The Curious Case of ‘The Irreplaceable Accountant’

Frustrated businessmanThe real reason clients change accountants.

By Hitendra Patil
Accountaneur

Why do people change their accountants? A Google search lists a ton of reasons: Not approachable. Not available. Not enough business understanding. Not responsive. Not tech-savvy. Not predictable in changing fees. And some more…

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Is technological advancement adding one more reason hardly anyone wants to ever talk about? Perhaps we should add to the list “accountant not required.” To me, that sounds like an outrageous inference to draw. But several accountants tell me that they lose clients regularly. They tell me they got “replaced.” Technology could be part of the problem. But it's not necessarily the solution.

Clients don’t “replace” accountants. They replace what they get. They replace it with technology. They replace it with a lower price. They replace it with faster service. They sometimes replace what you give them – with some additional thing that you don't deliver.

When what you deliver to your clients can be substituted with a (perceived) equivalent, you are always in the danger of losing clients.

If what you deliver to your clients doesn't have you personally associated with it, then you are always in the danger of losing clients.  The what you deliver is fungible and replaceable. The who does the what is also replaceable when the what is a fungible commodity. The how it is done is, frankly, something no client cares about. The where you produce the work doesn't have much of an importance nowadays. The why behind client thinking is the million-dollar clue.

In other words, clients can replace a lot of things but can’t replace you - provided you make a real difference to the work delivered.

What would your client look for if he or she wanted to replace you with someone else? Someone with more experience? More expertise? More resourcefulness? Someone who is more approachable and available? Who has more understanding of the client's business model? More understanding of the client's current business situation? More understanding of the client's industry? Who provides better personal interactions with the client? Who can deliver more help with decision-support advice?

Did you notice that none of the above questions relate to the what you deliver as work? When everything else is more or less equal, clients face an uncomfortable decision - whether to develop a new relationship afresh with a new accountant. Unless there is a strong incentive that far outweighs the discomfort of changing the known and going into the unknown, it is not an easy decision for any client to make.

No one is really irreplaceable. But you can become the preferred one. Air, water, food, shelter – things required for sheer survival may be irreplaceable. But not people. People with uncommon skills, knowledge, expertise, or experience may be difficult to replace. But not impossible.

You want to be the preferred one among those who are difficult to replace. Here are some ways to do so:

  1. Record and analyze the past (accounting data) but pick intelligence from it to impact the future.
  2. Connect more. Connect regularly. Build and nurture relationships.
  3. Solve problems. Be an expert that clients first turn to.
  4. Help them achieve their goals and dreams.
  5. Provide better experiences.
  6. Provide accounting and tax insights that are critical for their business.
  7. Don't just deliver financial statements. Provide actionable intelligence for them (e.g. instead of saying "you'll have cash flow problem next month," state something like "you won't be able to pay some of the bills next months if you don't collect overdue payments immediately").
  8. Provide them opportunities. Give referrals to them.
  9. Pitch how you helped improve business for your clients, i.e. sell relevant outcomes to prospects.

Accountants today require new survival skills. Accounting and tax software is moving to the cloud. It is helping the connect-ability of accounting databases. It is resulting in automation of data collection, setting up rules for account coding, even use of machine learning and artificial intelligence. The need for small businesses and accountants to manually code transactions is getting reduced. The general expectation is that accountants won't have to fix messy accounting data anymore because businesses will be making fewer coding errors.

What, then, happens to bookkeepers and accountants? The prediction is that business clients, especially small businesses, won’t need help with data entry, re-coding of transactions (to fix the mess), bank or credit card reconciliations.

What will bookkeepers and accountants do all day then? The future is about advisory services. Small businesses, especially, will need support in learning to properly use accounting software; which industry specific software integrations they will need; what do their numbers really mean; and so on.

It all means that accountants will need to acquire new skills and sharpen some other skills.

  1. Your numbers skills will form the foundation of your advisory skills (consulting, coaching, mentoring, problem-solving).
  2. You will need to sharpen your words
  3. You will need to sharpen your speaking, writing, and presentation
  4. You will need to develop your people skills.
  5. You will need to develop a deeper understanding of human behavior.
  6. You will need to be client-industry trends-aware.
  7. You will need an ability to connect the dots, i.e. connect numbers with client business decisions and suggest business decisions to produce better numbers.
  8. You will need the mindset to form strategic partnerships to fulfill growing needs of your clients.
  9. You will need to balance your focus on after-the-fact analysis with providing insights for the future.

You will need the entrepreneurial accountant mindset. Don't be just an accountant. Be an Accountaneur.

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