Addressing the #1 challenge for accountants as economic woes hit
Richard Brewin • June 17, 2020
With the impact of a global pandemic followed swiftly by significant recession, an accounting firm’s skills, expertise and resources should be in high demand with their clients.
I’ve said on many occasions that most accountants are in the profession to help, to make a positive difference, and so they will be all too willing to step into the breach.
All well and good up until this point but what about billing for the work and getting paid? This is where traditionally accountants have failed to grab the commercial opportunity, have even suffered financially themselves as a result.
Of course, we are here to help. That’s a fundamental value embedded in most of our firms’ cultures. We’re not going to turn our backs on clients in need. But, often we do compromise on our fees far too readily. Here’s some points to consider as the pressures on clients mount:
- Not every client is in dire straits. Some will be flourishing and others will have some in reserve. A client being cautious is not a reason on its own to expect you to cut your fee.
- You shouldn’t be the automatic soft option. Clients have different ways to turn for funding. Have they used them? Have they tried hard enough to pay for your valuable service?
- You are fully entitled to have a conversation at the outset about how you are going to get paid. The later you leave it, the more your chances diminish.
- You don’t have to offer everyone credit. Payment upfront is perfectly legitimate in troubled times.
- The more flexible you can be, in your terms and methods of payment, the more likely you are to be able to maintain your fee level. You can trade-off between fee and credit terms, it’s a normal commercial conversation.
- Check where they are spending their money. Are other suppliers etc being asked to cut their prices? Are they still taking their full remuneration? Don’t be the only victim here.
- If you do decide to discount or give it away then let them know the reason and the value. Build up your credits.
- It’s your firm and your client relationship. You can be as flexible or as firm as you want to be. There is nothing wrong with supporting a good client in genuine hardship, its why you do what you do, but there is a big difference between that and avoiding a tricky conversation. Be commercial, plan your strategy, be prepared to stand up for yourself. Every pound you give away costs you and your family….does the client sitting opposite you deserve that sacrifice?
We’re in for a bumpy ride over the coming months, give yourself a fighting chance.
Look at any accounting firm website and there is a fair chance that the word ‘proactive’ will be prominent. Ask some business owners and taxpayers whether they consider their accountant to be proactive. There is commonly a gap between the two, between the intent of the accountant and the expectations of the client.
The tag ‘Trusted Advisor’ gets bandied around a lot. Without trying to be deliberately contentious, I often challenge its use. Undoubtedly, accountants were once the trusted advisor to their clients. When I came into the profession 44 years ago now, the older partners, especially, were seen by their clients as their trusted advisor, their ‘go to’ person on any issues, business, family or personal, that were troubling them. Without the filing deadlines of today, these clients were with their accountant primarily because they valued the relationship rather than the products.
All accountants are the same! We’ve all heard it said. It’s nonsense, of course, but, when you are asked what it is that your firm does that differentiates it from other accounting firms, it can be a challenge to come up with something tangible. Accounting firms tend to offer similar services, that’s what makes them accounting firms. Differentiating from competitors based upon services provided is therefore an issue.