Software companies and associations all have their own vision for the future of the accounting practice. Intuit’s version, the Firm of the Future, is leading a marketing campaign to help accountants understand the changes ahead.
Are the changes so different for accountants in the US than the rest of the world? I spoke with Darren Root, CEO of Rootworks, a US coaching club for accounting firms, who is the architect of the Firm of the Future, a six-step methodology to modernising practices.
Darren gave one of the keynotes at Intuit’s conference in San Jose last week and we discussed how accountants can tackle two key steps, technology platform and sales and marketing.
You can listen to the audio of the interview below or read the edited transcript.
Sholto: Darren you spoke about this concept of the firm of the future that you’ve trademarked. Can you run through the six top steps that form part of that?
Darren: Absolutely. So, Sholto we look at a Firm of the future as not having done things the same way that it has always been done the profession. So what we’ve really done is try to perfect six steps towards the firm of the future. We like to call it a next generation accounting firm.
Step number One is just to develop this concept of what is the future you want. You know we find that 95 percent of firms have never taken the time to develop a vision or mission and articulate that to their teams. They have no idea exactly what they want to be when they grow up. And that’s one of the biggest challenges. People don’t know what they’re aiming for and they just go into business. So that’s big challenge number one, we call that our first step.
After that the second component is what we call the business model where the platform in which the firm does business. But the business model is really driven based on the future you want so those are kind of hierarchical.
Step One future you want, Step Two is building the right platform, we can talk more about that. Step Three then is becoming a better leader. We say in the US right now that the biggest challenge that firms deal with or what we hear is they have staffing problems. Our take is not so much that firms have staffing problems as they have leadership problems.
They don’t know what the future they want, they haven’t built their business model and yet they’re trying to solve to millennials the same thing that was sold 30 years ago and millennials don’t want to buy it anymore. And so we help firms think through how to be better leaders which improves their staffing overall when you create jobs that people want.
So step Four then becomes branding. After you understand the future you want, after you understand your business model, you’re leading, now you can create a brand of people are attracted to. You can’t start by creating a brand. You have to start by understanding what your foundation is.
So branding is the next component which we should talk more about. The component after that, that branding leads you to the ideal clients – getting the right clients. We find that over 50 percent of clients in an accounting firm are clients that the firm wished they didn’t have but they just take what they get and that creates all kinds of chaos.
And then the last component is it leads on to what we call ideal days. The firm owner and the staff get to spend their days the way they want to spend them. Versus just coming in and grinding it out in a job that they don’t love. So our whole goal is to help firms build a business to support the life that they want to live.
Sholto: Fantastic. So, the platform one is really interesting one to tackle because how accounting firms choose, there are so many different types of programs coming out and so many more providers. Do you have any formulas based on the practice they want to be? Or how do you pick that software?
Darren: I like to tell firms that Step One the future you want is something that doesn’t change that much but your business platform, your business model does. This is something that you have to be on your toes because there’s something new coming out all the time. We’re evolving with technology. The accounting firm owner’s got to be able to spend the vast majority of their time thinking about their business model and finding new ways to do things better.
What I think is important is understanding, if you understand the kind of client you want, you understand the future you want and the kind of client you want, that would drive really the platform that you need to build.
There are certain givens I believe today in this platform. Your website has got to be a place to do business. We have great examples of this whether it’s Chase bank or Fidelity or Schwab. Go to the list of financial institutions or websites are places to do business today. American airlines is a place for me to do business, as is Delta. At the heart, we know that the website has to be a place to do business.
And how you do business on your website is really expanding from scheduling appointments to video conferencing to approving bills, to launching QBO – Quickbooks Online. All those pieces they have to come together and sort of a seamless system based on the clients that you want to serve and that system is constantly disrupted by new technologies.
So you have to figure out how to implement those new technologies in a seamless way so it doesn’t feel disruptive to your customer.
Sholto: One of the other things you mentioned that I find really interesting is this one around branding because it feels like accountants haven’t had to work that hard on sales and marketing. Once they’ve hit several hundred clients then they know they’re going to be back every year. What I’m seeing is all this disruption and new types of services and new types of programs. So what is your advice to accountants who have never really thought seriously about their image or their brand?
Darren: So Sholto I think you’re right. Most accountants have not had to worry about picking up new clients. They get a base of their business and they keep generating. The problem that we see is we know that over half of those clients are the wrong clients. This is where branding comes in.
If you build the right kind of brand to attract the right kind of client, it totally changes the game for your firm. Having a 100 percent ideal clients versus 50:50 changes your entire work-life balance. An example is maybe your goal isn’t to work more during tax season in the US but if you keep adding tax season clients, you keep getting the same pain that you’ve always got.
So why not allow your branding to go pick up the kind of clients that you want. Your branding should support the kind of life that you want to live. It should support getting the right kind of clients so that you can work the way you want. If you want your days to be even, you want your year to be spread out, you want clients in your business platforms so you can work anytime from anywhere, that’s where your brand comes in.
Sholto: Do you have any specific advice around tactics on sales and marketing or programs that help with sales and marketing? Because I have always noticed that CRM seems to be an area in accounting practices that – there doesn’t seem to be anything that really fits the hole exactly.
Darren: This isn’t as complicated as it seems. As I have said earlier, accountants don’t, we don’t need a thousand clients. In order to have a million-dollar firm, and put a half a million dollars on the bottom line, you need 200 clients. We know that.
So go find out for what niche you want. And there’s a whole set of niches. In my particular case, we like optometrists, we like dentists, we like doctors, we like attorneys. Make a list of all the attorneys, optometrists, dentists and doctors that you don’t work for and then market to them. Mail them something. We mail them a magazine branded for our firm every other month. Put the little hand-written note on it.
Again, I don’t need to pick up a thousand of these. If I pick up 10 or 20 a year, my practice keeps going in the right direction, selling the right kind of services. So don’t over complicate this. Identify your target markets and then market to your target markets. That’s all it is. Make sure your website supports your message. Then send the targeted materials that support the products that you want to sell these people. That’s all it is.
Sholto: Fantastic! Well done. Well, thanks very much for your time today.
Darren: My pleasure, Sholto. Thank you.
Disclosure: Intuit paid for my plane ticket and accommodation to attend QuickBooks Connect.