Category: Business Advice

It has been a gruelling six months since lockdowns spread across Europe and then England. Accountants have had to play catchup with one coronavirus scheme after another, advising their clients on everything from Job Retention Scheme to Bounce Back Loans, CBILS, SEISS, and so on.

Just reading the list of schemes itself is exhausting, not to mention:

1. Understanding the intricacies of each one.
2. Then understanding how it might dovetail (or not) with your client’s needs.

Just as accountants were preparing to deal with complexities of tiers of lockdowns, Boris J. went and announced yet another nationwide lockdown, adding to the strain of accountants who have fought right along with their clients to prevent their finances from imploding and their businesses from collapsing.

Add to the above that many accountancy owners themselves are also facing the same problem their clients face, wondering if they shouldn’t just cut their losses and run.

We all want to do good by our clients. To that end, Accountants have gone above and beyond in advising clients on the different schemes, assisting them in applying for one if it was a good fit, advising them against another because of their debt profile, and so on.

The task is both mammoth and exhausting. Here are some things you can do to reduce that exhaustion.

Realise you are not a therapist

Times are tough for everyone. The in-thing on LinkedIn these days is to show your vulnerability and that you’re human as opposed to letting everyone think you’re a superhero.

As with everything in business, a little goes a long way, but too much can make you nauseous.

There’s nothing wrong with being a sympathetic ear every now and then. But your job is to ensure your clients’ businesses do not collapse due to a mishandling of their finances and their accounts, not because of their emotional state.

Taking on other people’s woes will only burden you more. Give good, professional advice but draw the line there. To do otherwise is exhausting.

Triage? Maybe not.

Here’s the hard truth of it: Some businesses are going to go down unless concerted, dedicated, full-time effort is made to keep them afloat.

The burden of that effort falls on the business owner, not you.

Unless you are personally responsible for someone’s failures in accounts and finances, you need to let them bail themselves out. Your job as their accountant is to give them a bucket without holes in it, perhaps even a bigger bucket. Your job is not to sit in that sinking boat and bail.

If you have a hundred businesses in dire straits, but three of them (who also happen to have the least amount of employees) require almost full-time attention to rescue at the expense of the others, who do you tackle first?

You tackle the other ninety-seven first. Or, maybe, tackle ten or twenty, then address one of the problem businesses. Then another twenty of the “quick-fixes”.

Perhaps you’re tired as an accountant because you’re sitting there bailing water out instead of giving advice on how to do it.

Call a daily timeout, install boundaries

Again — it’s tough.

Some business owners might find it difficult to call a timeout for various reasons:

1. They’re afraid to lose a big client.
2. They’re genuinely concerned for the client’s welfare (the more usual concern amongst professionals).
3. A combination of the above.

But your accountancy firm is also important. If you go down, your clients will likely be able to find another accountant — the accountancy industry is glutted. But you won’t have anywhere to turn.

There’s a difference between working late into the night to help the occasional client, and never calling a timeout.

We’re professionals. Work must be done, and it is rare to find a pro who never works after hours during stressful times.

But that doesn’t mean your clients need to have your personal mobile number, WhatsApp number and a direct 24/7-line to call you at their whim whenever they want to.

You need to call a daily timeout for your emails and your business calls.

Part of the problem is that WFH has blurred the lines between what is work and what is play. It’s vital to define these boundaries. Although it’s not possible for everyone, try and ensure that your home office space is located somewhere else from your family/relaxation space.

There are phone apps around that block notifications/usage of other apps after certain hours. Decide that there will be no more work, say, after 20:00 and stick to it.

Then spend time with your family, a good book, or just sitting on your couch and recharging. In this day and age, it’s crucial to work smarter, not harder, and an exhausted executive is no good to their clients. Make sure you get your rest. Your service to your clients will be all the better

News has been conflicting regarding the UK’s bounce back after the countrywide lockdown. One day the press reports positive gains, the next it covers how the recession is all doom and gloom.

But you don’t need the news to tell you if your accountancy firm is struggling.

Whereas as the hospitality sector got a “Eat Out to Help Out” campaign, the accountancy sector got no such scheme. Too often, when businesses look to pinch their pennies, they look at their accountants — especially if those accountants aren’t in the habit of delivering “add-on” services to their usual fee income.

