The right fit does exist
Client and process management for small firms
Will Hill, MBA | August/September 2024 Footnote
Refi ning processes and evaluating the right client fit have long been conversations in accounting firms — but all too often those are just conversations. When action does happen, these two topics are regularly considered separate from one another.
In reality, not only does the right fit exist for each, but the client and process choices should fit with one another.
Client fit
Determining the right clients for a firm is fundamental to its success.
There may be more than one type of right client fit, but it’s important that each right fit be clearly defined.
So, how do you go about defi ning it and how is the decision made?
It starts with purpose of your business: Why does your firm exist? Some firm owners are deeply motivated to help “the little guy” who is at a disadvantage because of a complex tax and regulatory system. Others exist because they love solving deep issues layered with complexity. Neither of these are wrong, but they will clearly have a different ideal client fit.
The right client fit allows you to hit the financial targets you have for your firm. While this may sound obvious, it is often overlooked as too many clients are brought into the firm that don’t fit. Because the fit isn’t right, we end up in less profi table scenarios than planned — impacting the ability of the firm to hit the numbers.
The right client fit drives the owners closer to their targets of working or billable hours. My assumption here is that the targets are lower than the current day reality. This is also the start of the bridge to looking at processes.
As you look at client fit, always start with an assumption of the next new client — stay away from current client evaluation (that will come in due time) to help you stay objective through this element.
Process fit
The bridge that takes you from client fit to process fit is that of the services you will provide. Narrowing in on the services in alignment with the client fit is critical. You cannot achieve the benefits of standard (and right) processes when the possibilities are endless in terms of the services you could provide.
So, where do you start with looking at your processes?
Look at the documentation
In many cases the first step is to document your firm’s processes. We cannot truly evaluate a process just from observation alone. We must establish the standard and then inspect that standard.
Watch for repetition
There are many examples, such as data entry happening multiple times, work being reviewed multiple times or client data requests being planned for multiple times through a process. Any area of repetition is a candidate for a closer evaluation.
Observe the passing of control
Who is in charge at various points in the process must be identified. Control in the wrong hands slows the processes and cannot be planned for adequately. Sometimes this is the client due to data access, but sometimes this is also internal. If a person or level of staff is insistent on owning certain tasks that are not their best use you are ceding control to them when they may not be the best person to have ownership of that process.
Look at your pipeline management
You must always have people filling the front of the pipeline. Too often firms will push or pull their people in the workflow chain to help when it gets busy — but not send them back soon enough. When this happens, we can stall out filling the front portions of the workflow pipeline and end up with team members waiting.
Prioritizing these changes
Change management is a critical aspect of improving client and process alignment.
Look for the quick wins first: Where can you gain momentum and also support the value of changes with the team? It is your team (including yourself!) who will bring the most resistance to changes — so getting positive momentum is critical.
From there, I would strongly suggest making changes to the client base first, followed by process changes. This will help drive to a cleaner data set to see the impact of process choices.
When prioritizing changes, your firm should consider:
- Clients: Adjusting the mix of services offered and making necessary commercial adjustments to align with client needs.
- Processes: Identifying and implementing speed items and focusing on repeated work that can be standardized or automated.
- Timing: Considering the time of year and the firm’s workload when implementing changes to take advantage of the cyclical nature of the work.
- The human element: The intersection of people and processes cannot be ignored. Beyond the technical and procedural aspects, it is the people who drive the success of these initiatives. Employees should be equipped with the skills and knowledge necessary to adapt to new processes and they should feel valued and involved in the change process.
Change as a professional habit
So many things are in constant motion: client needs, staffing, technology, regulations. Simply looking at the these and trying to play keep up only adds layers of complexity and frustration. However, a regular review of clients and processes together will allow your firm to stay focused on keeping in alignment with the goals of the firm in the midst of the rest of the changes in your environment.
Will Hill is the founder and owner of Will Hill Consults, LLC, a coaching and consulting firm serving the tax and accounting profession. Through his 20-plus years in the profession, Will has taught countless classes on firm management, change management and advisory services.
