Archive for the ‘Mark's other sites’ Category

There are essentially just five basic approaches to making more profits as an accountant in practice:

1. Increase your charges – for doing the same work you have always done. This requires you to increase the perceived value of what you do
2. Speed up collection of your fees and so reduce your capital requirements and interest costs
3. Reduce the time you spend providing your services whilst keeping your fees the same as before. This allows you to take on more (profitable) work.
4. Provide more value and charge more than you did before NB: this is not the same as simply ‘doing more work’ for existing clients
5. Provide additional services and charge for these. Avoid preconceptions about what clients will pay.

There are also 2 supplementary things you can do:

• Get existing (good) clients to introduce new prospects just like them

• Sack the duff D-list clients who get in the way

You will appreciate that my focus here is on generating more profits rather than on increasing your top line, for example through adding new clients secured through advertising, marketing and networking.

In my talks on this subject I tend to focus on the first 5 points above although I also cover the 2 supplementary issues and some of the less costly methods of securing new clients and turnover. In so doing I share dozens of practical, commercial and easy to implement ideas that I know are being applied by other smaller practitioners.

“How to make more profits from your smaller clients – without fancy tax schemes” will next be presented in Birmingham on the morning of Friday 21 May 2010. Full details here.

I’m reminded of the old sex education message: Just say ‘no’!

As professional advisers we are all used to prospective clients seeking free advice. As I’m no longer in practice and as a frequent blogger I have very different perspective now. So here is some free advice from me.  When a stranger/prospect calls you need to set clear parameters. Why give any free advice?

I think the most common reason accountants give themselves is that it helps evidence their credibility, style, approach, knowledge and willingness to help clients.  In reality it is only the accountant themselves who doubts their ability and knowledge. The prospect generally takes all that for granted – after all our adverts or website makes clear we’re an accountant. All accountants know everything don’t they? We know this isn’t the case but prospects assume it is so.  Even more so if theye have been recommended or referred by a third party.

So accountants are generally proving nothing by giving free advice. They can evidence the other key qualities they want to exhibit without giving free technical advice.

I also tend to think that a side benefit of the Anti-Money Laundering (AML) legislation is that it gives accountants a statutory justification for any apparent reluctance to provide answers to technical questions before engaging a new client.  “I’m really sorry Mr Prospect but as a professional adviser I’m precluded by law from giving any advice before we’ve been through the anti-money laundering checks. I know it’s a pain but it’s the law.” The consequence of this will often be that you have engaged the client and secured their agreement to your preferred billing procedures before you give them any valuable advice. So the AML laws do have an upside after all!

Finally I would suggest you establish a process to qualify a prospect or to let them go elsewhere before you waste too much time on them. Initially you may want to qualify out time wasters on the phone. You will also want to determine what you need to cover in an initial meeting.

In many of my seminars I ask accountants if they offer a free initial meeting to prospective clients. Typically the answer is ‘yes’. “How long do you allow for such meetings?” Some put a cap on it. Others say ‘as long as it takes’. I ask the question – “As long as WHAT takes?” It’s not just about getting the prospect to want to appoint you. You need to find out quite early on if they can afford to pay the fees you would want to earn. You also need to determine if this is the sort of person you want to have a client.

Bottom line, I’d suggest you establish a process/checklist (that you will in time commit to memory) to use when you receive such calls in future and indeed when you have an initial meeting with a prospect.

Separate to this blog I also write the TaxBuzz blog and a blog containing Accountant jokes and fun. The latter contains over 400 jokes, videos, anecdotes, links and quotes relating to accountants, accountancy and tax related topics.