A business is far less likely to write off its financial advisor than its accountant. But too few accountancy practices have branched out into additional-value services and therefore plenty of firms are now in the position where they’re considering putting their accounting practice up for sale.

Selling an accounting firm — what you need to know

The first thing you need to know about, when looking to sell your accountancy practice, is that it very likely will have a reduced valuation in a post-COVID world.

The value of an accountancy practice is determined primarily from its annual fee income.

But, even if that fee income is high, it won’t take away from the fact that the economy is shaky and people and businesses are looking to save their pennies.

If your clients are primarily small businesses who don’t have to use your services, then it’s unlikely that any evaluator will consider your chances at future profitability very high.

And so your valuation is reduced.

Specialist Services

The other problem with valuations is that they don’t take into account all the many specialist services that a lot of accountants offer in order to pad their month-ends.

Whether you offer in-depth tax advice, financial advisory functions, or even business consultation on services which are not entirely accounting, these services will not necessarily be considered “fee income” if they are too specialised.

And so your valuation is further reduced.

And then there are the priceless aspects

Whenever an accountancy owner hits the point of wondering, “Should I sell my accountancy practice?”, you know that the decision was not arrived at lightly.

There are all those intangible aspects to the business which no evaluator could ever begin to put a price on:

1. One’s dreams of being successful.
2. The relationships one has built with one’s staff.
3. How those staff will survive (it would be great to give everyone an excellent severance package, but if the practice is already failing, that’s unlikely).

And what will you do once the practice has been sold? In times of such deep recession, sometimes the best option might be to stick with the sinking ship in the hopes of spotting land, not to dive headfirst into a frothing sea.

But every practice and set of circumstances is different.

How to sell your accountancy practice?

Beware the sharks!

There are numerous steps to selling your practice, or possibly merging it with another.

The ICAEW has quite some guidance on it, but none of that guidance discusses the shark in the water.

It’s a fact of life. And as much as we’d all like to believe the modern world doesn’t contain an undue amount of unscrupulous individuals in professional business circles, it is an unfortunate fact that such people do exist.

The act of buying your accountancy practice is a business transaction. Profits and losses are involved, and if you were the other party, would you try to maximise your profits or minimise them?

Whatever steps you take to get your accountancy practice ready for acquisition or merger, keep your eye sharp because you are in treacherous waters during this recession.

A better solution to selling your practice?

What if I told you there’s a better solution to your difficulties than outright selling?

Well, there is.

We came up with the business model for We Run Your Practice after a decade serving as professional accountants in our own successful accounting firms.

We had always been somewhat tech-savvy. We implemented numerous digital strategies in our own practices and thereby reduced our workload while increasing our efficiency.

We honestly thought this was the way all other accountancy practices did it, only to discover that, sadly, it was not.

Whereas our own practices were doing well, marketing intelligently on the internet, using email marketing, working efficiently, we saw that a shocking number of our competitors weren’t doing this.

It is in fact so easy to get an accountancy practice up and running in high roar if you know how to do it that we saw a business opportunity: Making other accountancy practices successful, and then taking only a small percentage of their profits as our monthly fee.

It’s a win-win situation because those practices’ profits would not be high, were it not for our intervention.

Just recently, our highly innovative and unique approach and implementations won us a position as a finalist in the Accounting Excellence Digital and Innovative Firm of the Year Award. It has taken years of testing and trying what worked and what didn’t to come up with the specific formula to turn any accountancy firm into a going concern.

Now is not the time to sell your accountancy practice.

When is the time? Well, whatever the time, do it when your practice is earning a much higher fee income, and you’re selling from the point of success, not the point of struggle.

Accountants in the UK are, too often, looked upon as staid old fogies who can’t learn new tricks. Sadly, I have found this to be true of many older accounting practices.

But even some of the newer practices fall prey to this. They look at veteran accountants, or perhaps even to the Big Four, and they see suits and ties and formality everywhere.

Yes, accounting is a formal subject, entrenched in legalese and regulations. But the world has progressed. Even much of the “older generation” is now so familiar with a high-tech world that failing to live up to these expectations of speed and efficiency can lead to people simply not hiring you.

