Three Skills Every Accountant Needs to Differentiate and Scale Their Firm

Reason #2: Most clients (especially business owners) would rather their accountant give them advice (instead of simply being a recorder of the past).

Reason #3: There’s a ton of competition in our space because the barrier to entry is low and because there’s a plethora of so-called “tech” companies trying to automate our jobs away.

Simply put, there are so many other options for clients to “get the books done” or “taxes filed” than there used to be.

So, to differentiate and scale your firm, you  must be able to master three specific skills.

Skill #1: Messaging Skills

Skill #2: Giving Advice Skills

Skill #3: Scaling Skills

Let’s look closely at each of these.

MESSAGING SKILLS
To successfully differentiate your firm from other accounting firms (as well as the “tech” companies), you must be able to articulate a message that resonates to your target audience as compared to a message that falls flat.

The message that many accountants indirectly or directly communicate to their potential clients and ends up falling flat is: “I can do your taxes cheaper/faster/better.” or “I can do your books cheaper/faster/better.”

The problem with this message of “cheaper/faster/better” automatically commoditizes your offering. In other words, if the qualifier for being a good accountant is that you’re cheaper, you can do it faster, or you can do compliance/transactional work better,  then you’re automatically seen as a commodity in the eyes of your prospects.

A commodity is anything that the “marketplace” deems as equivalent with little to no regard to who delivered it – think beans, toilet paper or gasoline. When something is viewed as a commodity, price is usually the deciding factor in who gets the sale.

When price is deciding the factor in who gets the sale, two things happen:

1: You, as the accounting firm, won’t be able to substantially raise your prices because there’s always someone else that will be glad to take the low-priced work.

2: For you to get paid more, you must either work more hours or take on more high-demanding and low-paying clients. At the same time, you can’t raise your fees because of #1 above.

So, how should you message instead?

To answer that, let’s look at a quote by Theodore Levitt, a Harvard marketing professor.   He said this, “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole!”

Most accountants are selling the drill (commoditized bookkeeping and tax work) when there’s an entire population of potential clients who are (secretly) begging for their accountant to give them something else altogether: advice.

GIVING ADVICE SKILLS
Most, if not all, of your clients (and potential clients) want you to be someone who can give them advice on being financially successful.

Said in a different way: Most accountants place too much emphasis on being a great compliance or transactional accountant and are not placing enough emphasis on what your clients really want: advice.

This is because of three reasons:

Reason #1: Most accountants aren’t getting paid to give advice.

Reason #2: Most accountants are insecure in their ability to give great advice (after all, most accountants were simply trained in being a great accountant).

Reason #3: Most accountants have way too much compliance or transactional work on their plate already which prevents them from giving advice even if they wanted to.

However, to truly stand out and show your worth, you need to provide what your clients want. And, almost all clients (and potential clients) want advice. Specifically, they want someone that they can trust, to guide them, to accomplish whatever the client deems as their version of success (as this will be different for every client.)

In short, people want a human that cares about them.

If you can do this well, you’ll have no problem scaling your firm because you’ve suddenly flipped the script on how your clients will view you.

The moment your clients stop viewing you as a recorder of the past and start viewing you as someone that can help them have a successful future, then you’ll be on the right path to having a successful practice.

SCALING SKILLS
Once you are adept at messaging and giving advice, the third skill you need is the ability to scale your practice. If you cannot do this, you’ll stay stuck in “The Accountant’s Trap.” This is a term we use at The CFO Project, where you’re trading time for money. The only way to make more money is to either take on more clients or work more hours. This is a trap.

The way to escape the trap? Transform your practice into one that’s scalable.

Let me first define what scaling is. Scaling happens when you can increase revenue without a substantial increase in costs.

If you want to escape the trap, you’ve got to structure your services in a way that is scalable.

Why? Because most accounting firms are providing services that are simply not scalable. Let’s look at tax services as an example.

The only way to increase revenue through tax services is to process more tax returns (either you spend more time yourself or you hire staff). You cannot raise prices because tax returns are perceived as a commodity (see above).

At the same time, you cannot significantly decrease expenses (mainly time involved) without devaluing your service. In other words, tax services require a certain amount of work involved regardless of how much you’re getting paid. And since you can’t raise prices (again, see above), it’s not like you can reduce the amount of work involved to keep your margins high enough.

Thus, tax services are not scalable because you’re increasing revenue with a substantial increase in costs (your time + payroll).

This is where applying the three skills mentioned above is key when it comes to scaling. You’ve got to increase revenue without a substantial increase in costs while de-commoditizing your services so that you can increase prices.

In summary, here’s how to use the three skills to differentiate and scale your firm:

1. Communicate a message of “I can be someone that [my target audience] can trust with helping them make better financial decisions so they can accomplish [what target audience deems as success].”

1. Become good at giving advice so that you can charge for that advice. That way, your clients (and potential clients) will view you as a trusted guide rather than simply a recorder of the past.
2. Re-work your existing services to become scalable so that you’re able to increase revenue without a substantial increase in costs.

If you can do these three things, you will be on the right track towards successfully differentiating your firm.

Not only that, but you’ll also be able to escape The Accountants’ Trap where you’re simply trading time for money. The bottom line: You’ll own a scalable firm instead of your firm owning you.

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Adam Lean is the CEO and Co-Founder of The CFO Project – a training and certification program that trains accountants, CPAs, bookkeepers, and Enrolled Agents on how to start or add a CFO/Advisory service all so the accountant can escape the Accountant’s Trap, have a scalable way to grow their firm, and finally earn what they’re worth. To learn more, go to https://thecfoproject.com.