If you embrace change, coronavirus means there has never been a better time to be an accountant in practice, believes Will Farnell.
Coronavirus has upped opportunities for firms ready to support clients in what could be a brave new world.
In the first of a new series, leading practitioner Will Farnell FCCA outlines how he can help practices willing to embrace change and build a new strategy by focusing on:
process and marketing.
For some years now we have witnessed technology and process re-design change industries beyond recognition. It is nearly 13 years since I set up my firm Farnell Clarke. Back in 2007 I wanted to change the way professional services (and accounting services particularly) were viewed and perceived by users of these services. I wanted to make accountancy simple and easy.
I was committed to making what we did different from others in our profession, and to achieve my aim of making accountancy simple and easy I considered every part of what I did - from fee structure to the service we provided, from the way I positioned myself and my brand through to the technology we might use.
You may already know my story, while others won’t. Farnell Clarke has since grown substantially, averaging 35% year on year growth and our team is now 50 people across three offices. Our mission remains the same – to make accountancy simple and easy. For me personally it's now also to help other firms make it simple and easy for their clients too.
While I am proud of many things our firm has done, it was our early adoption of technology that contributed most to our growth. Back in 2008, we partnered with KashFlow and by the end of 2009 every client was using KashFlow, making us one of the first 100% cloud practices globally. Today we are a Xero-based firm.
Around this time two years ago I published my book ‘The Digital Firm’. I set out to produce a blueprint for firms looking to digitally transform their practice and I’m delighted to have heard from many firms who say the book has helped their thinking. This is the first of eight articles over the coming months which will share a) some of my thinking from the book and b) some of my more recent experiences.
Few thrive on change; many spend their lives doing everything they can, not to change. If there was a scale of 1-10, one being' I’m never changing anything' and ten being 'I want something new every day', where would you be? For me it’s a nine: some change is pointless and not worth the effort, but I am one of those that thrive on change. I often find myself actively looking for something to change!
Change in a business requires change of so many components: values, beliefs, traditions, personalities and attitudes to name just a few. Changing just one of these is tough but to shift them all highlights why it is so hard and for so many the short-term pain is simply too much and it is too easy to carry on as we were.
Most change therefore requires a catalyst to make it happen.
Catalyst for change
In late 2018 I was busy speaking at accounting conferences and events around the UK and I talked about what I saw as a ‘once in a generation opportunity to fundamentally change what we did and how we did it’. HMRC simply called it MTD. Some used the prospect of MTD to make changes to their firms. However, HMRC took its foot off the gas and MTD failed to be the catalyst I, and many others, thought it might be.
Fast forward to March 2020, a global pandemic may have provided the catalyst. Firms across the UK immediately switching to remote working, relying on technology to deliver this somewhat alien way of working. Clients were desperate for up-to-date financial information to support cash flow forecasting, CBILs applications and decisions on who to furlough. These are terms that meant nothing to most of us until the pandemic hit.
In a short period of time, many firms may have seen first-hand the value of delivering regular bookkeeping for their clients. They may have seen that letting staff work from home was not as frightening as they had imagined, maybe even more productive than the team being in the office. The big question of course is, once we don’t have to work this way will we continue or revert to form?
What else has worked for you and your firm during the coronavirus lockdown? Whilst our firm was well placed for remote working (we offered it anyway), for me, after a number of years talking to my team about advisory and what it means, in the bat of an eyelid staff from junior trainees right through the ranks have seen what advisory really means.
Clients have called and asked them questions about different areas of their business that go beyond questions about their VAT return or their year-end accounts. Advisory is, after all, simply having great relationships with your clients so we as accountants become the first port of call for any question a client has. My team had never quite seen the reality of this before as anything beyond the day-to-day work usually gets delivered by someone usually more senior in most firms!
For those firms that are committed to using what they have learnt during the lockdown to adapt their business model, I hope the seven articles which follow will provide some ideas and inspiration, for what I believe being a digital firm really means.
In my book I talk about the digital firm wheel, which will form the basis of future articles. We will discuss what client experience really means and why it is so important for firms that want to genuinely see a competitive advantage when it comes to service level. Providing good client service is no longer enough.
I will talk about pricing, my favourite topic because I was so very bad at it! How do we price what we are worth and ensure that clients buy based on what we can deliver rather than on the prospective invoice value? We will discuss the importance of data and why I believe accountants should be delivering daily bookkeeping to ensure we have the data we need to deliver real business advice to our clients. How we can use our knowledge of the client to deliver new services like HR, App Advisory and much more?
Those that have heard me speak over the last 18 months or so will know that I often say there has never been a better time to be an accountant in practice; coronavirus has not changed this - it has simply upped the opportunities for those firms ready to support clients in what could be a brave new world.
There will be a strong focus on practice development; many practitioners strive to deliver exceptional client service, but often at the cost of their own profitability. Whether we are looking at better profitability through increased prices or greater levels of efficiency and effectiveness, what we will be talking about is new strategies. The first step in any strategic project is to know where you are now and where you want to be.
Consider the following actions before my next article:
Establish clarity on your client base. Identify each client, what they pay you for, what you deliver for them (and perhaps what you had originally planned on delivering for them), the fee you charge and finally add a ranking to each client as A, B, C or D. A being your perfect client and D being you wish they were not a client!
If you have not done so, set some 12 month and three-year objectives for where you want your firm to be. This could be increased revenue; it may just be making your firm more profitable with your current client base or it could be improved efficiency to let you reduce the hours you have to work. Spending time thinking about where we want to be is so important, as without this clarity we have no idea of where to go.
Many firm owners recommend such steps to clients – but don’t always practise what they preach…
In the next article we will focus on pricing. I will share some of the steps we went through at Farnell Clarke in re-pricing our entire client base and you may be pleasantly surprised at some of the results.
In the meantime, good luck with the actions in assessing your client base!