I’m not only talking about tech here. I’m talking about how you are perceived by potential and existing clients.

Whether you like it or not, you will be compared to Facebook and Amazon and even to the local pizza place. Yes, it might sound strange, but it’s true.

Service is service. And speed of delivery is speed of delivery. And, in this world, your business must compete with all businesses in order to be considered “modern” and “with the program”. If a client receives prompt and excellent service from Amazon, that’ll be the first company they’ll compare you to if you fail to deliver that quality of service as well.

Here are some ways to change your accounting practice from a staid, recalcitrant dinosaur to a high-tech, efficient, speed-of-light production-machine.

Delegate

First and foremost, start shedding your load.

If you want your UK accountancy practice to compete with the best of them, you need time to sit at your office and plan. You need a distraction-free environment. You need space to look at your team with a clear head.

If you are still handling individual clients’ calls yourself despite having a twenty-person team, something is wrong with your delegation.

If delegating makes you nervous, likely you are one of those executives who is totally overworked.

Believe me, I’ve been there. Pick the employees you trust the most and give them some tasks to try out for a month. Don’t come down hard on them if they don’t manage at first. Just guide them along the way.

Soon, you’ll be able to buy yourself enough time to think up the big plans and focus on the larger picture because your own personal workload is lessened.

Implement processes

Whether digital or manual, you need to have fixed processes in your practice.

“When employee A is finished with Tax Return B, place it in basket C for it to be verified by Partner D.”

That’s a crude example, but it’s a factual one. No processes in place = confusion and wasted time.

Once you get the processes in, train your staff on them.

You’ll become more efficient and have less of those “Uhm, yes, I think you made a mistake on my accounts” phone calls which accountants dread so much.

Automation

Now we can get really fancy!

The way of the future for accountancy firms is automation. There is so much that can be said about this that it could fill a book. In fact, it has, and you can download it for free here.

In a nutshell, almost everything in an accountancy firm can be automated. And if you get your head around how to do this, the savings on time and money can be phenomenal.

Best of all, your clients will notice the difference — they’ll see that you’re high-tech.

Drop hourly billing

Hourly billing is a thing of the past. If a lead comes to you and sees that you charge by the hour, you’re less likely to convert them into a client.

Yes, I know, it can be scary to charge a fixed price. But if you spend some time improving your accountancy firm’s efficiency, you can start to charge fixed prices without too much burden.

I’ve found that charging a fixed monthly fee works well in the long run, provided your accountancy practice is operating at top speed.

How to reduce the load of routine bookkeeping

Bookkeeping is cumbersome, slow work. Once upon a time, an accountancy firm wouldn’t dream of doing a client’s bookkeeping.

Those days are now over. Too many accountants offer bookkeeping as part of their overall service for you to ignore it.

Of course, using tools such as Quickbooks or Xero is imperative if you plan on offering bookkeeping to your clients.

Another option, however, is to outsource the bookkeeping.

Outsourcing accountancy services is tricky business. It can come back and bite you if you go with the wrong company. But it is still an option if you’re looking to reduce costs and improve efficiency.

Use relationship managers

The idea that the accountancy practice’s CEO is the only one who can have a relationship with the client is completely outdated.

There are a number of benefits to using relationship managers.

1. Matching clients up with people of similar personalities/interests can increase trust on the part of the client, thereby leading to more willingness to work with your firm.
2. Frees up your time considerably.
3. Gives the client the sense they are receiving “Premium Service”.
4. Improves service overall because clients don’t need to wait for your availability when there’s a problem.
5. Increases a client’s sense of security when working with your firm — they can simply pick up the phone and talk to someone who knows their account backwards and forwards.

The only caveat to this system, however, is that it must be assigned only to employees of the highest trust, and who are deeply invested in your firm. Although you, no-doubt, have non-solicitation clauses in your employee’s contracts, you won’t have a leg to stand on in court if your employee leaves, to start their own practice, and the client follows by their own choice.

The new accountancy practice model

Efficiency, efficiency, efficiency. It is the mantra of any accountancy practice that wants to remain profitable in this cutting-edge world.

