Friday, November 5, 2010

A Marketing Approach for Accountants

In their excellent book The Trusted Advisor (Free Press, 2000), Messrs. David H. Maister, Charles H. Green and Robert M. Galford provide a roadmap for earning the trust and confidence of business services clients and, as a result, the opportunity to achieve personal success in advisory professions.

In Chapter 18, “The Role of Trust in Getting Hired”, the authors suggest that it is the service provider’s professional obligation to keep an eye out for improving a client’s business, and that the service provider should not let getting paid stand in the way of contributing ideas for improvement.  The authors believe that such behavior contributes to the loss of new work and damages the client relationship.

Although I was unaware of this book until last year, I have practiced this marketing approach with success during my several years in the SMB (small and medium-size business) financial advisory business.  As the authors state and I have learned, “if given any choice at all, clients prefer to buy based on a sample.”

For many years I used spreadsheets as the tool to create macro (top level) analyses to start a discussion with SMB clients and prospects on topics such as operating and financial goals; mergers and acquisitions; bank credit facilities; capital raisings; etc.  While this marketing approach was effective, it was unpaid and I hated the preparation time (opportunity cost) involved in conforming old sheets to new situations; the endless proofing and presentation anxiety (nits) associated with the process; and the inability to instantaneously create and present alternative scenarios during (not days after) client and prospect meetings.

My frustration with the spreadsheet method led me to develop the corporate finance software located online at  I designed it to fit my need for fast, web-native (always available), presentation-oriented planning, analysis, and valuation tools for use in CEO/owner level marketing and collaboration.

Virtually all of the clients I have worked with over the years have had established relationships with accounting firms.  Those firms performed annual audits or reviews, prepared tax returns, did estate planning for the owner(s), provided stock brokerage services to management, etc., but they were not hired to participate in lucrative advisory projects I or someone like me was hired to do (e.g., bank financing preparation, sale or purchase of a business, private equity capital raises, etc.).

In some instances I suspect the accountants did not want the business because they were not comfortable with the projects’ subject matter.  In others, I know that the accountants wanted the business once it surfaced, but they were not interested enough to contribute ideas on the topic before their clients were compelled to act.  Their clients recognized this “us too” response and hired someone else - firms like mine.

My view is that one of the reasons why the “interested” accountants failed to provide ideas before their clients looked elsewhere for assistance was the accountants’ lack of an efficient process to analyze possible risks and opportunities relating to the future of their clients’ businesses.

Because of their client relationships, professional status and financial expertise, accountants have a substantial first-mover advantage when it comes to helping clients identify financial risks; formulate plans and approaches to realize the clients’ future goals; and convert this assistance into opportunities to provide various types of paid advisory services.  Success in these activities not only improves the accountants’ billings, but it also positions the accountants as a resource on a broader range of financial matters, which in turn may lead to additional service opportunities.

Since one of the topics business owners care most about is the future success of their companies, a logical first step for accountants in pursuing additional service opportunities is to take a forward looking view of their clients’ businesses.  That forward look, and iterations of it, can be explored using the standard dashboards of finance - forecasted financial statements and performance metrics.

The statements and metrics generated do not necessarily have to be shared with clients - their purpose is to provide the accountants with insights into financial risks and opportunities that the clients may be facing so that the accountants can begin an informed conversation with the clients on those subjects.  Even if the issues are outside the scope of the accountants’ practices, by identifying the issues the accountants can refer, with permission, their clients to others who can provide the needed services.  By doing so, the accountants gain the goodwill of their clients and strengthen their professional referral network.

What would be an example of a client risk that an accountant may discover by looking forward?  Suppose a client tells the accountant that his plan is to increase sales by 20% next year.  The accountant models that sales gain and determines that a sales increase of that size will probably cause the client to exceed, at some point in the year, the borrowing limit of his current bank credit agreement.  Identifying that financing risk and explaining why it might happen could lead to a paid project to help put a data package together for use in negotiating a larger credit facility now - before the client is faced with a credit crisis, wonders why he was not warned of the risk, and hires a firm like mine to fix the problem.

There are several other finance-related topics on which accountants can provide ideas and insight that can lead to paid advisory assignments, if the accountants take a forward looking view of their clients’ needs.
  • For undercapitalized clients, accountants can model/analyze intermediate and long-term financing/ownership alternatives, including the sale of additional ownership interests and related ownership dilution.
  • For clients whose ownership group is approaching retirement age, the accountants can review with clients the principal drivers of business value and important aspects of sales of businesses such as pricing, transaction terms and tax planning.
  • For smaller clients who limit their planning to the current fiscal year (e.g., some QuickBooks-using clients), the accountants can provide assistance in creating multi-year financial forecasts in order to help align the clients’ financial objectives with their strategic vision, and to demonstrate the implications of financial decisions on operating flexibility and owners’ wealth.
  • For start-up businesses (either for clients or as a volunteer resource) the assistance could entail helping entrepreneurs develop reasonable multi-year financial performance goals for their business, and helping to determine the debt and equity capital needed to achieve that performance.
If accountants are uncomfortable initiating conversations with their clients about forward looking financial risks and opportunities, they can prompt that discussion by providing clients with the tools to do their own analyses and inviting users to contact the accountants for assistance.  Many firms have taken a somewhat related path by providing various types of (less strategic) calculators on their websites.

Final Thoughts
I have prepared all of the macro-level analyses described above (and then some) using, in chronological order, thirteen column ledger paper, electronic spreadsheets and the software located at  The problem with the first two tools is they are too time-consuming (and therefore too expensive) and too non-standard to be the foundation of a sustained marketing/client collaboration program.

The third tool is professional grade, very fast and standardized.  I designed it specifically to create forward looking macro analyses of financial issues that my experience indicates are of the most interest and importance to business decision makers.  Both accountants and their clients will benefit handsomely from its use.

If you would like to discuss the ideas contained in this post, or would like to tryout our software located at,  please send me a note at  If you are a client or friend of an accountant (accounting firm), please send her/him/them the link to this post.

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