Although I’m an enthusiastic tweeter I accept that twitter is not for everyone. I’ve shared my views more widely here.

This blog post is for the majority of professional advisers who are not using twitter. I’ve noted below a selection of the tweets I have posted this week as they are intended to be helpful – in line with the ethos of this blog. I’ve added a word or two of explanation where appropriate.

Will be recommending @NikkiPilkington and her 7 Deadly Sins of SEO in a forthcoming talk on Websites for accountants (The objective view)

I was speaking at Mercia partners’ conference on ‘Making your firm’s website work for you – the objective view’. Rather than reinvent the wheel I included Nikki’s notes – with due credit. Like me she offers an independent perspective.

“The problem with quotes on the internet is you can never be sure of the original source” – Mark Twain

A satirical comment!

Good advice and tips re using LinkedIn from @RobWilmot at Mercia conf. Connect rather than Collect. Personalise the stnd invite to connect

Rob was another of the speakers at the Mercia conference and he encouraged everyone to personalise the standard invitation that LinkedIn offers as a starting point when you ask to connect with someone you know. He also rightly stressed that LinkedIn is about Connecting with people – not simply collecting a load of ‘connections’.

David Oliver of Insight Marketing has just shared some ASTONISHING new tips on referral marketing for accountants – At #Mercia conf

Like many of us in the profession I thought I’d heard it all before. But David Oliver impressed me with a range of new, innovative and, most importantly, COMMERCIAL ideas for securing valuable referrals.

During Q&A at end of #Mercia conf I was pleased to take the opp’ty to recommend #4networking and #NRGNetworks.

This followed reference to BNI as if it were the only available business networking group. I tend to encourage accountants to explore 4networking and NRG which are both very different from BNI and from each other. Horses for courses.

Regular readers will know that Incorporation has long been one of my pet subjects. I’ve written two tax digests on the subject and numerous articles. It’s also one of the seminars I am frequently engaged to provide to audiences of accountants.

I was chatting with a business associate (‘Steve’) recently who told me that he had changed his accountants last year – 3 or 4 years after they persuaded him to incorporate. Whenever I hear that someone has changed accountants I always ask ‘why?’

Steve had been with the old firm for ten years. He’d never been especially impressed by them but he stuck with them until they messed up.  In fact at one stage he’d been almost impressed. They persuaded him to incorporate his longstanding partnership business. He wasn’t convinced this was the best thing to do but he remembered the accountants were quite insistent. They said that they would be at risk of a complaint to their professional body if they didn’t incorporate the business due to the tax that could be saved. (This is rubbish of course. Clients can choose whether or not to take advice. It’s their decision. All the accountant has to do is to give the advice AND to ensure that the client only proceeds if they are aware of all the related issues – not just any potential tax saving. But I digress…)

Expecting tax savings Steve was shocked to get a demand for £36,000 ADDITIONAL tax from HMRC some two years after filing the first year’s accounts for the new company.  How did this happen? Steve explained:

His bookkeeper used to work for the accountancy firm who knew they could rely on her work.  After incorporation he had asked the accountants what to do when money came in re invoices issued by the old partnership. They told him to bank it as usual (there had been no change of bank account). The bookkeeper annotated all such receipts in the cashbook as being ‘re partnership’. For reasons I cannot fathom it seems that the accountants ignored the green ink annotation and reflected these receipts as being company income.  The additional tax bill was for the income tax due on the income excluded from the final partnership tax return. (Hopefully the accountants secured a refund for the additional corporation tax paid in error).

This is a shocking story.  It’s no surprise Steve changed his accountants. What steps would you have taken to avoid such a situation arising?

This is a bit of a rant, which is not my preferred style of blogging. I have just returned from a local group of tax advisers evening training session. It was supposed to be ‘Tax planning with LLPs”. That was the title in the promotional note, on the website and on the cover of the notes. (Actually they weren’t notes, just copy slides).

The title slide though didn’t mention tax. It was ‘Partnership structures’ and the lawyer who largely read her talk verbatim even started by admitting she wasn’t going to talk about tax. And she didn’t. Barely a mention, other than on the odd occasion when she noted that the audience probably knew more about tax than she did.

I felt short changed. As a regular speaker for groups of professional advisers I wouldn’t dare do what this lawyer did. She ignored the subject she had been asked to speak about and chose a subject of her own. Of course she could afford to do this. She is a partner in a large firm and almost certainly wasn’t being paid for giving the talk on a cold winter evening. No wonder she spoke on her preferred subject rather than the one she had been asked to present.

Maybe she thought she knew better than the committee who had booked her to speak as to what would be relevant and topical. How arrogant. How insulting and how unprofessional. There were almost 200 local tax advisers and accountants in the room. Some may well have found elements of her talk interesting. But it wasn’t on the subject they made time to go and learn about.  I’m sure many will feel they should have stayed at home (or the office!)

Maybe it serves me right. I had only booked to attend the session as I have a series of talks on partnership tax to present over the next few months. The first is next week and the slides AND NOTES are  already done. But I thought I’d see if there were any new ideas I should mention. Well I didn’t pick up any tonight that’s for sure!

I get paid to present my talks. If I didn’t keep to the subject I was booked to present I would be concerned that my fee might be withheld. And I would never be so arrogant as to insist on presenting a different subject to the one I was booked to address. I think tonight’s speaker was disrespectful, rude and unprofessional in her approach. But to an extent, you get what you pay for. As noted above I’m sure no fee was due to be paid to her. I charge a decent professional fee and present and operate in a professional manner (if you don’t mind the odd magic trick to liven things up a bit!)

If you were in the audience tonight do let me know if you’d like to attend my forthcoming half day talk on Partnership tax planning, tips, traps and news. Full details here. Anyone can come but I’ll extend a discount to those who also felt short changed tonight.

My business development manager has reminded me I should blog about this extended version of my recent talk at Softworld. We’re doing this next Thursday from 5.30-7.30pm in London.

Subtitled: How accountants can use and abuse online media this session will introduce you to a number of the key online media platforms – including Linkedin and twitter. I’ll be sharing tips and advice about what you can do, what you shouldn’t do, what works and what doesn’t. And when your time is limited what’s worth doing and what isn’t?

If you’ve been wondering what all the fuss is about, if you’re thinking of experimenting or about paying someone for help with an online media strategy, this session is for you. You’ll leave with a very clear understanding of the subject and what it means for you and your practice.

Full details of this low cost early evening seminar are here.

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.

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.

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?