Call me Pollyanna, but I like to look for the bright side in all things. And one of the best things about the current capacity issue in the accounting industry is that it’s encouraging us to collaborate with our fellow financial services professionals.

Buh-bye, competition

Maybe you’ve always been of the “there’s plenty of business for everyone” persuasion. But now more than ever before, it’s actually true.

There aren’t enough accounting professionals to serve the business owners who need us.

Of course, that doesn’t mean that every accounting or bookkeeping firm will be successful. There are a variety of factors that can make or break a firm.

Right now, though, lack of work is not one of those factors. In fact, the opposite problem exists.

Too much work can spell death for a firm. And because it’s not in an accountant’s DNA to turn away prospects who need our help, many of us end up with too much work.

So how do we solve this problem?

Collaborate to increase capacity

There’s no such thing as a bad client, but there are clients who aren’t a great fit for your firm. When capacity is an issue, knowing who you serve and serving them well is crucial.

But what do we do about our prospects who aren’t a great fit?

What do we do about our existing clients who are no longer a great fit?

If you’ve read this far, you know my answer is going to be to collaborate with another professional, or several other professionals. This collaboration could be a traditional referral partnership, or you could collaborate with others to take a fractional approach where each of you has a portion of the client relationship.

Whichever method you choose, you want to make sure you are choosing the right collaborators. And that’s where Profit First Professionals comes in.

Community for collaboration

Profit First Professionals is a membership organization of elite accountants, bookkeepers, and other financial professionals. Here, you will find a community of forward-thinking firm owners who work together to make their businesses stronger by helping their clients make their businesses stronger.

I’m not such a Pollyanna that I’ll say there’s no competition among our ranks, but I will say the minimal competition that does exist is friendly and not based on scarcity. And our “no dicks allowed” immutable law means you don’t have to worry about your collaboration partner(s) “poaching” your clients.

If you want to offer a highly sought-after advisory service, learn from other firm owners who want nothing more than to celebrate your successes with you, and solve your firm’s capacity issue through collaborating with other elite accounting professionals, then apply to be a Profit First Professional.

Friends, today I come to you with a plea.

Don’t join Profit First Professionals.

This elite membership organization for accountants, bookkeepers, and business coaches is not for everyone. I’d go so far as to say it’s probably not for you.

How do I know?

Your attributes

Forgive me for being so bold, but I kind of feel like I know you. Or, at least, I know some of your key attributes.

How? Because I, too, am a member of the accounting profession and have been for (mumble) years.

We’re alike, you and me.

Here’s why Profit First Professionals is not a fit for your firm:

1. You’re getting paid well for the value and impact you provide. You don’t want to earn – or keep – more money for the work you do. You don’t need to. Your retirement is fully funded, your kids’ college tuition is paid for, and you’ve made all the investments into property you care to make. Plus, you take numerous weeks of vacation each year, and so you’re not looking to earn more money while working fewer stressful hours.
2. Your CLIENTS are doing just as well as you are. Not only are they doing well, but you have a plan in place to make sure each client is successful and consistently profitable. And your clients rave about you for it.
3. You are the go-to authority on profitability in your niche. On top of that, you have a waiting list of top-tier businesses who are praying for an opening in your client roster.
4. You get regular guidance from an expert who helps you increase your profitability. Again, not that you want, or need, it (see #1), but you have regular conversations with a coach who has your firm’s best interests in mind. Heck, they want you to succeed MORE than you want to!
5. You’re not a fan of resources. Besides, you already have a full library of resources that help you set up processes, sell advisory services, and brand yourself in a way that makes you stand out from the competition. Plus, you know how to use them because that coach in #4 helps you brainstorm that, too.
6. You have more than enough people to talk to about business “stuff.” And you sure don’t want to talk to other people who are doing what you aspire to and are willing to share their best practices with you.
7. You’ve learned everything you ever wanted to learn. About business. About personal development. About profitability. Nah…you’re all good here, too.

Seriously, though…

Don’t click here to apply for Profit First Professionals membership. You don’t need it.

I know I didn’t need it to create what is now a second-generation bookkeeping firm. Nope…membership didn’t help me at all. 😉

There’s no question that the accounting industry is facing greater challenges than ever before (and, yes, we do remember the Enron scandal). We are in the eye of a perfect storm composed of three “pressure systems”:

• The increased push to implement client advisory services (CAS) in answer to the continued automation of compliance work
• A record number of accountants retiring as fewer students are graduating with accounting degrees
• Clients asking for price reductions, scaling back, or canceling engagements altogether as they tighten their belts to weather the tail end of the latest economic downturn.

Blame the industry?

