Re-Engineering Your Firm for CFO Services

Ken Shultz, founder of Calgary-based accounting firm Integra Solutions Group, recently commented on this blog that the services his clients are asking for have changed. He mentioned that while it is true some still want just the standard financial and tax-related assistance he has been providing for some many years, he is now receiving requests for more “advice and commentary.” To be exact he wrote: “They have gone beyond, 'What is the best thing from a tax perspective?' and have arrived at, 'What do I need to know and what do I need to do to achieve my strategic plan?'" Ken also went on to mention that he enjoys this type of work. The challenge came in re-engineering his staff to become a strategic team in order to fulfill these requests.

Today’s new business owners managed their finances during college with mint.com and didn't have any use for a filing cabinet. They began tapping phones to exchange contacts and pictures, by-passing standard forms of communication like hardline phones, Cable TV, and fax machines. My children have not lived at home for several years, but still have their mail come to my house because they never saw a need to alert companies to their new address. Occasionally I will text them (they rarely answer the phone) to tell them something has arrived, and invariably I get, “No worries, I do all that online….”  I then kindly remind them they should notify the entity sending the mail that they only want e-statements or e-bills. Since this is like housekeeping, I can only assume that they think I'll clean that up for them. Good luck with that, kids.

But honestly what Ken wrote and what the current new business owner wants is far from the traditional accounting support systems that are in place in the majority of small- and medium-sized firms.  Sure, they all need a tax return, but that is a commodity, easily shopped to the lowest bidder.  Sure, they are all too busy to reconcile accounts because as new business owners they are wearing multiple hats in order to grow their business. Getting that credit card statement expensed and reconciled every month is not top of mind. What is top of mind is how those expenses and revenues are impacting their ability to sustain an ongoing initiative to grow the business.   As much as they want that information, it is not something they have the mind or time to deal with in detail.  They need help.

Erik Asgeirsson, during a 2012 AICPA panel discussion, stated, “The benefits of moving beyond transactional work such as tax preparation and quarterly statements are clear—clients are willing to pay more for business-shaping work such as cash-flow analysis, virtual CFO services and advanced financial planning.”  Many more actual practicing firm members, at the same conference, spoke of how they were able to efficiently double firm revenues by using technology tools to assist them in providing their client requests for strategic planning assistance.

Education and re-engineering the firm come before taking on these endeavors with your clients. Education isn't only for the firm leaders, but for all the employees that participate in providing this service. 

For many SMB accounting firms, this is a new paradigm still.  MoneyPenny, LLC ran a survey of 175 firms whose average size was 3-5 CPAs/accountants.   The results were somewhat surprising. These firms had asked MoneyPenny to present a webinar to their group on technology and how they could utilize it in their CFO practices.   This group had come together to work on building forward-looking firms and assisting their clients as “Virtual CFOs.”

Technology was a broad term, and MoneyPenny hoped to focus in on a particular area where this group felt they needed assistance.  There were seven survey questions in all.  Six asked about the specific Digital/Cloud based technologies they were currently using, and the last asked what they hope to learn from the webinar.

Rather than narrowing the focus, this survey showed that there are still many firms that just don’t get what their clients want and need.  They ask about technology as if by implementing the “CLOUD” alone would be the only tool they needed.  The questions were posed in such a way as to compare what they were using with how they were using it.  90% of the respondents had implemented digital technologies of managed servers, ASP Hosting, DMS, and CRM.  Only 10% of those were connecting all that technology, having their staff utilize it fully, and utilizing the results to provide the “Virtual CFO” office they sell to their client.

Before your firm takes on the first client for the strategic services idea, take a look at your internal operations.  Technology is not the first fix.  Re-engineering how and why you service clients is step number one.   Make sure your internal resources are up to the challenge.  As Ken Shultz did, prepare to be the quarterback that motivates your people to be part of the solution.  I have been to Ken’s office in Calgary.  Those first few months were a struggle.  During that time, Ken kept himself focused as he moved the mindset of his staff step by step.  I remember the day his lead bookkeeper, Kim, called and sent me an email with an image of her new office. She had an amazing view of the Rocky Mountains and was laughing.  A total turnaround from the person that kept saying the year before, “no way this will happen.”  With her wicked sense of humor, no doubt she is the one that added this playful page to their client support site: "Have some fun games, games to play when you should be working."