Unless you can improve your accountancy practice’s efficiency, you’ll be stuck in the old, fossilised method of conducting business, overtaken by new, fresher firms who have embraced efficiency and better methods of doing old things.

Do the above fully in your practice and you might be surprised at just how much it improves your bottom line.

With the UK racing “towards its fastest and deepest recession for more than a century”, according to the Bank of England, probably the idea of selling your accountancy practice has crossed your mind. With many of your staff likely furloughed, and the end of the lockdown nowhere in sight, selling your practice might seem like the only option.

But what kind of price would you get for it in these highly uncertain times? Doubtfully a decent one.

Times are toughest for those who were not prepared for working remotely. There are so many tools out there for doing this — Microsoft Teams, Monday.com, Slack, Zoom, and others — that trying to navigate through them during the pressures of an uncertain economy is impossible.

Perhaps you’ve decided not to sell your practice, after all. You’ve chosen to hunker down for the long haul, dig into savings and push through until the end of the lockdown, then market like the dickens and get in new business when the lockdown is over.

But leaked information about the UK government banning hot-desking makes going back to the office more complex.

And new rules mean you would have to adhere entirely to the two-metre rule (or the one-metre rule) to be allowed to open the office at all.

What if your office isn’t big enough for that?

You might have to implement other protective measures such as making staff wear face masks or installing Plexiglass at desks to limit the chance of contagion. This means even more expenditure, more use of cash just to be able to open your doors.

There’s also talk of implementing staggered work hours. Even if you had decided to hunker down, for now, it appears you might need to implement some kind of remote-working facilities, after all.

Change, change, endless change. It’s like walking on quicksand at the moment.

But take heart. There is hope.

The world has changed, people will understand if you don’t have an office

The world has changed. People feel it in the air. Things are dim, and we’ve all been through something catastrophic and difficult together.

As a result, we all look at the world differently now. And who’s to say that the changes are bad? Coronavirus is one thing, but what about illness in general — cases of flu, colds, and other diseases? I cannot count the number of times I’ve been shopping at the Tesco in winter only to walk past three people coughing in my vicinity.

Even before the COVID-19 pandemic, my first thought was, “Stay home if you’re ill, people!”

In today’s world, the thought of women being forced into the life of homemaker with no choice to earn a living in a “man’s world” is abhorrent. It’s difficult for us even to imagine such a discriminating, unjust world. And yet it existed before World War II. The war changed that.

A posh address which starts with “One Canada Square” was the reality of yesterday. Today’s reality is, “Oh, goodness, how do you keep your staff healthy if you work there!?”

Working from home is the new normal. Our kids and our grandkids will not feel the culture shock we’re feeling today. They’ll go to the office, see the Plexiglass, wave at each other and smile from a distance. They’ll think that their parents/grandparents were a lot of fools because we spread so much disease.

So, have no qualms about ditching your office space. No one will care, or at least everyone will understand. There is no shame (anymore) in running your fancy business from your home.

What to do with staff?

This is a terrible situation for everyone, and times like these make it difficult to do good by everyone. The matter of personnel is a catch-22 at the best of times.

The government has provided us with the CJRS, but in order to qualify, staff must not do any work at all.

Let’s look at that:

1. If staff do no work, you can’t run your business and stay afloat.
2. If staff do work, you can’t claim 80 per cent of their salary, and thereby increase your overheads.

To solve that, the UK gov went and gave us the BBLS. More loans, more debt. A never-ending downward trend of reduced income and increased costs.

I cannot advise you on what to do about your staff. This is a personal matter of integrity that every accountancy owner must consider themselves. We deal in numbers, but our staff are people with families and livelihoods.

Still, we do deal in numbers. And the numbers paint a dim picture. If the entire ship goes down because we’re forced to hold onto the whole crew, then everybody suffers. As much as business owners wish they could keep their staff, this simply might not be possible.

I would, however, appeal to you to talk to us first if making staff redundant is your only option left, we might be able to help. This is not a plug of our own services, but a plea to do everything you can to keep your people employed.

The next breath

In times like these, when we are all seemingly at the whim of daily government decisions which encroach directly into our livelihoods, it’s difficult to do more than take your next breath.

