To cherish means to hold dear, to be treasured or valued. As accounting professionals, we go into this profession to help our clients thrive, and the ultimate goal is that they feel we have provided them with the value they paid for. The foundation for becoming a cherished advisor is how you develop and manage your relationship with your client. This interaction between accountants and clients goes beyond cloud technology, data, and figures. It is about delivering value that a client needs from you as an accounting professional, such that the client can't imagine not having you as part of the business. You are that crucial to their success.

Many accountants offer the same type of tax and financial reports that you can, but what makes you a cherished advisor is that you become an integral part of the client's operations. Your client seeks you out for advice and counsel to help make the real business decisions that he or she needs help with during the month. He or she is invested in your insight because you offer advice about their business through a different lens.

Another way to think about being a cherished advisor is moving away from tangible services to intangible ones. A tangible service is something your client can see, like a financial report or tax report. The intangible is the learning you do about your client's business—not only knowing the financial side, but also understanding the client's operations—this creates differentiation in your services.

Many kinds of skills are needed to provide services beyond the financial statements. The skills often are dictated by the client's industry, but many apply across the board. Some of the required skills are communication, analysis, leadership, problem-solving, collaboration, and teamwork. You can often develop these through personal improvement, continuous education, and hands-on learning.

For example, in your role as a cherished advisor, you become more engrossed in the client's business operations. For instance, you may gain a clear understanding of the client's inventory, and from that you may be able to pinpoint problems of oversupply that the client wouldn't have recognized as the reason for the high inventory value on their balance sheet. By pointing out the inventory issue and offering a solution, you can help the client overcome a financial obstacle. The client does not necessarily see the time and effort you put into learning about their inventory operations, but he or she will see the end results by getting a more complete analysis of their financial statements on which they can take action.

DOCUMENTING THE BUSINESS PROCESSES

As discussed in Chapter 2, “Bringing the Human Side to Technology,” there is a process you should follow to help identify the right accounting platform for your chosen vertical industry niche. However, before you take the steps to implement your chosen platform, you need to document the client's business processes. This documentation will provide a map you can follow to learn where the gaps are and what needs the most attention when implementing new technology.

Documenting the processes and business practices also creates a template that you can use as a benchmark for all possible future clients in that vertical industry. In the beginning of a client relationship, it is important to conduct on-site or remote meetings and observations in order to witness how each department is involved with the daily business operations and how they affect financial outcomes.

OBTAINING NEEDED TECHNICAL AND BUSINESS SKILLS

Once you document the client's entire business process, then you can move onto the next stage: identifying the extra technical and business skills you need to best serve your client. A cherished advisor requires skills that go beyond basic accounting principles and software platforms. Your intangible services include in-depth knowledge in the business operations. For example:

Technical Skills:

• Cost accounting
• Business planning
• Cash flow management
• Budgeting
• Financial statement analysis versus traditional tax compliance
• Write-up and payroll

Business Skills:

• Process improvement
• Project management
• Forecasting
• Analysis communication
• Sales and marketing

The learning begins here in order to shift how you deliver services. It is sometimes hard to move beyond the mind-set of staying with what you know to making the decision to become a beginner again and attain the technical and business skills needed to become a cherished advisor.

By documenting the business process, you can also better identify the areas where you need improvement or further education (either because you are a novice or have some experience but need more). There are several ways to do this, including the following:

• Take Additional Classes Through an Association or Community College

  You can also attend classes at either a university (online or in-person) or at day or weeklong continuing education programs. There are many courses offered in adult learning programs at college institutions on the technical and business skills listed above. Set a goal of taking at least one course a quarter or in a weekend or night program to help develop these skills. Additionally, most national accounting organizations like the American Institute of Certified Public Accountants (AICPA, at aicpa.org) and the Certified Global Management Accountant (CGMA, at cgma.org) also offer training programs and certification programs you can take advantage of to learn these skills.

• Reach Out to the Business Community

  Devote time to visit other small businesses owners in your community and interview them about their stores, their goals, their challenges, and their successes. This can help you polish your interaction skills with potential clients as well as practice methods to receive information and offer insight.

• Enlist a Mentor

  Find an individual in your industry with the expertise you need. You can also join industry-related social media groups on LinkedIn and Facebook and ask questions on these forums. You can select people whom you respect for their knowledge and offer to pay them as a “coach” on your first engagements so you have someone to ask questions. This investment would be similar to paying for classes or courses, but it provides you access to someone who has the experience you are looking for and who will be available to you when you need him or her.

