Establish clear rules of engagement

In the 4th of 10 steps of our Moving your practice to the Cloud series we enter the second phase – Expand. In the most recent post, we talked about who and how to move your first 2-3 clients to the cloud. Now we move to getting the ability to handle clients at scale and “Establishing clear rules of engagement with clients”.

Cloud accounting products, like Xero, let you leverage the power of mobility, collaboration and aggregation. Wherever you are in the world and whatever the time you can see all your clients in one place, work simultaneously with them, in their financial world, and collaborate closely to foster a stronger relationship. This reinforces why you are their trusted advisor. Therefore, you are able to scale up more quickly than traditional methods. However, you will need new processes to expand your firm’s client footprint successfully, which involve placing more of the financial responsibilities on the client. This ultimately frees up time to either provide more consultative services or to find and take on more additional clients.

Make a contract
While you may do this already, putting together a contract agreed to by both parties solidifies the relationship and inherently and subconsciously establishes ownership on the key collaborative elements of the financial management process. The contract needs to be clear on who owns what, with the responsibilities and obligations for each party. It lets the small business owner understand what they need to do and informs the small business about what they should expect you, the accounting professional, to deliver.

Onboard effectively
Now that the small business knows what is expected, as their trusted advisor your job is to help them gain the confidence to do these activities correctly and consistently on their own. Time after time, I speak to accounting professionals who find that spending just 30 or so minutes onboarding their clients pays huge dividends later. For a small business owner, their passion, their focus and their skills are in terms of what they sell and what the small business does. Their financials can be unfamiliar territory and they need help and guidance on what to do, why to do it, and how to do it. You need to teach the clients “how to fish for themselves”. By showing the products you collaboratively will use, the processes that they will be involved in and the exact tasks that they will do (e.g. complete a bank reconciliation with them), your small business clients will gain the confidence to do those activities themselves accurately – eliminating those hard-to-find data entry errors from occurring.

Be there for the client
After the onboarding is complete the key is to provide continual support and advice. This should be included in your pricing (or package) to your clients. You are doing it already (don’t they just pick up the phone when they need help as it is? Do you actually charge for each and every one of those calls today?). These conversations are evidence and reassurance to the client that you are their trusted advisor and you are there in their time of need. Accounting professionals may worry that the inclusion of this ongoing, included support will result in increased calls and decreased profits, but the opposite is true (you may see a slight increase initially during the first few months) and changes the conversations from solving self-inflicted problems to consultative advice and providing input prior to the client making mistakes. The ongoing communications are the key component that helps establish trust, helps lift you to trusted advisor status, and provides an ongoing opportunity to up-sell additional services.

Order of activities
Back to the scaling issue mentioned earlier. While the tips above are useful, the main method to scale is to divert any low value activities back on to the client to free you up to do high value, consultative, and frankly fun ones. These low value activities are the ones associated to the client in the contract, the ones you spend time onboarding and the ones that you’ll initially answer questions about. For those using Xero, you need to train your customers on (in order):

• Bank reconciliation
• Expense claims
• Invoicing

All these activities focus on getting the data in as fast as one can. The longer your client waits to enter it, the higher the chance the data never gets in and that critical info about the data is forgotten. This is one of the reasons Xero has spent so much time and effort on making bank reconciliation so easy, because it is so critical to getting and maintaining a real-time view on where a small business stands. Expense claims are second and, with Xero Touch, make it infinitely easier for an entire small business to capture expenses as they happen (just point, click and save). Invoicing is third and something most people do once a small business has the basics under control.

But how do we get the small business to do their part? This goes back to the contract. You need to spell out what they need to do, how quickly they need to do it, and possibly any penalties if they don’t (additional fees for you to complete or even removal of being a client). I have talked to several accounting professionals that have unbelievably successful and profitable practices even though their internal staff is small (handful), but their client count is in the hundreds upon hundreds. It all comes down to the agreed-upon rules.

One of the most interesting examples I came across when talking to Xero partners about this topic involved a partner setting the following three rules. These were rules that small businesses had to follow to work with him because they were the key to both parties working efficiently together. Folks either followed the rules or would need to find another accounting professional to work with. Pretty clear and pretty simple. The rules are:

• Bank Reconciliation: Bank rec every morning (takes a few minutes each day)
• Expense Claims: Pay, shoot, and complete expense claims in Xero Touch (takes seconds for each transaction)
• Invoicing: Create an invoice in Xero within 12 hours of it being raised

By setting these rules and including them in the contract, the small business knows exactly what they need to do day in and day out. For the accounting professional, it creates a simple, predictable and repeatable process from client to client that enables them to go from a dozens and dozens of clients to hundreds upon hundreds with minimal staff to support. This fundamentally changes the economics of running your practice.

So today we covered the basics on how to begin the process of scaling up your practice to capture more and more of the whitespace I talked about in the first blog. Our next topic will be on Value-Based Pricing. To kick that off in depth, you can attend a webinar on Value-Based Pricing that I am hosting this Wednesday, February 13th at 11 – 12 PM PST featuring Michelle Long, CPA and Owner of Long for Success.