Many Accountants struggle to stay on top of their work, especially during peak seasons. This can lead to unhappy clients and frustrated teams – a deadly combination. Longer term, there’s fatigue and despondency.
Sometimes, leaders have difficulty diagnosing the problem. We often hear:
* Maybe we need more people?
* Maybe we have the wrong software?
* Maybe we need more partners?
* Maybe we need coaching?
* Maybe we need better Accountants?
* And so on…
In most cases, this is a production problem so let’s look at 6 principles which underlie effective production in an Accounting business.
Principle 1: Understand the blend of required skills
Effective production in an accounting business requires these skills:
- Technical skills, meaning the knowledge and experience of Accountants or bookkeepers to prepare tax returns and financial statements. Some are highly skilled and experienced while others have more basic skills. These ‘technicians’ are sometimes referred to as “Grinders”.
- Managerial skills, meaning the ability to manage the Grinders by reviewing their work and implementing effective systems and processes. Also known as “Minders”.
- Interpersonal skills, meaning the ability to communicate effectively with clients AND your team to maximize client satisfaction and develop new opportunities. Also known as “Finders”.
Many Accountants entered the profession with ‘technical skills’ but limited ‘minding’ and ‘finding’ skills. In many firms, we see the blend of skills is skewed to ‘grinding’.
Principle 2: Have people play to their strengths
No-one excels at everything… but people doing what they’re good at will be more successful and have more fun. The most effective team is one where people play to their strengths.
Too often we see Grinders required to interact (or sell) to clients. Or we see Finders doing low-level accounting work. Other than the obvious inefficiencies, this creates low quality output and frustration. Even a small increase in alignment of roles and skills can make a BIG difference.
Principle 3: Take the time to learn about your team’s skills. Where will they excel?
Given the importance, we should better understand the skills of ALL team members. In some cases, this is obvious. Remember, the question is NOT what the team member CAN do. Most people can do lots of things, but not necessarily with great success. The question is where each person can really EXCEL. What are they naturally and uniquely good at?
You can learn this by asking the team or asking their colleagues. And there are tests available to reveal exactly this.
Principle 4: Put people in their roles
You can now allocate people to their specific roles. For example, those who excel as ‘technicians’ (grinders) should be focused on preparation of tax returns, accounting, producing financial statements, bookkeeping etc.
Your minders should predominantly manage the grinders by reviewing their work, ensuring quality, allocating work and so on.
Your finders should focus on client satisfaction through effective communication both internally and with the clients themselves. Ultimately this should lead to more business opportunities. Wherever possible, they should not do ‘technical’ work.
All of this can be detailed in job descriptions. The biggest single cause of frustration for many Accountants is having to work across the grinding, minding and finding domains. Imagine if Henry Ford developed the production line but put himself in charge of parts procurement, engineering, quality control, sales, marketing, factory management and finance!! Neither he nor the business would succeed in that case.
Principle 5: Develop performance metrics
Here’s an actual example of a business successfully implementing this model. Their Production Team includes 3 Accountants (Grinders) a Production Manager (Minder) and a Client Manager (Finder):
- This Production Team has revenues of $905K and is targeting $1 million in the coming fiscal year
- The increased revenue will come from raised prices, increased productivity by the Accountants and ‘up-selling’ by the Client Manager (who is allocating 45% of her time for this purpose).
- Gross Profit of this Production Team is 56%. That’s too low and the owner is targeting 66% by increasing productivity and lowering the cost base through outsourcing.
- The owners will establish another team to cater to increased demand in her market. In fact, she believes she can build a firm with three Production Teams generating total revenues of $3 million with a NET profit of $750K. We agree with her analysis!
Principle 6: Be clear on your goals
Each Accountant has different skills and income requirements and they should approach building the business accordingly. That requires completely clarity on the roles for which you (and your colleagues) are suited whether that’s technical work (grinding), managing and building systems (minding) or interacting with clients, especially so they invest more (finding).
With people in the right roles, you can calibrate your business to meet your income goals.
Sound simple? It’s not… and for many Accountants it requires a major mindset change from being an Accountant to being a Business Owner. With that mindset change, implementation will require persistence… and the rewards will follow!