• Use Your Audit Experience

  Many of us start out in audit or tax in our accounting careers. I have found that my audit experience has been invaluable in helping me to be a good advisor. The skills you learn as an auditor can be put to good use in this service line. Knowing how to investigate discrepancies, question staff on their business processes, and understand internal controls and operational activities such as inventory management will provide the knowledge that will assist you in an advisory role.

• Get Certified

  Many software vendors have developed their own educational programs to help you become proficient on their software. These curriculums are often included in the partner programs you sign up for. Take advantage of these valuable resources and spend the right amount of time learning the software and understanding what that software solves for your clients or yourself. This is a time investment that is necessary and pays off in the future. It's harder to try to figure it out on your own, plus it will take you more time, instead of allowing yourself to be walked through step by step. Plus, you can advertise your certifications as additional qualifications to potential clients.

• Get Hands-on Experience

  Reach out to other industry colleagues or businesses in the same field as your vertical industry niche and ask to do work for them. When I started my practice, I looked for other advisors in my area and offered my services on a per diem basis. This allowed me to learn what the engagements were like, what questions clients ask and how to do the work. You can ask to shadow on specific engagements you want to learn, such as budgeting, cash-flow planning, client engagement, or sales presentations. In exchange, you can offer your accounting services either as a direct trade or at a discounted rate, since this is a learning opportunity for you.

You will soon find that every client has different needs or wants to have different levels of involvement. Hands-on learning will help you to identify any knowledge gaps you may have, so that you can fill them either by gaining experience doing the work or by taking classes that apply to your needs.

NEW STAFFING MODEL

The next step in your learning process is to structure how you create job descriptions and organize the staff in your practice. It's an opportunity to create a new way for people to work together as teams, collaborate, and learn from each other.

The rapidly changing workforce has created an ideal opportunity to make these changes internally. Today, approximately 70 percent of the workforce are millennials—those born between 1983 and 1999. This group offers many of the key characteristics your team needs to succeed. For instance, millennials are more engaged in emerging technology than any group of workers. A report from PricewaterhouseCoopers (PwC) entitled “Millennials at Work: Reshaping the Workplace” found that 59 percent of millennials often look at a potential employer's provision of technology when considering employment, and 78 percent said using technology they like makes them more effective.¹

Millennials are also looking for opportunities to grow. They are not necessarily motivated to climb to the top of a firm, but they do want a chance to expand their knowledge, have diversity in their teams, and have accessibility to mentors.

The important part is to value the various skills that the different generations have in the firm and take advantage of what each can provide for the future. Businesses need both introverts and extroverts to fully succeed—this can help accounting firms address areas that they have not pursued previously and in the process tap into new opportunities with technology and social platforms.

The first thing that will attract the cloud generation is your firm having a clear purpose as a business. Accounting firms in the compliance era may have taken any client that came in the door, regardless of the segment they served. As the PwC report mentioned previously shows, millennials prefer to feel they have a mission they believe in that excites them about coming to work. Yes, cloud technology is attractive, but many of the ways that firms are currently structured are not.

Look at the traditional staffing model in a firm: entry level associate to senior associate to manager to senior manager to partner. The research shows that this model does not attract millennials. Many are not interested in becoming a partner or climbing a “corporate ladder.” This generation doesn't want to work to just work or to try to attain a title—they want to ensure the work that they do gives them purpose.

We can change how firms attract new talent by bringing down the walls of how things used to be done. A collaborative culture can be created in which everyone works together as a team with a focus on rebuilding the client relationship. As we refocus our firms on what excites a new generation, we in essence, attract and groom cherished advisors of the future.

We can do this by combining talent and cloud technology together to create different industry segments within a practice, where you can specialize in certain industries or even certain service offerings under that umbrella. This way, you can broaden your offerings and have the opportunity to create client–accountant relationships that haven't existed in the majority of practices in almost a generation.

Millennials often approach collaboration from a different perspective than prior generations. They are much more comfortable working together and collaborating to accomplish a goal than doing it in a silo. I have children and family members in this age group, and I have witnessed this work dynamic up close. One time, my son and his cousin were playing the same game on their phones. They were sitting together, but not talking. My son got stuck at one point and couldn't get to the next level, so he turned to his cousin for help. With some guidance, he was able to move up to the next level and continue with the game.

Afterwards, I asked him if he felt he had accomplished the game's task. He said he had. When I was growing up, I would have never thought this way. If I didn't get to the next level by myself, I didn't feel a sense of accomplishment. But my son doesn't see things the same way as I did. The fact that he needed to consult with his cousin—and tap into his experience and insight—did not matter.