Additions during December included:

• 7 new taxes for 2010
• Ron Howard plans a tv comedy set in a local IRS office
• Beware your comments on taxman’s youtube videos
• Take more care when charging for ‘time spent’ on clients’ affairs (This one contains an important lesson!)
• The 12 days of Taxmas – a reworked Christmas Carol
• An Accountant dies and goes to heaven
• Ten arguments used to justify NOT filing tax returns
• 2049 – A vision of the tax side of the accountancy profession
• Ten famous people who were nearly accountants
• Unleash your inner accountant
• The wages of sin…

Over the last few years I have posted over 400 jokes, videos, anecdotes, links and quotes relating to accountants, accountancy and tax related topics on the Accountant jokes and fun blog.

Every now and then I post  a summary of recent posts here. So, from November:

• Bob Newhart’s theory of accounting
• So it’s not just Monty Python – Seinfeld on accountants
• More accountant fun courtesy of twitter<
• How to do tax advice naked
• HMRC award for tax transparency
• Dave Hartnett breaks a personal promise
• Marketing Strategy of the Year. And the winner is……..
• Sir Humphrey’s new charter?
• Is this how accounting works and how we can get debt free?
• David Frost on the creed of the Inland Revenue

A driver who drove his car to the edge of a 100ft drop after he “slavishly” followed its SatNav instructions has become one of the first motorists to be convicted for placing too much trust in his SatNav.

When I noted this news story today I was reminded of a comment I make during my talks about how to avoid professional negligence claims. It’s in the context of evidencing ‘good practice’. One way of doing this is to comply with your professional body’s Membership Handbook. In normal circumstances you might expect that if you can show that your actions were in accordance with the guidelines contained in the Handbook you would have a strong defence against allegations of professional negligence. But this is not the whole picture.

During my talks I focus more on the practical and commercial issues  than on the legal ones as I have an accountancy and tax background rather than a legal one. In this context I make the point that, whilst the position is not free from doubt, slavishly following guidance that is patently wrong may not be a good enough excuse. There is some precedent for this in the world of medical negligence.

We need to recognise that some of the guidelines in membership handbooks may be out of date – and that the Courts will expect professional advisers to apply common sense. The test will be what would a reasonably competent accountant have done in the circumstances. If this would differ from the membership guidelines then you should have done so too. It seems the same is true for drivers – is it reasonable to follow your SatNav instructions if they are clearly wrong? The report today suggests the answer is ‘no’ – and you can’t get off by blaming your SatNav.

I don’t imagine that the recent ‘SatNav’ case will figure in future courses about professional negligence but it is a useful reminder that we are all expected to apply common sense rather than slavishly following generic guidance that may be out of date, irrelevant or dangerous.

Over the years I have collected dozens and dozens of stories of what it is that has led to problems for accountants. Such examples help inform my talks about how to avoid negligence claims. It’s also worth recognising how easy it is for things to go wrong; after all they do say that forewarned is forearmed.

So here is a selection of real life situations that have led to negligence claims against accountants. Don’t get caught out yourself:

• Unexpected obligations to overseas tax authorities
• Difficulties with liquidators due to auditors being officers of the company
• Failing to provide all relevant information to successors
• Failure to evidence independent advice as a trustee
• Difficult clients not providing all relevant information
• Nightmare clients who are not clear as to what they want
• Continuing responsibilities after ceasing to act for a client
• ‘bad’ partners in the firm
• Counter claims when pursuing outstanding fees
• Going beyond agreed scope of work and level of own competence
• Failure to spot employee fraud
• Clients who lose confidence due to poor communication
• Lack of clarity re scope of work and responsibilities
• Adverse media reports after disgruntled client leaves
• Casual relationships
• Third party (or interested party) putting pressure on client to complain
• Failing to spot technical issues
• Valuation related work when subsequent sale suggests a very different figure
• Clients looking for someone to sue

I have also addressed related points in previous posts on this blog – such as

• Expect more clients to seek advice on Tax Credits;
• That key term in PI policies
• Ten top tips to avoid professional negligence claims
• Are you at least ‘reasonably competent’?

If you’d like to know more about How to avoid professional negligence claims and protecting your practice from negligence claims and worse – then you may want to attend my next seminar on the subject.  Full details here.

