Understanding Your Clients' Needs

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Understanding Your Clients' Needs – Becoming More Than Just an Accountant

Presented by Harvey A. Goldstein, CPA President, Up Your Cash Flow Software

Contact [email protected]

Tuesday, October 9, 2001

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Previous Workshop Transcripts


There are basically three goals clients have – as do most people – when they go to their place of business each day: money, enjoyment, and security. There are also accompanying strategies that make it possible to achieve these goals. In understanding both goals and strategies, an accountant will find him/herself better able to serve clients by understanding their needs and working with them in a consultative capacity. These practices can effectively change the accountants' status from traditional accountants to trusted advisors, putting them in a position to take a more active role in their clients' internal management and decision-making processes, helping to plan for the future rather than merely crunching numbers.

You can read the complete transcript of this workshop.

Items discussed in this workshop include:

  • Knowing What Clients Want
  • Goals That Help You Get There
  • Strategies to Achieving Those Goals
  • Marketing Plan
  • Personnel Plan
  • Operational Plan
  • Financial Plan
  • Understanding The Strategies
  • Helping You Help Your Clients
  • The Accountant as Trusted Advisor

October 9, 2001 workshop sponsored by Plus & Minus Software

Workshop Trnascript

Session Moderator: Welcome everyone and thank you for taking the time to join us today! I'm Gail Perry, the managing editor for AccountingWEB, and I'm pleased to introduce Harvey Goldstein who will present a workshop on understanding your clients' needs - becoming more than just an accountant.

Harvey Goldstein is a CPA and Managing Partner of Singer Lewak Greenbaum & Goldstein LLP, the largest independent accounting firm in California and the 59th largest CPA and Management Consulting firm in the country, according to recent rankings published by Accounting Today.

In addition to serving on a number of state and national small business advisory boards, Harvey has been a practicing accountant/consultant for over 35 years. He is the author of "Up Your Cash Flow," a book that illustrates how to take better control of your business through the use of specific goals and proven strategies.

Harvey has also developed a cash flow and profit planning software program called Up Your Cash Flow that has helped thousands of accountants expand their practices beyond traditional services. This program is available at a discount to AccountingWEB members. You can find out more about the program at www.upyourcashflow.com, and information about the AccountingWEB discount is available at https://www.accountingweb.com/item/59917.

I'd also like to take a moment to thank Plus and Minus Software for sponsoring this session on Understanding Your Clients' Needs - Becoming More Than Just an Accountant.

Welcome Harvey - we're so glad you can join us today!

Harvey Goldstein: Thank you! I'd like to thank everyone online who has joined us this afternoon - I'm very pleased to be here on AccountingWEB for my very first workshop. I'd also like to mention at the outset that I'd like to keep this workshop flexible. If you have any questions or comments along the way, feel free to chime in.

Today I will be presenting an array of ideas, goals and strategies aimed at the professional accountant. These ideas are meant to be thought-starters; concepts to get you thinking in directions you may not have considered before.

I'll be addressing the three goals every business strives to achieve to meet the wants and needs of all associated with the business. I'll be looking at the four key strategies that a successful business must follow to ensure these first three goals are met.

And I'll be touching on why it's important to understand these concepts as it relates to our careers as professional accountants and consultants.

As a CPA and managing partner of a 180-person firm, I speak and think from the perspective of an accountant. And as an accountant, there are a few things I hope you take with you when you come away from this workshop.

  1. I hope you'll have a better understanding of the importance of staying competitive.
  2. I hope you'll be better prepared for the challenges that face us as accountants.
  3. I hope you'll better understand the need to think strategically. At the risk of sounding preachy, these are different times we live and work in today. We have to change the way we think and do business, or face the very real possibility of being phased out by the others who are changing with the times.

It should come as no surprise to anyone that the world of business has changed; the economic roller coaster the Internet has taken us on, the unexpected tragedies in New York and D.C. and a host of other variables too numerous to mention have all had a cumulative effect on our overall economy.

With the changes in the world of business, also come changes in the world of the accountant. Our clients want more from us than they're used to getting - and more than we've been used to giving.

They need considerably more than traditional accounting services (financial statements and tax returns) to help them stay healthy and profitable. They need a broader scope of services. They need forward-looking information.

They need it quickly. They need it consistently. And there is no one in a better position to help them than their accountant. More on that later.