We’re allowed to go outside once a day for exercise. I would strongly recommend that you do that. Take a walk, look around, appreciate that the world still exists.

All you need to do is take the next breath, save the next penny, and then get back into business with a roar when we’re allowed to open the doors again.

Until then, look at how to cut costs. Consider your office space first, and your staff as last. We don’t need offices anymore. We do need people.

The world has changed, and we must change with it.

The accountancy industry grows ever more competitive with each passing year. Gone are the days when people considered a “good accountant” as someone who could submit their tax returns on time while possibly also saving them a hundred quid. These days, people want more services, they want flashing lights, they want speed. And, as a result of the gig economy mindset, they also want these things for peanuts.

To compete with this mindset, you have to attack the problem in two ways:

1. Play a hot marketing game where you have sufficient materials (website, social media following, glittery brochures, etc.) that convince people of the superiority of your service
2. Invest in more efficient ways to run your practice and reduce your workload

You could pay an external company to do these things for you, but that might get expensive. Instead, here are four in-house departments you should invest in so that you can constantly keep on top of your competition

1. In-house web design team

A website is your portal to the world and how people will look at your brand.

Especially for younger clients who do not remember the days of slow modems or of no internet at all, your web presence needs to be smoking hot. At the very least, the website should be mobile-friendly.

But a website is a living thing. It must constantly be updated and worked on or else it’ll gain little to no traction in the search engines.

Hiring an outside company to do this has its pitfalls which usually fall under the categories:

1. Low prices but awful website/service
2. Amazing website but too expensive

When it comes to updating your website regularly, however, the costs can become astronomical if handed to an external company.

Hire some people to do it in-house. You’ll reap the benefits tenfold.

2. In-house SEO team

While clicks from organic traffic are technically free, companies that regularly get found on search engines for multiple search queries are not there by chance. They have invested heavily and knowledgeably into search engine optimisation in order to be found.

Search engine optimisation is a big subject which encompasses innumerable facets, including:

1. How mobile-friendly is your website?
2. How readable is your website?
3. How good is your content?
4. How engaged are your social media accounts?
5. Do you even have social media accounts?
6. Do you have the right kind of social media accounts?
7. Are the social media posts you’re making relevant and useful to your followers?
8. Are you gaining high-quality links to your website from other reputable websites?
9. Are the inbound links you are gaining coming from relevant websites?
10. Do the links have the right text in them which will let search engines know what your site is about?

The size of the subject is genuinely staggering. But its results can mean the difference between an accountancy practice that is skyrocketing compared to one which is merely “doing well.”

The cost of SEO, when done properly, can be enormous. Hire an in-house person or team who knows their stuff to do it for you.

3. In-house social media team

Because SEO is such a large subject, and so tremendously vital to long-term success, the reality is that you’re probably going to need more than one person to take care of it.

I mentioned a few things about social media in point #2 above. If you truly want to leverage social media in your SEO strategy, you’re going to need at least one person working on it full-time.

It’s not only about SEO. It’s about engagement with your clients, and keeping them informed.

People access information in wildly different ways compared to ten or even five years ago. Your clients will look for updates on various subjects from different sources:

1. Twitter for quick updates and news
2. LinkedIn for more business-related information
3. Email for information relating specifically to your relationship with them

You need an experienced expert to take care of this full-time for you, either on a subcontracting or employment basis.

4. In-house tech team

I don’t mean an IT team. I mean a team that implements and invests in highly advanced processes and workflows using the latest technology in order to minimise wasted time and improve efficiency.

There are so many tools out there on how to do this specifically for an accountancy practice, that the knowledge would fill a book.

The accountancy profession is traditionally quite terrible at implementing new tech. But even if it’s good at it, there is simply so much choice available that you do need a dedicated team to work on it so that you’re free to run your practice.

The investment is worth it. Accountancy in the UK is a tight-margin industry, and only through efficient use of tech and cloud-based solutions can one reduce workload and increase effectiveness.

Thinking outside the box

There are so many accounting practices in the UK that believing you can compete with them purely through word of mouth is folly. Not only is our industry tight in its margins, but it is also brutally competitive.

Make the above departments a part of your practice so that you can constantly stay ahead of the competition.