If you’re unable to get to London for the seminar you can instead access the slides and notes from an earlier version of the seminar by following this link.

And if you have any examples of claims that you’re willing to share do please add them as comments to this blog post.

Twitter seems a bizarre concept. In theory you post brief messages (up to 140 characters at a time) about what you’re doing and these are seen by your ‘followers’. Equally you can read what other people who you’re following say they’re doing.

In practice ‘tweets’ are far more varied than some of the media would have you believe.

Through twitter I have secured attendees at my seminars, traffic to my websites and to my blogs. I have also benefitted from having my messages ReTweeted to wider audiences than the people who ‘follow’ me. And following links from other people’s tweets has led to useful material for my blogs. I’ve also started to build online relationships and have experienced strangers acting as my advocate.

Each time I add new posts to my Ambitious Accountants blog, my TaxBuzz blog or my Accountant jokes blogs an automatic Tweet goes out with a link back to the new blog post. And it’s not only my ‘followers’ who get to see them. Many people search twitter for real time commentary and then tell others.

So, for me twitter is shaping up as a fun business tool. But, do I think many UK accountants will become active on twitter? No. It’s too time consuming as compared with other ways in which they can achieve their business objectives. In this connection I refer back to a blog post I wrote last December in which I explained why ‘Twitter is not for accountants’. My views are unchanged despite knowing a handful of accountants who are now active on twitter – some are even enthusiastic about it. Maybe more will try it out, but I doubt many will stay the course (for business).

Twitter is the latest phenomenon in the area of ‘online business networking’. Business or social? It depends how you choose to use twitter, what you tweet about and who you follow. If you follow all the internet marketing enthusiasts, the celebrity twitterers and the novices who don’t really ‘get it’ you’ll certainly consider twitter a waste of time.

You may know some of your ‘followers’ personally. Others will find you through friends, through real time searches re accountancy and tax subjects or subjects o mutual interest. There are loads of would be twitter spammers – but if you don’t follow them they can’t spam you! And you choose who you follow. If you don’t like the way that someone tweets, ‘unfollow’ them.

I doubt many of my followers read all of my tweets. I certainly don’t have time to read all those of all the people I follow. Many of them in fact only tweet occasionally. As well as friends and business associates I follow other commentators, some journalists, some firms, some publications and some organisations. Many are still experimenting with their twitter strategy – as am I.

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If you decide to join in, by all means follow me at www.twitter.com/BookMarkLee. I’ve explained my approach in more details on the twitter page of this blog.

Through the Tax Advice Network I also write the The Tax Buzz blog and twitter feed which you can follow at www.twitter.com/TheTaxBuzz

UK accountants are listed on the UK tax and accountancy twitter listing/league here: www.TaxAdviceNetwork.co.uk/twitter At the time of writing this has about 50 names on it – not all are accountants in practice. [edit: June 2009. Now c80 names]

There are also twitter twibes for those interested in UKaccountants, UKtax and TaxBuzz. If you are on twitter you can join these too if you like.

And if you have a contrary view, whether you are an accountant or not, please add your comments to this post.

It’s been two weeks since my last post on this blog and that’s probably the longest gap between posts since I first started blogging almost 3 years ago. There are well over 250 items here and I continue to enjoy writing and sharing ideas, tips and advice both for ambitious accountants who are building their careers and also for those building their practices.

So why the gap? Simply that I am currently being paid to blog elsewhere and there is a limit as to how much time I can devote to writing blog posts. For the month of March I am the Guest editor of PracticeZone on AccountingWEB.

This foray into online journalism has already taught me that it’s not as easy as it might look to produce readable and useful copy to regular deadlines.  Todate I have only had to focus on the weekly practical tax newsletter that I publish through the Tax Advice Network.

As well as my writing commitments I have other consultancy and speaking engagements – and my role as Chairman of the Tax Advice Network – to fulfill. So, of course, paid work takes priority over unpaid blogging.