Harvey Goldstein: Right now, I'd like to ask a question: Why do you think people go to work each day? (I ask because I've found that knowing why people go to work is the first step to understanding how we can help them). Anyone?
Patti Keener: MONEY
Lauri Whitescarver: money
David Ross: To make a living, support ourselves and our families, to make a contribution to others.
Harvey Goldstein: Obviously money is often mentioned are there others?
Doloris Vest: personal growth and satisfaction
Harvey Goldstein: Very good Doloris. The second is enjoyment. People want to enjoy what they do; they like to be proud of their efforts. If you spend 8, 10, 12 hours a day or more at one place, it's certainly a plus if you like being there.
Lauri Whitescarver: To Make A Difference
Harvey Goldstein: To make a difference would fall under enjoyment.

Harvey Goldstein: The second is enjoyment. People want to enjoy what they do; they like to be proud of their efforts. If you spend 8, 10, 12 hours a day or more at one place, it's certainly a plus if you like being there.

The third reason is security. People like to know - especially as they get older - that their future is financially secure.

Money, enjoyment and security -- that's why we go to work. That's why we do the kinds of things we do in our everyday enterprise.

Now, if money, enjoyment and security are the top three priorities of everyone associated with a business, then that business really ought to make sure their activities are aimed at providing these things.

Let me digress for one moment and offer the classic definition of business: it's "an economic unit formed to provide goods and/or services to customers with the intention of making a profit." We now need to add, "and satisfying the personal needs of the owners and employees." If a business does not satisfy those needs, it has no basis for existence.

Taking the next step in that logic, we need to establish goals for the business that are in concert with our three priorities - money, enjoyment and security. Here they are:

  • Goal #1: The business must provide sufficient income to enhance the standard of living of all who are associated with the business. (money)
  • Goal #2: The business must provide the highest quality product and/or service commensurate with the market place. (pride/enjoyment)
  • Goal #3: The business must be built to last forever. (security)

Harvey Goldstein: Providing sufficient income to enhance the standard of living of all who are associated with the business certainly will be necessary in order to satisfy the desire for money.

Most people get enjoyment and satisfaction from a job well done, knowing their business is providing high quality products and/or services to customers.

And finally, if you're looking for security from your business, the best way to achieve that is to build a business that will last forever.

These goals are what your clients are trying to achieve without even knowing it.

And more than likely you are too. Aren't we all?

Harvey Goldstein: Now that we have established the primary goals of a business, we must now look at the strategies to achieve these goals. Again, it's necessary to understand them to be able to better serve our clients and help them achieve greater success:

  • Strategy #1: A written Marketing Plan - Every business must have a written marketing plan in order to secure customers and grow the business. It must be written.
  • Strategy #2: Personnel - Every business must have strategies with regard to personnel. If you want to build a business that will last forever, good people will make the difference.
  • Strategy #3: Operational Plan - A business must be efficient and effective in the manner in which it produces its product and/or service.
  • Strategy #4: An annual Financial Plan - If you want to make a profit, plan for it.

Strategy #1 - Written Marketing Plan.

Harvey Goldstein: Every business must have a written marketing plan. That plan must define what the market is, what the business is and does, and its ability to communicate to the marketplace.

To get opportunity to knock, a business needs to tell opportunity where the door is. Why does it need to be written? Because if it isn't in writing, it isn't a plan.

In developing a written marketing plan, we need to understand the marketing process. Let's look at the process as a continuum. On one side, we have marketing -- at the other, we have sales.

The goal of marketing is to get the prospect to the seller.

When any business enters into a marketing activity, that effort must be judged on how many leads it generates and how many opportunities are created -- not on how many sales have been made. What happens if we judge our marketing efforts based solely on sales?

One possible scenario: we find ourselves with a very successful marketing program that gets blamed unfairly for the poor showing of a weak sales staff. We must make sure we're very clear on which side of the continuum (marketing or sales) the weakness lies, before we consider action.

Another one of the important steps in the marketing process is to understand what the business is all about and how it's perceived in the marketplace. Remember, you can't market what you don't know.

The first thing you may want to suggest to a client is that they survey their customers to find out what the business's strengths and weaknesses are and what its customers think of the business. This is valuable information for any business owner to have.

As an accountant, it's also important information for you to understand if you are going to be able to offer marketing assistance and counseling to clients as part of your value-added services.

