Accountants looking to expand and thrive need to diversify their menu of offerings.
That was the outcome of a panel discussion hosted by the SA Institute of Business Accountants (Saiba) entitled “How to survive and thrive as a small accounting practice” at the AccountEx event on Tuesday 13 October 2020.
Siphethuxolo Didiza BAP(SA), founder and CEO of Didiserv, a fully digitised accounting practice, says he learned the hard way that diversification was key to his success: “I taught myself how to create websites five years ago. I then started to offer ecommerce systems for clients so that this could be integrated for accounting purposes. If you are just sticking to the numbers, you are going to find it a challenge as an accountant. You need to diversify.”
Didiza’s social presence is so pervasive (see his company Didiserv), he told attendees that he had received three new enquiries while addressing the conference.
Diversification is key
It was a view echoed by Phumlani Majozi, another Saiba member and accountant in practice: “I agree that you need to diversify which means you must be flexible and adaptable. Look at how the world has changed this year (because of Covid). Over and above that, make sure your clients are satisfied so that you get more of their business, such as business plan drafting, company registrations and the like.
Discussion moderator Russel Ngobeni, who runs several businesses including a training company and an accounting practice, pointed out that he started in business after finding himself unemployed for a period of several months. This turned out to be a life-changing moment that set him on a path as an entrepreneur, and the lessons learned he was able to bring to his clients.
But with the Companies and Intellectual Property Commission (CIPC) making it easier for people to register and launch companies, Ngobeni asked whether this would eat into accountants’ traditional sources of revenue.
Didiza replied that such developments were inevitable – all the more reason to diversify your range of services.
Said Ziningi Mazibuko BAP(SA): “I had to start my business from scratch with no start-up funding, but I had some savings. Before starting my practice I was looking for a job, and I kept being asked why I was not in my own practice because I had the qualifications.”
It was the inspiration that started Mazibuko on her journey as an entrepreneur and accountant in practice. She realised that she didn’t need to be employed by someone else in order to survive as an accountant.
No more hourly rates for services
When it comes to charging fees for services, the panelists agreed that the hourly rate was fast becoming a thing of the past. Most agree that charging “package” fees rather than hourly rates was the best way forward.
Also discussed was how to prevent clients not paying for services delivered. This is best handled by taking clients through the menu of services to be delivered so their expectations are realistic, and they know what they are paying for.
“I never had the experience of a client not wanting to pay. We take them every step of the way, take your books, present financials and stay in touch with them continuously,” said Tsoanelo Mosikili BAP(SA).
Majozi empashised the need for ethics and transparency as accountants, particularly where clients are trying to circumvent the law and accounting policies. “You have to have a strategy around ethics. Your policies and procedures are key and must be understood across your own organisation, right through to the client. They need to be reviewed periodically to reflect what is happening in the world around us. As you onboard clients, this is a good opportunity to educate them on the ethics standards you must adhere to.”
Be prepared to fire troublesome clients
Ngobeni pointed out that he had lost clients as a result of ethical clashes – but he stood his ground and refused to bend to the wishes of clients trying to persuade him to break the law.
Nadine Chetty BAP(SA) said it is sometimes hard for accountants to fire clients, but she had done this in the past when having to deal with difficult clients. “The solution we settled on was to either increase their fees to (the level) they are demanding from you, or if they can’t, you need to fire them. It’s a call you have to make, whether you want to keep a client that is going to be bothering you. It’s a tricky decision because it can take time to get new clients to replace the one fired, but it is the better decision.”
The key trends identified to make a successful accounting practice:
- Use social media and other channels to market your services
- Diversify what services you offer (if you offer web design, you can then pick up additional accounting work, or business plan development)
- Get your practice digitalised and migrate your clients to the Cloud. Simplify the on=-boarding process for new clients. Stay in regular communication with clients through newsletter and social media.
- Price your services accurately for the services you deliver, and don’t be afraid to fire difficult (and costly) clients.
- Educate your clients in the services they will receive so their expectations are realistic.