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Did you know that even if you have a CPA, there are three accounting mindset secrets you likely don’t know about? Here’s a little known fact: The American Institute of Certified Public Accountants wants you to know about auditing, financial accounting and reporting, regulations and so forth—but they are not in the business of teaching accountants how to create value for clients. That’s up for each individual accounting firm to figure out in the real-world.
Much like with school, where some of the most important lessons you learn in life are not taught, so it is in the world of accounting. Your degree and all your professional training failed to give you one extremely important piece for massive success: How to create value for clients.
Question: Do you give enough value to your accounting clients? This is NOT just about providing some report they need to have. This is why some people think accountants don’t help people make money. If you’re an accountant, you better be helping people make money with tax planning and CFO services, among others. This article will take a closer look at how accounting firm growth often begins with giving more value to your clients with three little known accounting mindset secrets.
Successful accountants know that when you’re focusing on what value you are providing for your accounting client, it is not necessarily tied to the fees you are charging, nor the time you’re going to invest. It is absolutely possible that an accounting service can take you a lot of time and provide little to no value to the client!
Some examples of this might be handling accounts payable and bill payment, where a manual process might be in place, or the client may want you to move them into an automated process. Therefore, conducting a full IT implementation to make that transition can take a substantial amount of time, while providing little value to the client.
Similarly, it is absolutely possible to provide a service that is high value to the client, but demands a relatively low time input. When you think about CFO engagements, one of the most valuable things you can give your client is the knowledge, advice and analysis that you provide at the end of every month, quarter and year.
Of course, it is critical that the financials are accurate. Likewise, it is essential that the client actually understands the financials and they know how to read them. However, the most important thing you can ever provide your client is a list of actions they need to take to achieve a transformation.
Here are some questions to ask yourself when evaluating your client’s financial situation:
In a matter of minutes, all of these questions can be explored simply from seeing the financials. That is really where some of the most valuable advice comes from—not in reconciling every transaction, processing bills, or invoicing clients, but rather in providing the analysis and knowing what to do to take action!
There are services all across the spectrum that you will choose to offer by providing CFO services, and it is important to be intentional about your choice. You may want to provide some substantive accounting because you want the relationship to have a strong foundation, and you don’t want to be judged or evaluated simply based on your advice.
You are actually doing technical work as well, which is expected. However, you want to make sure that you are constantly trying to move into services that provide more value to the client, but require less economic input from you.
Definition: Economic input is the time and money that it costs you to get the value for the client.
You always want to consider how much time and money it takes you personally, as the firm owner, to get results for your client. This includes the time it takes to acquire the information, get the reporting from the client, or give advice to the client:
Accounting firm growth starts with finding value for clients. During the value extraction process, you will identify the problems the client has, then figure out what you need to do in order to get them to their desired state. This is the distance between the current state/problem (A) and the desired state/solution (C), with (B) being the services and the value that it takes for that distance to close:
Let’s look at how to reduce the amount of work that you have to do to get the client from A to C.
Whether results take 2 hours or 25 hours, all that matters is that you bring value. And when it comes to pricing…here’s the rule: No matter what service you are offering, you need to know the specific monetary value and make your pricing ⅓ of that value.
In other words, you want to charge them something that is going to give them a 3 to 1 return on their investment. And there are some key pricing principles to remember:
These are the key principles that you should remember for pricing any services you decide to perform. Using these accounting mindset secrets will also help you become a successful accountant, maximize value for your clients and lead to accounting firm growth!
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