In order to deliver Value Add Services (VAS), it is critical to get the foundation platform of your accounting practice right. But what does “getting it right” mean? This week’s article looks at how I did this for my own firm, and continue to do so for Clients today.
Why move towards Value Add Services?
There are many forces at work which actually mean the accounting industry is being forced to move towards Value Add Services (VAS), rather than choosing to.
These forces include:
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Compliance pressure to reduce prices
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Technology is re-educating clients on what accountants do
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Small-Medium business owners are screaming for more support for the following:
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Business Improvement
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Wealth Protection Growth
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Cashflow
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Knowing what the numbers mean
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Strategic Development
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Outside perspective – what are others are doing successfully?
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What I learned about Value Add Services during my time
When I was in practice, I learned that Growth and Transition could only happen once our practice foundation was tweaked and enhanced to specifically handle VAS.
Specific action required to include VAS
I found the following Critical Points had to be addressed in order for us to grow and transition into this new business model.
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Mindset (yours)
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Practice change must begin with your own self-leadership.
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I adopted a new, personal metric for success. I decided that what really mattered to me was that my clients appreciated me because I was being the best that I could be.
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Vision (the practice)
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You need to paint your own picture – sketch out what the future looks like and then colour it in. The clearer you are, the easier it is to create.
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“We wanted a firm that offered more than just tax. We wanted to offer business people more support in achieving their goals.”
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Outcomes (personal)
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What does each partner want back in exchange for their effort and investment?
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“I wanted interesting and challenging work that in turn created greater profits to be drawn for personal investment. And I wanted to do this through an exciting practice which our clients and team wanted to be involved with.”
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Goals (practice)
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Decide which KPI’s will drive the business, and measure performance on the way.
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In our practice we wanted to:
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double our turnover with two thirds fewer clients whilst working more hands on with our ideal clients.
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50% of turnover generated by Business Improvement jobs
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15 days Debtors
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zero WIP
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The practice had to be 45% profit after paying 5% bonus to our team
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Plan (practice)
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What do you need to do to make this happen?
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This was the scariest part for us, because we had to create it from scratch! We had to make mistakes and try different things to find what would work for us.
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As a result of implementing the above we built our new business advisory firm. Prior to these changes our business was 95% Compliance. Following the radical action we shifted to 40% turnover within Business Management and just 60% in Compliance.
