21st Century Accountants: Which One Are You?

It has been well documented that the accounting profession is in a state of transition.  Moving from backwards looking, historic number crunchers, billing for time spent rather than value added, to real-time, cloud first, automated services.  Realising tangible benefits to their clients by offering valuable business advice.

Tech-savvy millennials and older generations are who are adopting to the change are challenging accountants to offer more than just compliance work.  The man down the pub has been replaced by infinitely knowledgeable internet (if you look in the right place!), meaning the entrepreneurs are better informed and equipped than ever.

21st Century Accounting Practices

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Accounting practices are now falling largely into 4 groups.  Which one is your firm in?  Is that where you want it to be?

Traditional Accountants

Traditional high street accounting practices, to whom small businesses and partnerships deliver a shoe box of receipts to annually (or quarterly if they’re VAT registered).  The vast majority of their clients come to them because they needed to comply with legislation rather than because they were seeking business advice.  Clients keep contact to a minimum as they know they’re being charged by the minute.

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Status

Like the manatee, they’re not quite extinct but they are defiantly on the endangered list.  Many will have faced challenges with RTI and AE and will be looking at the upcoming MTD legislation and contemplating early retirement.  Those who survive will be forced to lower their prices to compete for compliance work, or raise their advisory game to compete on quality.

Compliance Practices

These firms focus on maximum efficiency for a high number of relatively simple clients.  They are typically offering fixed monthly fees via menu pricing.  For example:

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The challenges for these firms will be increasing the number of clients serviced by each staff member and enticing new business to their practice.  Efficiency will be driven by strict processes and automating as many tasks as possible.  For example, direct bank feeds, bulk VAT processing and paperless offices.

Also falling into this category are practices servicing niche sectors of the market, such as temporary workers.  The clients differ in their needs, however the firms’ success by efficiency and sales is exactly the same.

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Status

The piranhas fight over the most competitive part of the market.  To date, these firms have expanded by offering cheaper, focused, value based pricing, drawing clients away from traditional firms…eating the weaker fish.  Once these disappear, the real battle begins!  In an effort to remain competitive, prices will be driven down and processes pushed harder and harder.

Business Advisors

Practices that have grown up in the cloud or firms where younger partners are replacing the older generation and have seen the changes coming.  These firms don’t avoid compliance work, however they see it as a lead to where the real value is; business advice.  Their entrepreneurial clients are looking to grow their business and are seeking advice on how to maximise their sales, reduce costs and improve cash flow and margins.

SME business owners trust their accountant more than anyone else for business advice and these enterprising firms are capitalising on this.  They guide their clients on which software to use, collaborating in real time using online applications.  Meetings can be held online; valuing their clients’ time.  Communication is regular, rather than just at compliance deadlines.

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Status

These Dolphins are smart, eloquent, hard-working and collaborative.  Their clients appreciate their knowledge and advice, treasuring value over cost.  As these practices continue to evolve they will grow stronger and more profitable.

The Big 4

The leaders of the accountancy, consultancy and advisory world, these mega-corporations have long seen the value in nurturing entrepreneurs to become the business leaders of tomorrow.  Successfully combing high value audit and taxation services that their rivals can only aspire to, with corporate finance, M&A and wealth planning work to bring in the big bucks.  But they don’t rest on their laurels, as demonstrated by KPMGs new small business collaboration with Xero and Deloitte recently overtaking PWC as the world’s largest accountancy firm.

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Status

As mighty apex predators, these are the practices that have been at the top of the food chain for as long as anyone can remember, swallowing up smaller rivals along the way.  Where they lead, others follow; in the accountancy world and related markets.

Summary

The accountancy world is evolving; big fish eating little fish and everyone looking for their own place in the financial ecosystem.  A better understanding of where you fit will help equip you to see where you need to be to achieve you goals, and help you plan a way of getting there.

Octopus Blue will help you to become a firm of the future, with software consultancy and advisory services designed to ensure your practice is efficient as possible.

Contact andy.bailey@octopusblueuk.com 07974 717713 to discuss further.

Slick Coaching and Deliberate Practice

Why should you go through the time and cost of finding a coach when you can read up on google, ask your mate or just teach yourself?  All you need is time and energy, right?

Skating Away

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As a teenager, on a school trip to Sheffield, I got the chance to go ice-skating for the first time.  I’d always loved the idea of playing ice-hockey, but with the nearest rink a 90-minute drive away I’d never really had the chance.  I tentatively stepped on to the ice.  Fell over.  Struggled up and clutched the side for grim death.  Slowly I shuffled around the edge, deeply enviously of my friends who had managed to stay up, effortlessly gliding away.

I tried again and again, falling over, getting up, clutching the side, falling over again for about an hour.  Exhausted, and having barely skating anywhere, it was time to leave.  I loved it!  When the chance came to go again I jumped at it…skating a little more confidently, a little quicker…falling over just as much but getting a teeny tiny bit better.  The nearest rink was still a long way from home, but I would go a few times a year, fall over and not getting any better.

