We frequently observe that accounting firm owners care a lot for their clients. Still, many individuals who change firms believe they didn’t receive the appropriate care from their previous accountant. There is a clear disconnect regarding the accounting professional’s intent.

This is a phenomenon that we directly experience with some new clients. They typically tell us that their last firm wasn’t proactive enough and didn’t provide the value they expected. Yet, from interactions with hundreds of accounting professionals, we have seen firsthand that they generally care very much for the people they work with.

So how can the accounting profession provide clients with a high-value service that reflects the firm’s concern? The answer may be in the creation of an efficient client management strategy — an aspect that is often not given the proper attention as firms grow.

Client management is an essential aspect of leading and running a professional accounting firm efficiently and providing ongoing value to clients. Also as your clients are the firm’s source of revenue, they are obviously central to your company’s sustainability and growth.

It is a good idea to manage each clients’ entire journey versus expecting them to decide how, when, and what they purchase from the firm.

The client management ecosystem

A client management strategy has a model that each firm can follow to make sure they are providing the client care needed to keep their firm running and developing. Overlooking this ecosystem can impact resources and result in clients receiving a lower level of service.

There are three stages where client management is particularly important: onboarding, pricing, and more generally in your business model.

Client onboarding

This is the first step when you start working with a new client before they receive any services. Something that has stood out as good practice during this phase is to make sure the clients you take on are a good fit for the way you do business. This is key to building a sustainable firm that you and your staff enjoy.

The process of new client intake can be slowed down to a point where you can create a place for value judgments, where both you and the potential clients can decide to work together or not. When the sales process is slowed down like this, you can give comfort to the client while increasing the perceived value of your work.

Some aspects — or the entire process — can be virtualized, for example by using Zoom conferences and shared documents. It is now possible to operate a virtual firm, and with the current pandemic situation, it is even an encouraged practice.

The ultimate goal in the client-onboarding phase should be to align with the potential client, dive into real discovery of their needs, and prepare them to be priced.

Pricing

Pricing is the second phase and happens before the service begins. Determining value in pricing is generally a skill that takes time and practice to master. Here are some questions we suggest asking potential new clients to help define price:

• Why are you looking for a new accountant? Why now?
• What do you hope to achieve in working with our firm? What do you see in us that made you interested?
• How will we know this is successful?
• What has stopped your company from resolving this in the past? What might stop your company from achieving these results in the future?
• What will your company look like in two years?
• What keeps you up at night?
• What gets you up in the morning?
• What have you valued about past relationships with financial coaches or advisors?
• If working with our firm requires more time from you, can you commit that time? What are you willing to say no to for our collaboration to be a success?
• What are all the issues to be addressed?
• Did we get it right? What did we not ask that we should have?

Here are some practical observations on different types of pricing:

• Hourly billing lends itself to a faster, more commodity-based firm business model. Hourly billing takes no client assessment, no conversations as to what the client may value, and puts the client in control to let the firm know what to do. Hourly billing is the fastest form of running a firm, as it takes little time to bring new clients into the firm. Any client is welcome in a billing firm.
• Fixed pricing applies a single price to a service that is offered by the firm. Note that this is different from value pricing, where only the client has a price. Firms that offer monthly packages are doing fixed pricing.
• Value billing is another form of hourly billing, yet takes it one step further. When the bill is calculated, a value markup is applied if the client perceives higher value than when the services were started. This is a difficult model to operate within since the influence of value with a client begins at the outset of a relationship, not after the work has been completed.
• Value pricing is the slowest form of a firm’s business model. In a value-pricing firm, there are essentially no prices for services. Only the clients have prices since all services can (and are) sold to them for different prices depending on what they value most.

Firms do not have to exclusively adopt one model of pricing or billing but can instead weigh their benefits and apply the different models to different client groups or to different divisions of a firm (in large organizations). For example, firms offering advisory services would lend themselves to value pricing done by the owners of the firm, while the accounting and tax recurring revenue of many firms is suitable for a fixed pricing model.

No matter which model of pricing is chosen in your client management strategy, value is the core component to help the client and firm align on the goals and payment of the service.

Business model

The business model is the final phase where service happens and is the team structure you use to deliver services.

The way you manage your company’s capacity is fundamental to your firm being able to create efficient profit. There are several pillars to capacity management:

• Time and location: These are the more controllable aspects of capacity. A firm can request their team work a certain amount of time in locations that afford the greatest productivity and use of that capacity.

• Mind and emotions: These elements are generally not controllable. These are simply what the humans working in the firm bring with them each day. They are not strategic at all, and you never know when issues may appear and prevent the professional from focusing on their work. Leaders of the firm should be able to identify any team inefficiencies if they want to create profit for their growth, investment, and distributions. Managing and strategically predicting capacity is the key to turning the right amount of revenue into efficient profit.

• Project management: This is the management of the scope of your services, the assignment of work to the team members, and the management of related software products that this management resides in (like Canopy). Project management is the foundation of service and is how a firm owner knows what work is flowing through their firm and what is being managed properly.

This is a high-level overview of the client management journey, and we hope it helps as you navigate this topic. Client management is an important matter in any firm. Without a strong vision about what this means, both firm owners and clients will struggle. Tackling topics like client management sets a firm apart to provide immense value, which in turn justifies higher prices in the marketplace they serve.