august2022 - 31

FEATURE
If you can relate to what I just
described, I want you to know that
I believe there's a better way.
But first, let me acknowledge
that how you've been doing it is
not necessarily wrong, because I
don't think there is a right or wrong
way in this case. I might also suggest
that the reactive model has
served you well if you've grown a
nice business that supports a good
financial lifestyle.
But there are signs that clients
want a more comprehensive
approach-not only from their
accountants, but also from their
financial advisors and their doctors
and just about any other professional
they deal with. In addition,
staff are weary of the practice of
growing clients indiscriminately,
causing staff churn and ultimately
putting firms in jeopardy.
So, what's the " better way " I
mentioned above? The better way
is to evolve your practice from a
reactive to a proactive model of
working with clients.
For years, I struggled to understand
exactly what the industry
meant by saying that firms should
be moving to " higher level advisory
services. " I think because my
practice had been very reactive, I
struggled to understand how to
transition to an advisory practice.
I understood that I could create
offerings that were more advisory
in nature, but I was still somewhat
reacting to clients asking for advice
on those advisory offerings.
It wasn't until I was prompted
by a good friend a few years ago
to sign up for an executive health
program-a subscription concierge
doctor-that I realized the physician's
goal was to continually collect
as much data on me as possible so he
could proactively guide me to better
health (annual physicals, access to
data from my Apple Watch, etc.).
The relationship I developed with
my concierge doc was completely
different from anything I had previously
experienced in healthcare...
and I liked it.
And I realized that
this was
exactly what I should be doing with
my clients. But what I also realized
was that the key driver to proactive
health management was the availability
of health data. The big shift
needed was the development of a
data mindset: the active collection
and organization of all the client data
necessary for a comprehensive picture
of our client's financial health.
As professionals, we know
what financial health looks like for
our clients. If we have an ongoing
snapshot of where our clients are
in their financial health journey,
we can proactively counsel them on
next steps. Comprehensive financial
health is what our clients want from
us as professionals.
I categorize client data into
three categories:
* Financial data-Information that
exists in accounting systems you
can easily access for benchmarking,
analysis and advice.
* Technology data-Information that
informs you about the technology
tools your clients use so you can better
guide them to the right solutions.
* Business data-Data about your
clients that's not easily accessible, but
important just the same. It includes
data like ent ity type, buy/sell
agreements, loan interest rates, etc.
Business data is all around your firm...
but rarely is it easily accessible.
If you do the work of articulating
a picture of comprehensive financial
health for each of your client types,
and you have at your fingertips your
client's financial, technology and
business data, you'll be in a solid
position to be proactive in serving
your client. To be clear, proactive
client management means you
reach out to your clients with ideas
and solutions to make their financial
lives better.
Would your client be willing to
pay a premium for this type of relationship,
knowing that you're actively
thinking about them and not just
reacting to their questions? Could
you serve fewer clients if the clients
were being comprehensively served?
The approach I am describing is
called Smart Client Management.
Smart Client Management enables
accounting firms to curate their ideal
client roster, maximize recurring
revenue and obtain a sustainable
work environment. Executed correctly,
Smart Client Management
helps firms grow existing relationships
and build a year-round revenue
stream while developing a happier
team with more satisfied clients.
Smart Client Management needs
a data mindset to proactively make
clients' lives better. I think most
practitioners would agree with me
that the reactive model currently
used by most firms doesn't seem to
be working for anyone. And that's
why it's time to take advantage of
the better way that other firms are
finally employing. Not only for your
clients' financial health, but for the
career and life satisfaction of you
and your team...and for the future
of your firm. ■
Darren Root, CPA, CITP,
CGMA, is the Founder of
Rootworks and serves as Chief
Strategist for Right Networks.
Darren has over 30 years of
experience as a CPA and in
management within the profession.
He has vast accounting expertise
and a passion for helping firm owners
modernize and transform their practices
into thriving, sustainable enterprises.
Darren has earned numerous awards and
continues to contribute to the profession
with books, articles, podcasts and shows
that educate and inform the industry
in all areas of firm operations, industry
trends and business model.
AUGUST 2022 ■ www.CPAPracticeAdvisor.com
31
http://www.CPAPracticeAdvisor.com
august2022

Table of Contents for the Digital Edition of august2022