Incidentally the Network is now fast approaching my target of 2000 registered accountants.  If you have yet to supply your name and email address don’t leave it too late.  Once registered on the site you’ll receive a free weekly email newsletter containing 3 practical points especially written for accountants in general practice – and of course full access to the profiles, articles, ratings and testimonials of all of the independent tax adviser members of our network.

As regards this blog, normal service will be resumed shortly!

Many, but NOT all accountants, charge fees by reference to the time they spend working on a client’s affairs. Most accountants in practice still complete timesheets to show how much of their day has been devoted to each different client and to each different aspect of management, administration, marketing or other ‘non-billable’ time.

Thinking back to when I was in practice it was many years before I realised that a timesheet may have uses as a management tool but that it did not ‘prove’ how much time had been spent doing anything. It was a guide, nothing more. In my talks to accountants, eg: “How to make more money from your smaller clients” I ask accountants what they would bill in a variety of situations. The answers prove that the timesheet is a guide and that the ‘time costs’ that it reveals are rarely the same as the fees billed (or that could be billed).

In previous posts on this blog I have considered related topics such as: Timesheets and value pricing professional services; How do you set charge out rates?; Clients will pay high fees for good advice; and Setting fee rates – using costs incurred or value provided?;

I am astonished to find that I have, todate, made no previous direct reference to either Ron Baker or the VeraSage Institute ( a “revolutionary think tank for professional knowledge firms”).  I’ve been aware of Ron since first reading his book ‘Professionals Guide to Value Pricing’ in 2001.

Today I rectify that omission and do so by reference to a new post on the VeraSage blog: All accountants charge for their time. NOT!

The blog post refers to a Q&A found on a number of accounting firm websites (possibly as it comes as standard in a template web page):

“How do accountants charge?
All Accountants charge by time. The longer it takes to prepare your Return the dearer it’s going to be. Some businesses sell hamburgers. Real Estate Agents get paid commissions, and ACCOUNTANTS SELL TIME.”

This is a sad misconception. It’s based on a misunderstanding and it’s a misleading myth. Accountants may try to determine SOME OF their fees by reference to time. They may try to  charge fees by reference to their time records but TIME is not generally what accountants sell.  If it were then the corollary would be that TIME is what people who want  an accountant set out to buy. And they don’t.

In my view accountants sell (or should focus on selling) Trust, Confidence and Peace of Mind. Indeed a quick Google search reveals an increasing number of firms who state this on their websites.  These are 3 of the key qualities, if not THE 3 key qualities, that clients seek when they want to appoint an accountant.  If  prospective clients do not quickly trust you, have confidence that you will do the necessary and give them peace of mind that they can rely on you, you will not keep them as clients; indeed they may not appoint you in the first place.

What do you think you sell as an accountant in practice?

Anyone who has heard me speak at seminars or enjoyed my mentoring programme will have heard me refer to the ABCDE of client service.

I was surprised recently to note that in the last 2 and half years I haven’t already blogged about this. But a quick search reveals that to be the case.

I first used it when training staff in practice almost 20 years ago. It’s evolved a little bit in that time but hasn’t required much change.

When I was in practice I explained to my staff that the ABCDE of client service summarised the five things that clients most wanted from their accountant. I encouraged my staff to keep it in mind whenever writing, phoning or meeting with clients. I also used this as a tool to help convince prospective clients that I knew how to look after them.

So here it is:

A = Advice – More than anything clients want Tax Advice.  A is NOT for Answers  – See previous post.

B = Barrier – Clients want us to act as a Barrier between them and HMRC.

C = Compliance – We deal with all of the Compliance paperwork and processes.

D = Dates – We make sure that clients know when they need to do things and when we’ll do things, when tax needs to be paid and when refunds can be expected.

E = Estimates – We provide estimates of the tax payable and repayable and update these as and when the information changes.

I remember playing around some years back and adding further definitions for additional letters (F, G, H etc).  But none stuck and five is about the right number anyway.

Does anyone care to try to improve on the above?