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Becoming a CFO for your Client Base

Posted by Gayatri Wood on 04 Dec 2015

Becoming a CFO

With the shift to advisory services, many accountants are looking at how they can provide the regular strategic advice needed by their clients to scale their businesses - how to become a CFO for their client base.

We asked Guy Pearson, a Chartered Accountant with over a decade's experience in professional practice, winner of Anthill's 30 under 30 in 2014 for his start-up Practice Ignition, and founder of Xero’s most awarded firm Interactive Accounting, for his practical steps on how to become a CFO for your client base. He's focused on the importance of looking forward with your clients and some handy hints on how to do so.

So, you’ve taken the step towards running a complete cloud practice. You’ve moved to fixed/value-based fee structure and all your systems for your clients are now moved to the cloud, or on their way. Are you wondering what your next level of change is? Or, how to build unique value-add service for your clients? Or, how to build a high-value niche advisory group for your practice?

Your clients don’t want to be expected to know everything.. that’s why they have an accountant...

You don’t go into a barber, take the clippers and cut the barbers hair. You pay for the service they provide you, that they know what they’re doing… remember that.

Let’s take a group of your clients in a particular industry to focus on and consider a one on one vs. group approach to this level of advice, look at some basic metrics to review, conversations to have and the business opportunities that can result.

Clients vs. the industry

What data is interesting or valuable for a client as they want to grow and improve their business to be industry leading?

Am I hiring the right balance of people (sales vs. marketing etc.) for my industry?

In Spotlight Reporting, you can bring in the # of sales and marketing people per $ of revenue. Then you can add in the industry average a corporate research survey on revenue per head to provide some context on the answer to this question.

Is my gross profit $ or % in line with industry high performers, what band do I sit in?

You should be able to gain access to industry data for your clients state/national industry to prepare this report and sit down and analyse the drivers of Gross Profit and set some GP target goals for future bodies of work.

For instance, if GP target is 50%, then there’s a few key things you can look at:

  • Ensure your clients quoting process is detailed enough and weighting in all job costs with a margin minimum of say 60% to allow for a buffer;
  • Review how alterations are dealt with in the contract, so your client doesn’t wear the cost without the revenue;
  • Look at suppliers and terms, people costs, storage costs and anything else that sits above the GP line.

Revenue per head

In most industry reports, there is usually listed average head of staff in a company profile. From there you can work out the average revenue per head and compare this against your client and work on what you can do to improve this metric.

These are just two basic examples of client vs. industry to start a conversation into more valuable work that requires more management accounting and systems aware approach.

Clients vs. Other clients in the same industry

Now let’s look at what you could if you have a niche focus within your practice. Imagine you had five high performing clients in the same industry.

  1. Average revenue per head
  2. Do I spend the right amount for a particular position?
  3. Profit ratio’s benchmarked
  4. R+D Spend per head
  5. Technology spend

From this, you can start to “write the book” on best practice of running these types of businesses. You can include things like legal templates and recommended technology stacks, and you could provide information on:

  • Best practices
  • How to start a business in this industry
  • Mergers and Acquisition
  • Succession planning

And not just on a generic level….Things you may need to do

  • Upskill
  • Learn new software
  • Look at your staffing and resources
  • Training for your team

Yes, the above costs time and requires research and development… but, Apple didn’t become the world’s most valuable company by doing the same thing year after year. They spend 20%+ on research and development, or billions every year ($4.5Bn in 2014).

So it may be wise to take a leaf out of their book.

Opportunities at an individual client level

Lastly, you will need to have your first conversation with your clients about the future of their business and what it is that they want to achieve. This should be a free conversation, with no strings attached.

  • Why did you start your business?
  • What’s your goal for the business in 5/10/20 years?
  • What steps have you put in place to achieve this?
  • When are you looking to take a step back to being an owner?

You need to take notes of this and ask them what they’d like to achieve in a perfect world. Come away from the meeting, make a list of items to knock over and formalise it in an email and give other examples of other companies that have done similar things and gauge interest in doing the same.

Opportunities that may result in a group

Sometimes clients may prefer a lower individual spend in combination with a facilitation of networking with their peers. Think about the accounting workshops like Xerocon and QBConnect. Attending a one on one version of that, is unattainable for 99% of accounting practices.

So, bring the cost per head down and the revenue up with a group approach.

Networking groups

You can host group forums on a monthly basis with your clients in similar industries. Some key things here:

  • Make sure you give them the style of event they’d like to attend. For example, if they going to the pub after work, then hold a pub style event
  • Make sure there’s an agenda and a speaker from their industry
  • Ensure there’s a follow up action point and something to take away
  • Lastly get some feedback on the event and share it all and iterate.

Customised group monthly reports/dashboards

Build a set of monthly reports or dashboards for just that industry or group of clients and ask them to allow for aggregated data amongst the group to be made available. This allows you to have averages to present to other clients and build reports.


“Help me, to help you” - Jerry Maguire

So, whether or not you realise it, your clients want more from you! They want your help as they are usually stuck in the day to day of their business.

Your job is to help your clients become an owner, not, a manager. Every business owner, every entrepreneur wants to be made obsolete.

So, I lay down the challenge:

  • Pick a client this week
  • Have a discussion around their grand plans
  • Send a follow up email, and
  • Then put together a proposal to tackle some low hanging fruit.

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