike it or not there is a correlation between the length of time it takes to complete a job and the time the client takes to pay.
The good news: This is all very fixable. Old habits die hard, but they can be put to the sword.
Stop blaming the client – take control
“My clients just do not give us the records when we want them” is a frequent lament I hear from accountants. As one finger is pointed at the client, remember there are three pointing back at you! Further, I have always believed that it is processes that should be fixed in business – not people.
Lesson one: from the flight deck
When learning to fly a plane (I started, but never managed to pass my PPL), the flight instructor makes a statement that can be heard in every cockpit – yes including the A380 and Dreamliner: “You have control.” After a moment of exhilaration that control of the plane is now theirs, the flight student responds “I have control”. Can you say the same about the flow of work in your firm?
Key question: Are you in control of the firm or is the firm in control of you?
Lesson two: from the car dealership service desk
Book in for a service, and you will be required to bring your car at a specific time and on an agreed day. That’s just the way the system [process] works.
Contrast that with what happens in some accountancy offices, where the client turns up, possibly unexpectedly, with the records – which may or may not be complete.
Why does this happen?
The fact is that once the year end is complete, the client is focused on the here and now of the first day of the new year. While collating the records for the accountant is on the “To Do” list, it’s probably not very close to the top.
Key Steps: to ensure a timely delivery of records and put you in control
- Three months before the client’s financial year end: Write to them detailing the individual records required. This should be a client-specific list. In this letter, you should state the date the records should be received.
- New clients: Include this date in your Letter of Engagement
- One week before the records are due in: Send an automated text message to remind the client that the books and records are due in.
- On receipt: Check that all the necessary records have been received. If not, put a member of staff (this could be undertaken by someone in admin.) on the job of record chasing.
- When job starts: Let the client know who they can expect a call from when further information is required.
- Diarise appointments with all those who are involved in signing off the job. Manager. Partner. Client
Key lessons: Just like the car service manager department, make a time and date for the records to come in AND make sure you have staff ready to “service” the client’s records.
Take a sample of 5-10 jobs and track how long the records were in your office from the date received to the date the job was billed. Then look at the number of days the job was worked on. Then set a benchmark for staff to attain for job turn around.