Discovering the perfect accounting practice is much like searching for the Holy Grail – it is an epic quest with an elusive goal and with an outcome that is often undefined or defined incorrectly. And, if you search long enough you might conclude the perfect practice, like the Holy Grail, is simply a myth…an impossible endeavor…a pipe dream.
I am convinced the perfect practice is not a myth. In fact, I have seen it – the “Holy Grail” – many times during my 20 years training over 100,000 accountants. It isn’t common – and those who have built the perfect practice don’t often share the formula – but I have seen firms that have all the key characteristics of the perfect practice:
- A client base comprised of ideal clients who value the work you do, who seek your advice to better manage their businesses, who are loyal to your firm, who enthusiastically refer you to their peers, and who pay timely.
- A highly efficient, standardized process that maximizes production costs, democratizes the firm’s collective knowledge, and minimizes the cost of employee onboarding/turnover.
- A brand that is distinctive and based on a unique value proposition you effectively present to both your existing and your prospective clients.
- An infrastructure that leverages technology innovations and automation to scale bookkeeping and tax preparation services, while automating up to 80% of the manual entry process
- A team-driven culture where people align around a common vision, embrace healthy confrontation, hold each other accountable and value firm success over personal ambition.
Practices like these are obviously profitable, but their ultimate goal is not profit. Their ultimate goal is effectiveness. As Henry Ford famously stated, “A business must be run at a profit, else it will die. But, when anyone tries to run a business solely for profit, then also the business must die, for it no longer has a reason for existence.”
A perfect accounting practice exists to transform its clients. A practice that is focused on client transformation focuses on client-centric measurements, continually asking themselves questions like:
- Am I increasing my client’s wealth?
- Am I an integral part of my client’s decision-making process?
- Does my client perceive my services as an investment in the growth of their business, or am I’m perceived as overhead?
- How many of my clients write thank you notes to me for the difference I have made in their business?
- If a competitor approached my client tomorrow offering similar services at half the price, would the client stay with my practice?
As you are reading this I expect two things are coming to your mind:
- Of course I want a practice like the one described above and,
- I definitely want to make my clients more successful. It is safe to assume almost all accountants think this way.
But, that begs the question: If almost all accountants want these outcomes, why aren’t most accountants achieving these outcomes?
The answer is two-fold:
- First: there is a lack of adaptive capacity in our lives. Most accountants are so busy working in their practices they don’t take the time to work on their practices…a classic e-myth scenario.
- Second: there is a disconnect between what accountants want to achieve and the process to make it happen.
There is little I can do as an author or trainer to solve the e-myth problem. Acting with intentionality is an exercise of the will, not the mind. But, assuming you have the will…the intention…to create the perfect practice, I can train and coach you on the process. The process, or map, to the perfect practice involves five key sequential components:
No. 1. Specialization – Specialization is key because it enhances marketing/branding, it deepens subject matter expertise (by narrowing the scope of what you need to learn to generate small business success), and reduces variation of process.
No. 2. Standardization – Once you have narrowed the scope of the work you preform to a specific type of client, you can more easily standardize processes to support your clients, including: information gathering, data entry, and analytics.
Only through standardization can a firm create a consistency of client delivery systems, reduce the impact of employee turnover, and convert the collective knowledge of employees to firm-managed intellectual capital.
No. 3. Automation – Once you have standardized your processes, you are able to automate those processes through new, revolutionary technologies that eliminate up to 80 percent of manual entry. Small businesses have direct access to the same automation technologies as the accounting profession, but very few small businesses (as a percentage) are leveraging the value of these solutions. Even fewer are doing so in a holistic way.
This light adoption by small businesses gives accounting firms a powerful opportunity to deploy these solutions on behalf of their clients through outsourcing models. Back office automation applied to your bookkeeping practice, coupled with fixed fee pricing, will create extreme efficiencies at very high profit margins.
No. 4. Client Coaching – Once you own the bookkeeping process, you have access to the key financial information necessary to effectively coach your clients. As with bookkeeping services, technology is key to effective client coaching. Robust and affordable analysis solutions are emerging in the market, and these solutions integrate tightly with numerous general ledger products, allowing you to monitor key metrics and measurements on behalf of your clients and to do so in real time.
With coaching, specialization is key. Specialization leads to a greater depth of knowledge about your clients’ business operations, key performance indicators, and industry best practices. This depth of knowledge allows you to move beyond the numbers into a larger business development advisory role.
No. 5. Client Transformation – I often ask accountants to tell me about the products they offer. After a few blank stares, as the audience reconciles products to services, I will get the typical answers: bookkeeping, tax preparation, audit, financial statements, etc. Some attendees will hit closer to the mark with answers like: peace of mind, success, and coaching. Ultimately, the accountant’s product is the client. The perfect practice produces high quality clients whose businesses are stable, scalable, structured and sellable.
Obviously, building the perfect practice isn’t easy, and it doesn’t happen quickly. But, with a combination of intention and guidance, building this type of practice is achievable.
Author's note: If you want your practice to have the characteristics described in this article, I encourage you to explore Woodard Institute. Woodard Institute is a coaching community that guides motivated, intentioned accountants on their journey to the perfect practice. We do this through strategic coaching, practice skills training, support and deep peer connections. You can learn more about this path to the perfect practice at www.woodard.com/institute.
To watch the recording, visit the Woodard archives here.