The title of this article is the tagline of our firm. It's a constant reminder of the purpose behind our industry and our firm. The numbers we deal with every day are outcomes of relationships, processes and knowledge.
Numbers are simply depictions of the good and bad interactions of these three core concepts. As CPAs, we often get caught up in the creation of a sheet of numbers, but this is not where our strengths as an industry lie. Our strengths are found in our ability to use and interpret numbers to help our clients make better business decisions.
I know you've heard that before. We never seem to offer our clients what we are actually best at. Let's dive deeper into the end result of our great work, which is to help our clients make better business decisions, not give them a big sheet full of numbers.
When I talk about relationships, I'm talking about the relationships inside of the client's business. These are the interactions that are causing transparency and accountability that lead to dollars, or the loss of dollars, in your client's pockets. These relationships can also be known as the "culture" of the company. Truly, the culture of a company has a life of its own and is separate and distinct for each and every client you serve (no matter how big they are). Be aware of this fact so you can address their numbers from the standpoint of their culture.
The understanding of processes should be foundational to your clients before they spend money in any way (and before you offer any counseling and consulting services). CPAs have a seat at the client's table to help them understand this. Whether it's purchasing a new computer system or hiring a new staff member, understanding how the process will be improved or hindered by this cash outlay is an educational opportunity for you, the CPA practitioner.
When I talk about processes, I'm talking about the intangible flow of information through your client's business. We, as our clients' trusted advisors, can help our clients identify these processes, make them tangible, document them, visualize them, delegate them, monitor them and ultimately improve them.
Unless we help our clients identify these processes, our clients are outlaying cash for so many "solutions" that can actually cause more problems than they solve. Addressing your client's processes as the core foundation of their business can bring them greater awareness to the ultimate numbers that show up on their profit and loss statement at the end of the month.
If you build a home, you will begin with the unseen foundation first. If you don't get that right, then the beautiful columns on the front of your home will eventually crack or fall down. And if your foundation is not put in correctly, then no matter how much money you spend on those beautiful columns, they will continue to break and crack. Address the foundation of your client's business just like you would your own home.
Knowledge is another intangible asset that we fail to focus on, both in our own firms and with our clients. Lead your clients to capture the "relationship intelligence" floating around in their companies by helping them understand the value of the collective knowledge of their staff, their processes, their history, their patents, their education, their contacts, and anything else that brings value to their business and work. Ultimately, these intangible assets can turn into goodwill if their business is ever purchased. When I talk about knowledge, I'm talking about the knowledge of the organization as a whole, not an individual owner or a department.
Possibly, a "knowledge audit" could be done to capture the knowledge of the organization. The creation of this knowledge audit will hopefully lead to an improvement of the best practices of the company, and how to improve over their competitors.
One way to harness the knowledge of your clients' businesses is to help them install a customer relationship management system. This could be a cloud-based software system that tracks all customers and contacts, the interactions with them throughout the whole company, and how these interactions could have been achieved more effectively and efficiently. And knowledge is best leveraged when it is accessible at the right time. Tools such as a CRM system that are maintained properly will provide this knowledge proactively, instead of making you look for it when you need it.
We often do the same things we've always done (to our detriment) because we have not harnessed the innate knowledge deep within our companies.
TRANSFORMING OUR FIRMS
So how do we actually make money focusing on the relationships, processes and knowledge that we are truly supposed to be delivering to our clients? After all, it seems like we get a check from a client every time we deliver a compilation or an audit report or a tax return. But I believe our clients want to pay for the understanding that comes from those deliverables, not the reports themselves. They just don't know how to tell us this. And, truly, I don't believe we know the difference either.
I believe we can transform our firms into practices that create new and productive services that drive heavy value to our clients. But how? We have to know what they need first, by studying their relationships, processes and knowledge. Then we have to create a service to extract this information for our clients. Then give that new service a name (and maybe a logo), and a price tag. Then begin your "beta testing" with your clients. Some new services will work, and others will not. Document what you've learned and continue this innovation firm-wide. Everyone should be involved, and every staff member should have a seat at the table of making your firm's offerings better.
You will not always like what you discover about yourself or your firm. But this stretching will make you a better firm owner and it will improve the transparency you have with your staff and your clients. I believe you will ultimately learn that numbers tell stories, and that you can bring these stories to life for your firm and your clients!
Jason Blumer is âhead creative dudeâ� and managing shareholder at Blumer & Associates in Greenville, S.C. Reach him at firstname.lastname@example.org.
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