Another advantage of the millennial team building is that you can cultivate different expertise in different vertical niches. For example, your team for health and wellness clients may include different members than for your retail or nonprofit clients. This makes your teams more specialized in each particular industry, since the team's knowledge grows as they handle more and more clients within that segment. Your teams will begin to have benchmarks operationally and financially of other clients they deal with in the same space; this allows you to promote your firm as providing specialized experts in that particular industry, thus providing more value to your clients.

This vertical industry niche staffing approach also helps team members contribute their strengths to a larger effort, which helps improve efficiency and overall morale because he or she can see how their role supports the entire team and how it contributes to the larger effort of supporting the client. For instance, one member might be responsible for data entry, while another may oversee journal entry and coding. Another may manage cash flow and budget planning, while someone else fills the role of customer success manager, whose job it is to communicate with the client the findings and analysis of the team.

Standard Niche Team Roles

Each vertical-industry niche team had a bookkeeper, accountant, advisor, and customer success manager (CSM). If you don't have that many people working in your firm, one person may be doing more than one role: the business owner may be the CSM, and/or you may be outsourcing certain functions outside of your firm. See Figure 3.1 for an example of a typical collaborative staffing model.

Here are the roles and what they do:

• Bookkeeper (BKR). The bookkeeper ensures all the automated data flows properly between the accounting systems and any other applications, or the client's online banking. Imported transactions need to be checked for accounting accuracy and to ensure no duplication or transactions deleted. Transactions also have to be entered that were not automatically recorded by the systems. Any transactions that need to be sent or monitored for approvals by the client would be handled by the Bookkeeper as well.
• Accountant (ACT). The accountant reviews the data for accuracy and proper presentation of the numbers. He or she will make any necessary journal entries and create a reporting package for the client.
• Advisor (ADV). The advisor reviews what happened in the financials and interviews the clients to understand variances and make recommendations. He or she prepares budgeting or cash flow forecasting for the client and reviews supporting data to ensure they can keep the client on track throughout the year.
• Customer success manager (CSM). The CSM takes the information prepared by the vertical industry niche team and communicates the results to the client. Rather than everyone in the firm speaking to a client, there is a team to prepare the data and collaborate and only one person who develops and nurtures the relationship. This way the client can receive individualized attention and not feel overwhelmed from having to communicate with a different person every time. The CSM also catches any issues in the relationship early on that he or she can solve and identifies other services the firm can offer, too.

Operations Team

The operations team consists of an information technology (IT) group, administrators, and partners. Rather than having each person set up new accounting files, you can centralize nonbillable work with the most qualified people. See Figure 3.2 for an example.

Here are the roles and what they do:

• IT group (IT). The IT group creates new accounting files for clients, gets the integrations working, and ensures that all the reporting templates needed are in the file. Additionally, any tickets from the teams go through this group, and if the group can't answer the question, they centralize calling support from the various vendors being used, instead of everyone calling for support. This work can be outsourced if your firm doesn't have the budget to hire internally, as there are plenty of businesses that offer that support for a fee.
• Administrators (AD). Administrators take client calls and provide duties like customer service, route support tickets, and monitor responses to close tickets. They are also responsible for firm reporting and general administration oversight.
• Partners (PR). Partners are the leaders of the practice. They review work and are responsible for business development and sales calls. They also oversee customer relationship management and overall operations.

Best of all, a vertical industry niche team approach offers millennials an opportunity to grow and expand. Rather than having to move up each year, they have the opportunity to move laterally within the same firm and learn about different vertical industry niches. It is also an opportunity to learn more about a new industry and gain knowledge of different technologies without having to leave the practice. This creates a more attractive recruiting tool for new talent and fits in the millennials' model for workplace satisfaction and continuous learning.

PRICING AND PACKAGING

Many accounting professionals still bill per hour. However, that is not a profitable approach for a cherished advisor team.

Charging by units can be traced back to the 1950s. During this time, the American Bar Association (ABA) was fearful that doctors' incomes were passing lawyers'. In response, the ABA published a pamphlet called The 1958 Lawyer and His 1938 Dollar (West Publishing Company, 1958), which suggested that the industry sell their services in units similar to mass production manufacturing—in this case by the hour.²

For the most part, it worked for accountants. It was easy to determine an accountant's worth by measuring how long it took to accomplish a specific task, and then to simply charge the client a specified rate based on those numbers of hours. Profits were measured in how many hours an accounting firm could accumulate and charge for.

Hourly rates are still a popular choice for billing compared with a flat fee. A survey conducted by the 2016–17 National Society of Accountants Income and Fees of Accountants and Tax Preparers in Public Practice Survey Report found that about one-third of firms bill by fixed fee (35.3 percent), hourly (31.2 percent), or a combination of the two (31.8 percent).³

But there are several flaws with the hourly approach.

