“Become the Firm of the Future - hurry up!!”
This is what I hear at every trade show, in every industry-based newsletter, and in every other type of messaging to accountants right now. “The industry is changing - be a Trusted Advisor! Do it right away!”
That’s great, and I believe it. But it feels as though the industry is drowning in this message. How do we actually get there? The answer involves your business processes.
Business Process Design
Wow, that’s a horribly boring subject you say. But wait! If you’re working in a firm, and you’re trying to implement change — trying very hard to become a Firm of the Future—then how are you getting there? You can make that a goal; you can even break those into smaller, more concrete goals, but the only efficient way to actually change your firm is through careful Business Process Design.
By turning your work into processes, you can easily communicate and train your employees on those processes. You will also have an easy way to analyze the ROI on those processes, and then a roadmap for turning the work result into products and services that you can sell to your clients at a Fixed Fee.
Business Process Management has its origins in the Industrial Age, when assembly line work led to a need for standardization. Task productivity on the factory floor led directly to cost reductions. Fast forward 150 years to the 1980s and Total Quality Management and ISO 9000 help businesses become more streamlined. This improved the work product as it introduced cross functional teams, and placed the emphasis on “how” to do a task, as opposed to “why.” Twenty years later and the Six Sigma data driven approach is an institution. Indeed, at my first job ever, way back in high school, I was given the written procedure for how to salt fries: Make an “M” across the fries with the shaker. Concrete, measurable, clear.McDonald’s knew early that making profit meant being streamlined, and that meant making our jobs efficient. I learned a ton at that job by the way, and most of it had to do with the importance of efficiency. Being efficient worked, and it was better for the employees and the customer.
If your business has a process for performing all of its functions, then those functions can be measured; ROI can be determined; new employees can be trained easily; and most importantly, the business can more easily adapt because new technologies or services can be fitted into the current structure with ease. Work functions can be assigned across teams and disparate entities can perform as one.
But how can an accounting firm practically implement some of this wisdom while remaining flexible enough to meet the needs of their unique clients?
It’s a good question.
Any service organization must be attentive to the individual needs of their clients. And let’s be honest, an accounting firm is a service organization at heart, and like every service organization,the way to control profit is to productize. And I would venture to bet that if you look across the landscape of your clients, the advising services they need are generally the same: ensuring their business has a workable business model with enough cash to sustain itself, translating that business model to a financial plan, establishing growth goals, tracking and measuring the goals, and always adjusting while staying on course.
In the age of advanced technology, where much of the service work that was formerly done by bookkeepers and accountants can now be done by user friendly software, the accounting firm must differentiate itself by providing something more. The “more” must come in the form of business consulting, and to make this profitable, it must be efficient. The way to make a new service efficient and profitable is to turn it into a process. The resultant effort of that process can then be sold as a product.
Where to start?
In next month’s post I’ll get more specific about how to establish these processes. In the meantime, start by writing down the main deliverables you want to offer your customers. In the age of the accountant as Trusted Advisor those deliverables might not feel like traditional ones. But adjusting your business by adding the right services, and embracing the financial needs of your clients can completely change your business for the better. Offering the right financial management services, in a systemized process, will allow you to grow your practice and take it to the next level.
Remember that your customers already look to you as their trusted advisor. You are the most intimate with their financial information and that data is at the heart of their business. They want your advice! You simply have to set yourself up to provide it efficiently.