The challenge is clear… more than anything else, research shows that UK clients want their accountant (i.e. you) to be genuinely proactive.
The rewards for rising to the challenge are also clear – when you are genuinely proactive you will earn higher profits because your clients will be much happier, so they will buy many more of your services, willingly pay you higher fees and gladly give you more referrals.
Other firms have more have doubled their profits in this way, and you can almost certainly do the same.
But what exactly is “proactivity”?
Genuine proactivity is the essence of being a trusted adviser, and it requires four elements to be present:
- Unrequested – You must do things before you are asked to
- Relevant – The things you do must be relevant to the client
- Valuable – They must also be highly valuable to the client, and genuinely in the client’s best interests
- And there must be no charge in the first instance
Of course, this does not mean that you give everything away for free – after all, you have a business to run. Instead it means making preliminary recommendations for free, e.g. “I have taken a preliminary look and I think now could be a good time to incorporate your business – so I recommend you take a good look at all the pros and cons”.
You then earn your fees if your preliminary recommendations are so good that the client asks you to help them follow up. As a result, the more preliminary recommendations you make, and the better quality they are, the more help your clients will want and the higher your profits will be.
In addition, there is a fifth element that, although not compulsory, separates those who are really good at being proactive from those who are not:
- Systematic – Rather than leaving proactivity to chance, the real breakthrough comes when you develop systems for identifying and sharing proactive ideas, suggestions, advice and input so that every single client benefits fully from them.
The simple step-by-step way to be proactive
Many (but sadly not all) UK practices have risen to the challenge of being really proactive by using the following type of multi-step diagnostic review process:
- Step 1: Draw up a master list of your best ideas for improving a business’s sales, profits, cashflow, costs, productivity, tax bills, capital value and saleability, and the business owner’s personal wealth, tax position, work-life balance etc. Of course, not every idea will be right for every client, so you also need to identify the circumstances in which each idea is most relevant, and add those qualifying conditions to your master list too.
- Step 2: Before you talk to a client, compare their circumstances to your master list of ideas, and identify the ideas that are relevant to them.
- Step 3: Tell the client about the ideas that are (a) most relevant to their circumstances, and (b) could have the biggest positive impact on them.
- Step 4: Wherever possible, also do a preliminary quantification of the potential impact for the client – e.g. “My preliminary calculations suggest this could save you £28,000 in income tax”.
- Step 5: Make preliminary recommendations about the course of action that appears to be best for the client.
- Step 6: Do all the above proactively – even if your engagement letter doesn’t require you to – and without charging a fee. Instead…
- Step 7: Earn your fees when they ask you to help them implement or follow up on your preliminary recommendations.
- Step 8: If the client is happy, ask them for a referral.
- Step 9: Repeat steps 2-8 with every single client – not just with a favoured few. Whilst it may be sensible to start this process with clients you believe (a) are most likely to be receptive, or (b) where there is the greatest scope to make a difference, it is not fair to your other clients to stop there. Every client deserves this kind of proactive input – and many practices have found that their greatest successes with proactivity have come from the clients they least expected!
- Step 10: Use Steps 2 to 6 with prospects too. Since when you do you will greatly increase your chances of turning them into clients.
FREE TRAINING: To make doing this really easy for you Steve Pipe is running a Proactivity training day specifically to give you the practical insights, guidance and shortcuts you need to become more profitable by being more proactive. If you are a UK accountant in practice, thanks to generous sponsorship, you are invited to attend for free as his VIP guest. Click here for full details
Taking you to another level
Many accountants find that by using this type of diagnostic review process SYTEMATICALLY they are able to identify ways to put many thousands of pounds of extra cash into their clients’ personal and business bank accounts. In fact, very often the amounts involved add up to several hundreds of thousands of pounds per client.
It is not difficult to imagine the effect those sort of results have on clients’ lives, and also on their appreciation of and loyalty to their accountant. Nor is it difficult to imagine how attractive they make the practice to non-clients.
Clearly there are huge benefits to both the practice and its clients. And that is why some accountants go one step further and present their preliminary recommendations in a formal written “Key improvement possibilities report” that is tabled and discussed at the accounts finalisation meeting.
Making it work
But how do you square all this extra proactivity with an already very full workload and very tight budgets?
For successful practices there are four parts to the answer:
- They believe that service excellence cannot be optional, and that accountants have a duty to give their clients this kind of proactive input. So for them the question is not whether they should do it, but HOW are they going to do it? And the answer to that “how” question is that…
- They add the diagnostic review process to the accounts/audit completion checklist so that it is done by the in-charge rather than the partner
- They use specialised software so that the in-charge can carry out the review, and write the report, quickly and to the same standard as a partner
- They know that the fees they earn from helping clients to follow up on their preliminary recommendations will more than offset the time cost of being proactive in this way
The fundamental choice every accountant must make
Clients want and need their accountant to be much more proactive. The days of paying lip service to being proactive are over. Worryingly, however, the profession seems to be polarising.
Some firms are acting like ostriches by burying their heads in the sand, or kidding themselves that it doesn’t apply to them or that they are proactive enough already. This group appear to be in for tough times ahead as their clients become increasingly disillusioned and, as a consequence, their profits decline.
In the other camp, the firms that truly commit to becoming more proactive look set to:
- Have happier customers who are getting what they really want and need from their accountant
- Receive more referrals and win more clients from the other less proactive firms in their area
- Cross-sell more services as clients ask them to help implement their proactive recommendations
- Be able to command higher fees because they are delivering a better service
- Increase their GRF and profits and build a more valuable and respected business
- Enjoy being regarded as a truly valuable and trusted adviser
Which camp are you going to be in?
The free Proactivity training day I am running for you will:
- help you to decide, and
- make it easy for you by giving you all the practical insights, guidance and shortcuts you need to become more profitable by being more proactive
What would your clients want you to do?