The Next Generation

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Fast forward 20 years and I took my kids Jon (6) and Zoe (4) ice-skating one day in Manchester.  I was still hopeless, but as Dad I had to be an expert, puffing out my chest and showing them how it’s done!  We’d watched Peppa Pig practising, it was as simple as push, push glide!

Now there were several of us falling over, not getting anywhere, tired but still having fun.  It was clear we were not getting anywhere, nor would we.

New Year, New Challenge!

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Over Christmas, we were talking and Jon and Zoe said they would like to try something new.  As I now live just a few miles from an ice-skating rink I suggested ice skating classes and they agreed.  They started at level one with a fully qualified NISA coach who had them tip-toeing across the ice in minutes.  She showed them how to put their arms out wide to balance.  She taught them to their hands on their knees when they felt unsteady.  After about 20 minutes, she asked them to sit on the ice and practice standing up.  Of course, they fell over, but they were learning the skills they needed to develop.

Expert Coaching

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This is where the power of coaching comes in.  Most of us, with enough time and determination, can become ok at most things.  But is being ok good enough for your business and career?  Do you have enough time to do all the practice required?

When you studied at University were you sent to the library without guidance?  Or for your accounting qualifications were you given a bag of receipts, a pen and a calculator?

No.

That’s not to say you couldn’t have learnt something yourself…but how long would it take?  And how good would you really be?

In his book Outliers: The Story of Success, Malcolm Gladwell shares his thesis of the ‘10,000 hour Rule’.  (NB coincidently, one of his studies examined why the majority of Canadian Ice Hockey players were born in the first few months of the calendar year).   Put simply (and there is more to it than this) his claim is that to become an expert in anything, you must practice for 10,000 hours.

To put 10,000 hours into perspective, that’s the equivalent of 5 years full-time work.  Do you have that time on top of your day job?  K. Anders Ericsson (who’s research Malcolm Gladwell’s book was built on) in fact said you need to focus on Deliberate Practice.  In his 1993 paper, The Role of Deliberate Practice in the Acquisition of Expert Performance, he found that leaders typically took 10,000 hours of practice to become experts, but the differentiator was the Deliberate Practice, not just the time that was taken.

Deliberate Practice

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Ericsson found that stepping outside of your comfort zone, attempting activities beyond your current abilities, receiving feedback from a teacher and tweaking your performance was how experts developed their skills.

I could have spent 10,000 hours ice-skating and after a while, I probably wouldn’t fall over as often – I might even have some control.  But I would probably still lack the skills to quickly turn and adapt to play ice-hockey.  Any bad habits I’d picked up would still be there.

With just a few hours of coaching, Jon and Zoe are better than me already.  They’ve spent much less time on the ice, however, they are being taught by an expert.  They are deliberately learning certain skills.  I never practised tip-toeing.  And I only practised getting up because I fell over so often.

The Power of Coaching

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This is the supremacy of a great coach.  An expert in their domain.  A skilled communicator.  Someone with a passion for their area of knowledge.

A coach doesn’t take away the hard work required, but they can make sure that your hard work is not futile.  They will make lots of minor corrections to keep you on track.  Your coach will give you feedback on what you’re doing well, and where you need to practice to improve.

The same is true of a business coach.  Seek an expert in your industry.  Learn from their experience, from their mistakes.  Your coach will already have made and seen these same imperfections repeated hundreds of times.  Your coach will help you focus your efforts on deliberate practice.

Your coach will help you achieve your goals.

Octopus Blue

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Should Accountants Blog?

Content marketing is becoming a bit of a buzz phrase at the moment; happily taking its place next to “proactive” and “real time information” within the accountancy world. For anyone who has avoided it so far, content marketing is marketing that provides potential clients (or even current and past clients) with information that you believe they will find useful. This could be anything from a full-blown e-book to a simple infographic.

What will be my return on investment?

The tricky bit about content marketing is that it can be very hard to work out your return on investment. Placing an advert in your local paper or Yellow Pages is nice and simple. You hand over some money and if nobody calls then you’ve lost money and if people call then you can look at the number of leads and conversions and take things from there.

I would say that I have grown my bookkeeping business off the back of my blogs but even I couldn’t say what the return on investment has been. I have had experiences where I have posted a blog and the next day the phone has rung, but that’s generally not how it happens. Normally what happens is that I write a blog and then promote it across several social media platforms. A business owner comes across the blog on say a LinkedIn group; reading it takes them to my website and this process is repeated a couple of times. Then maybe one day they contact me. So, was it the blogs that won that client? Or LinkedIn? Or maybe even my website?

Your buyers are changing

As we often get too close to our own business, let’s use buying a holiday as an example. Depending on your age, not that long ago, when it came to booking a holiday you used to decide roughly where you wanted to go. Then you took a walk up to your local Lunn Poly on the high street, sat down at a desk and a member of staff found you a good deal. You trusted them that the hotel was a good one. You didn’t really question the flight times. I remember my parents buying a holiday and then coming home to find where we were going in the brochure such was their trust in what was being sold to them.