It’s tempting – and easy – to throw up our hands and blame “the industry.” For decades – possibly forever – “the industry” has allowed itself to be undervalued, underpaid, have no boundaries with clients, and basically operate from a fear-based mentality.

Here’s the thing:

You are the industry.

Life lessons

What do you do when there’s a problem in your life that you have caused? Do you sit around, blame yourself, and wait for someone else to fix the problem?

Of course not! You get off the sofa and go to work to fix it!

If you need to fix your life, you fix the problems you’ve created.

And if you want to fix the industry that provides your livelihood – and the livelihoods of your staff – then you must start by fixing your firm.

Fixing your firm

So, how do you address the three “pressure systems” threatening to sink the industry? How can you find the time or energy to offer advisory services when you can barely keep your office staffed because the few qualified employees out there want more money than your clients are willing to pay for services?

Let’s chunk that down piece by piece:

1. Offering advisory services. Spoiler alert: You already offer advisory services. If you meet with your clients regularly, you offer advisory services. If you tell your clients to open a savings account for taxes, you offer advisory services. If you make software suggestions, you offer advisory services.

   In short, “finding the time/energy to offer advisory services” is a non-existent problem. You already do it. And if you don’t believe me, download our Client Advisory Services Roadmap and take the quiz to get your CAS score.

2. Keeping your office staffed. We’re not here to pretend there isn’t a talent drought in the accounting industry. There is.

   Wanna know a secret, though? There’s a talent drought in almost every single industry in the US.

   Baby boomers are retiring. Birth rates have been declining for decades. In short, there are fewer workers to do the work that needs to be done.

   AI doesn’t look like such a scary enemy now, does it?

   But AI can’t do everything. You’re still going to need people, especially for your client advisory services.

   Those people, though? They don’t need to have accounting degrees, and we’re not the only ones who think this.

   The few folks who are graduating with accounting degrees might want more money than you are currently willing to pay, and good for them for leveraging the laws of supply and demand. Focus on your client advisory services instead, and hire people with good communication skills. Then, use the revenue generated from your CAS offerings to hire that accounting grad or licensed CPA…if you still need them.

3. Getting clients to pay for services. This is the hardest of the three pressure systems to overcome because it requires outstanding sales skills. Something our profession lacks.

   We couldn’t even type that with a straight face.

   Getting clients to pay for your services is NOT HARD, and it DOES NOT require you to be a sales ninja. You just have to help your clients see you as an investment instead of an expense.

   Do this now:

   1. Pick a client.
   2. Pull up that client’s P&L or Expenses By Vendor Summary or any other report that shows a detailed listing of their expenses.
   3. Highlight duplicated services, excessive office supply spending, and other waste. Spoiler alert: You’re probably going to find that 10-25% of this client’s expenses are not necessary.
   4. d. Add everything up, email the client, and ask them if they want to schedule a call with you to discuss how they can save $XXX (or possibly $X,XXX) per month.

   Boom. In less than 10 minutes, you’ve shown your client how to pay for your services.

   (By the way, we teach our Profit First Professionals how to leverage this technique along with an ROI calculation to get clients to say yes to high-value advisory services.)

Fixing the industry

When enough individual firms change, the industry will follow. It’s inevitable. As we said earlier, you are the industry.

Wanna move things along faster? Cool…here are a few action steps for you:

1. Complete steps 1-3 above. Don’t wait for the end of busy season or to have a full day to work on it. Invest 30 minutes and do it now.
2. Measure and let us know your results.
3. Start telling your colleagues what you’ve done. Share your successes with them. Some of them will want to follow. You’ll create a snowball that will become an avalanche.
4. Apply to become a Profit First Professional. Yeah, we’re biased, but we believe the power and simplicity of Profit First and a Profit First Professionals membership is a keystone to changing the face of the accounting industry and small business.

Be the change you want to see. Fix your firm. Fix the accounting industry.

All the industry experts agree: implementing client advisory services (CAS) is critical to the ongoing growth and profitability of your firm. CAS not only adds revenue and profitability to your firm, but it is also a “sticky factor” that makes it difficult for your clients to compare you to your competition. Plus, with automation and AI becoming more prevalent by the day, higher-level CAS offerings differentiate you from the claims made by overly ambitious software companies.

It makes even more sense for tax-heavy firms with a high level of seasonality to offer CAS. This type of firm has historically relied on part-time or seasonal labor during the busy season, which can be difficult to count on year after year. Offering CAS can help you keep your top-tier seasonal team engaged year-round, reducing the risk of them not being available when you need them for the next busy season.

There’s an elephant in this room, though.