During the past decades, global trade and technology have made it tough if not almost impossible for industries to make a profit in mass production that is driven by hourly rates. In addition, accounting software has made it easier and faster to do the basic accounting work, which means fewer hours to bill and thus less profit if billing by the hour. Just because technology has helped accountants do more work in less time does not mean the accountants' value has diminished.

The billable hour undercuts your value as an accountant and suggests that your services are interchangeable with others. If you step back and think about what is valuable to a client, it's the answer that you provide them in the form of advice or financial reports. If you get that answer in 10 hours versus 40 hours, it doesn't change the value of what you delivered. Actually, the client is happier because you provided them the answer in a shorter amount of time.

In the billable hour scenario, if you and another accounting firm offer the same services, the only difference from the client's perspective is how much time the works takes you and what is charged for the hours that are billed. If someone else is willing to charge less or do the same task in less time, they are deemed more valuable to the client because all they see are dollars and cents—and not your expertise and skills.

The other downside with the approach is that the client cannot see the accountant's value either. The client only receives a bill of hourly services, and does not see what it takes to accomplish that task—or why it may take that amount of time. This leaves clients frustrated because they do not know what an accountant's final bill may be until it arrives. So often they end up surprised by the total and cannot see why it took, say, 10 hours to complete a financial report. This also creates a bad experience for clients because they cannot budget for fees that may be charged to them.

In a Journal of Accountancy article called “The Firm of the Future,” author Ron Baker argued that most businesses have prices and not hourly rates. Using the airline industry as an example, he pointed out that nobody would fly an airline that charges $4 per minute, because so many variables—seen and unseen—can cause the cost of your ticket to wildly vary. It's too unpredictable and thus creates a lack of confidence between the airline and the customer.⁴

Your advisory services can run into the same problem if you are not careful. A better way to bill for services—and one that helps both the accountant and the client—is to charge for packaged services.

Adam Davidson, writing in the New York Times, explained that companies like General Electric, Nike, and Apple long ago learned that the real value in their service to customers is not the end result, but rather the ideas that can transform their products far beyond their generic value. For example, Davidson writes, Apple doesn't want to be in the generic MP3-player business. There is too much competition and it is difficult for customers to see value in their MP3 compared with others. What makes their product so special? He says that Apple charges for the value in its MP3 product—that it offers more than the competitors and benefits the customers in more ways—not how long it takes to build, ship, and sell the product.⁵

Perhaps the greatest problem was that hourly billing motivates firms to focus only on long projects because they are more profitable, rather than those that required insight that couldn't be measured per hour. Also, the billable hour encourages accountants to spend more time than necessary on routine work rather than on the analysis clients need to run their business.

Cherished advisor teams correct this. They are created to offer a variety of services that can be billed in a more acceptable packaged base rate. The work within the team becomes repeatable and process-oriented, so that the right amount of time can be spent on the advisory side. As the teams get more knowledgeable and efficient, the work should take less time, and the advice should keep getting better. The clients can see exactly what that engagement entails and can budget for it, and the cherished advisor teams can devote their time and energy to producing value instead of focusing on tracking billable hours.

This pricing and packaging model of billing creates a win-win revenue model for you and your client. First, it builds a stronger one-on-one relationship with the client, which helps secure long-term contracts. Additionally, clients are happier because they know how much they are paying and are not afraid to receive the bill. It also strengthens your services. Billing by packaging services does not mean you charge less, but that you place a greater price on your overall value. It may take you and your cherished advisor team less time to perform certain tasks, but this means you have more time to do other work. You are working more like a mini-corporation that offers clients value—knowledge and financial expertise—rather than reports to meet a deadline without any explanation.

Let's say you have various flat fees that cover an outlined set of services. For instance, say you have a client in the health and wellness industry. You would charge $500 to do X, Y, and Z. This fee would cover your basic services, and then you could charge $600 or $700 per month to include additional services or to complete regular services more frequently or on a different time schedule. You can also adjust packaging of services for clients with different needs. Table 3.2 shows an example of what three packages may look like.

SUMMARY

The foundation for becoming a cherished advisor is how you develop and manage your relationship with your client. This interaction between accountants and clients goes beyond cloud technology, data, and figures—it is about delivering value that a client needs from an accounting professional, such that the client can't imagine not having you as part of the business. You establish this relationship by conducting in-depth interviews with the client to get a clear picture of the client's operations and accounting practices, as well as visiting with departments and employees to better educate yourself in all aspects of the business. From here, you identify the areas where you need more experience and education and then, by utilizing the growing and motivated millennial workforce, you create multiple-member teams to analyze the client's needs and then offer strategies and packaging services to best help your client's business meet its goals.