Most of us wouldn’t do that now. We’d Google the locations that we fancy visiting. Look on various price comparison sites for hotels and flights. Often tweaking dates and times to get the best price. Then it’s onto the review sites to see what other people thought of the hotel before, possibly, making a purchase.

If we happily put in so much effort into our holiday choice, why would we expect our potential clients to put less effort into choosing us? After all they will be entrusting us with their business and letting us see their bank statements and ultimately what difference is there between choosing a random accountant on Yellow Pages and picking a holiday from a list on Teletext? We’re in an age where we are surrounded by information and building trust is important but it takes time.

Blogs are a great way of building up a relationship with potential clients. They give you an opportunity to demonstrate your expertise and give people an idea of what it’s like to work with you and your firm. If you dabble with a bit of SEO and use questions as the heading (and starting point) of your blogs, then they will also begin to show up in search engines. This is very handy as quite often someone will ask Google a question thinking they need an answer when really, they need an accountant.

If you keep your blogs free from sales pitches, then you can almost see them as an extra staff member, working for free and long after you’ve first written them. Like a sales assistant in B&Q who comes over and explains what glue you need after spotting you staring at the display for slightly too long. They act as reassurance to your potential client that they’re about to make the right decision.

How to get started

If you believe that starting a blog is right for you, but you just don’t know where to start, first think of your niche market. Then make a list of problems that they might have.

We often forget that our potential clients don’t see engaging our services as the logical step in answering their query. The better you know your target market, the better you’ll be at knowing the problem they might be trying to solve and then guessing what their next step will be. Your blog will act as a way of steering them towards you, without directly telling them to do this. Remember this is trust and relationship building, not sales pitches.

An easy way to format a blog is to address: What is their problem? Why should they solve it? And finally, how can they solve it.

Once you have your chosen problem, you then need to use around 200 words on answering each question. So, it’s nice and simple and can actually be quite quick to do once you treat it as a system in the same way as you would do anything else within your accountancy firm.

My only further tip is to remember to promote your blogs across social media and possibly in your newsletter if you have them. And you never know; you may post just the one blog and get a call the next day. It has happened.

Claire Owen-Jones
Copyright Sian Trenberth Photography

Founder of Loud and Clear Accounting and freelance blog writer for accountancy and bookkeeping firms.

claireoj@loudandclearaccounting.co.uk
@loudandclearac

Mentors: Why? What? and How?

I saw a great question on Quora this week, which inspired this week’s blog:

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The product manager in me always likes to break questions like this into smaller pieces: Why? What? How?

Why Should You Seek a Mentor?

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Entrepreneurs looking to start or expand their business, accountants taking the leap from employee to partner, new or newly promoted leaders all benefit from the mentorship and guidance of an external advisor.

A mentor offers different support and guidance than that of your manager as they can rise above the day to day running of the business and provide focus for personal and strategic goals.  They may or may not work for the same organisation as you, however it’s important they don’t work directly with you to avoid any conflict with you daily duties.

What Should You Look for in a Great Mentor?

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You need to be able to relate to your mentor and build a rapport – this will be an ongoing relationship and you need to be comfortable talking with them and trusting them.

A good mentor will help you see the short term hurdles you are facing and how to approach them.  A GREAT mentor will guide you to find your own answers to the challenges you face now and in the future, and equip you with the tools and confidence you need to excel.  Expect them to push you outside of your comfort zone.

DO ask your mentor about your goals.  Tell them what you want to achieve.  Together you will formulate a plan and set regular meetings or calls to go through your actions.

DO NOT expect your mentor to do this for you- they are your guidance; you still need to put in the hard work.

How Can I find A Mentor?

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Start by looking through your contact book; people you have worked for/with, those who you admire and aspire to be like. Your mentor needs to be someone you relate to, and maybe an expert in your industry.  It is, however, more important that you can talk openly with your mentor and are inspired by them than it is that you have similar professions.

You can also look to professional mentors, like myself, who have lead teams at accountancy practices and software companies, from start-ups to international companies. They can help guide you through the launch and expansion of your business.  Prices vary, but as with most things in life, you get what you pay for.

Face to face meetings are great, but with high-quality internet connections and Skype, WebEx or similar conferences tools freely available it is no longer a pre-requisite.  Don’t be constrained to just looking in your immediate area.

Professional mentors will usually have a strong social media and internet presence.  Don’t be afraid to do a little research on them – LinkedIn is great for professional background, Twitter and Facebook for learning more about their personality, and blogs and articles to find out their particular expertise.

Summary

Finding a great mentor can provide a tangible boost to your business or professional career.  They will be a trusted advisor to support and guide you through the challenges you face.  Look for someone you trust, respect and aspire to be like, whether they be an existing friend or colleague, or a professional mentor.

What tips do you have for others?  Tell me about your mentoring experiences in the comments below.

Octopus Blue will help you to expand your business network, with consultancy and advisory services to help define and monitor your company vision and mentoring services to assist you and your team achieve them.

Contact andy.bailey@octopusblueuk.com 07974 717713 to discuss further.