It’s easy enough to implement and deliver CAS during the “off season.” But what happens during the “busy season”? How do you manage your commitments to your CAS clients while processing tax returns for your compliance clients?

Do you have to choose to be a “CAS firm” vs. a “tax firm”? Should you put CAS on hold until after tax season?

Can you have the best of both worlds and finish the busy season with your sanity intact?

Reality check

As much as we might wish it to be different, tax-heavy accounting firms have a “busy” season and a “slow” season. Some firm owners embrace this seasonality and strategically design their firms so the revenue earned – and the hours worked – during the first few months of the year sustain them until the next busy season. There’s a certain allure to working all-out for four months and then having the rest of the year more or less “off.”

Not every firm owner wants this model or can sustain it long-term, though. Most firm owners supplement the busy season with other streams of revenue. Historically, bookkeeping services have helped these firms bridge the gap between busy seasons. But – unfair though it is – bookkeeping has faced increasing downward pressure in terms of pricing and perceived value by clients. Bookkeeping-centric firms have addressed this downward pressure by introducing CAS. And although tax-heavy accounting firms can – and should – consider offering CAS as well, these firms seem to be at a disadvantage.

The tax firm disadvantage?

Most bookkeeping services are not critically deadline-driven. Yes, you might have made a commitment to your client to deliver financial statements by the 15th of the month, and payroll is always on a schedule, but missed deadlines don’t typically result in exorbitant penalties that cannot be abated.

Tax services are different, though. With the exception of filing extensions – which, when used incorrectly, only extend the pain of the busy season – there isn’t much relief for the deadline-driven nature of a tax-centric firm. You must complete all the returns in a short period of time, or your client faces interest and penalties, which – chances are – your firm will have to cover.

So, while a bookkeeping-centric firm can easily manage deadlines while still fulfilling their commitments to their CAS clients, tax-focused firms are faced with the double-whammy dilemma of a high volume of work that must be completed in a short period of time. This can make it seem difficult – if not impossible – to offer CAS in your tax-heavy firm.

What’s the solution?

Do you put CAS on hold during tax season? That’s not fair to your CAS clients, and chances are they aren’t going to want to pay you for the months you aren’t working with them.

Do you stop offering tax services altogether and focus on CAS? You could, but that’s like throwing out the baby with the bathwater, especially if your firm is known for tax work.

Do you work more hours during tax season to serve both your tax clients and your CAS clients? I don’t know you, and I know nothing about your firm, and I can still tell you that’s not sustainable.

Do you hire more employees to serve everyone? Oh goodness, where do we even start with the pitfalls of this one?

So, how do you overcome the tax firm disadvantage? How can you offer CAS and still deliver tax services?

Both/and instead of either/or

The financial professional’s ability to see things in black and white is both a blessing and a curse. It’s a blessing in that we can be confident that 1 + 1 will always equal 2, a bank account can always be reconciled, and we can bring certainty to our own little corner of the world.

It’s a curse in that it often blinds us to opportunities.

There’s an easy answer to the question of how to offer CAS in a tax-heavy firm, and it’s this:

Tax work is CAS work.

Now, I’m not saying that you can plug numbers into your tax software, print a return, and say you offer CAS. But what you can do – what you should do – is make CAS an integral part of your tax preparation process.

You accomplish this by remaining mindful of your clients’ needs, especially in the throes of tax season.

For example, you notice your client owes $12,000 in taxes. You take another look at their return and find $1,500 in credits (this is CAS). Then you run a quick calculation and see that they would have saved $1,000 had they made an S-corp election, so you make a note to schedule a call with the client to discuss this (also CAS). You notice they only have $7,000 in their bank account to pay the $10,500 tax liability, so you add a note to talk to them about a tax savings account (again, CAS…and, ahem, Profit First).

Notice that you haven’t added much work to your plate. Yes, you’ve taken another look at the return to find additional savings, and you’ve made some notes of things to talk to your client about, but these steps are part of your process, anyway. You’ve just become more mindful of your client.

And that’s CAS.

It doesn’t have to be complicated to be impactful

Too often, we think we must put in hours of work in order to justify calling ourselves advisors. But the truth is, you can offer CAS to your clients, even during the busiest time of the year, with minimal impact to your workload.

Profit First is an excellent way to offer CAS in a way that is impactful without adding hours to your schedule. Profit First Professionals leverage a system that requires little time commitment on the part of the advisor, while helping the client achieve phenomenal results. And these results help you add revenue to your top line and profit to your bottom line.

Even though it’s the busy season, I hope you’ll apply now to start your Profit First Professionals journey. You could have CAS up and running in your tax-focused firm before the start of the filing season.