What talents does the business have? What are they capable of doing? Many clients have no idea what hidden talents lie among their staff. Survey the staff and the people within the organization to find what hidden talents might be there.

Feel free to offer suggestions as to how those might be translated into creative marketing efforts.

Find out as much as you possibly can about the business. Remember, you can't market, or offer help in marketing what you don't know.

The next step in the process is to determine what the market is. We must learn as much as we can about the market. We know our clients don't have unlimited resources for marketing. If they did, they certainly wouldn't need us for advice.

It's easy to throw a million dollars in the air and see what sticks. What you can do - and should be doing - is helping your client maximize their marketing potential by suggesting they aim for the narrowest segment of the marketplace as possible. This gives them the biggest bang for their buck.

Learn as much as you can about the business. Find out prices, locations, sizes. Do a little digging into specializations that may be required for your client's success in the future.

Familiarize yourself with the impact that technology may have on the business. Any forward-thinking marketing ideas you bring to the table will ultimately increase your net worth and value as an advisor. Just remember, the market must be kept narrow so that the business can get the most for its dollar.

Finally, after we find out what the business is all about and who they're going to market to, the next step is to communicate to the market. It's time to tell opportunity where the door is. How do we do this?

We use the media, the Internet, newsletters, brochures, presentations, advertising, networking and telemarketing. All these are methods that can be utilized to great potential - and can elevate your status as an advisor.

Strategy #2 - Personnel.

Harvey Goldstein: A business needs to hire the best people available. Talented people must be continually trained to make them better at what they do. One of the mantras I live by - when it comes to personnel - is this: push responsibility to its lowest level whenever possible and reward excellence wherever possible.

Even the lowest person on the company ladder will rise to the occasion when given responsibility and a chance to show their stuff. When they do meet the challenge, make sure they're rewarded for their efforts. Good people will make the difference in a business.

No business can be built to last forever without the appropriate people within the organization.

Strategy #3 - An Operational Plan.

Harvey Goldstein: Because of the competitive environment that we operate in today, a business must be efficient, effective and reduce costs to whatever level it can so that it can continue to make a profit.

Does anyone remember the old pricing practice that we used years ago? Am I the only old-schooler who remembers, Cost plus profit equals sales price?"

There was a time when you could simply take the cost of a product, add the amount of profit you desired, and come up with the sales price. Unfortunately, this really doesn't exist anymore and the equation is a little different.

Today we start with a more or less fixed sales price, subtract our anticipated profit, and we get our targeted cost.

What does this mean? This means that everybody in business today must try to become as efficient and effective at providing their product or service so that they can become the low cost provider.

Why is this happening? Today's business has little or no control over the sales price of a product. Competitors are often dictating how much you can charge for any given product or service.

The competition is always ready to reduce their profit margin. Raw materials are steadily increasing in price. And sadly, businesses are generally slow to react to economic changes.

What can be done about this? A good accountant will know that in any business - much like his/her own practice - providing additional services will effectively reduce the "commodity" aspect of pricing.

Harvey Goldstein: Any thoughts?
Tom Boozan: What exactly do you mean by "commodity aspect" of pricing?
Harvey Goldstein: The basic component of a commodity is its price. i.e.: a tax return, a reviewed financial statement are commodities and price is all that matters to the buyer.
Tom Boozan: got it.

Harvey Goldstein: Add tax planning, business planning and the price becomes secondary to the client. The results become the most important aspect.

To continue. A business also needs to do more planning up front so they can become more efficient and effective in the manufacture of goods or delivery of services. It must review all production areas to become efficient. It must investigate new areas of technology and where appropriate, continually monitor original proposals with final costs.

A business must continuously strive to be the low cost provider of goods and services, so that they can remain profitable.

Strategy #4 - An Annual Financial Plan.

Harvey Goldstein: Do any of you do business financial planning?

Let me rephrase the question. Are any of you helping your clients for the next 12 months versus giving them the last 12 months?
Tom Boozan: not so far, but I'm considering it...

Harvey Goldstein: Don't you think it's time that we accountants start giving our clients a glimpse of the future rather than the past? The past is over they can not manage the past. The only thing they can manage is the future. Accountants must become advisors on the future.

Back to financial plans. If you want to make a profit, plan for it. The annual financial plan consists of the following items:

A business must have monthly financial information readily available - and understandable - so that it can be clearly seen what exactly is taking place financially within the organization.

There must be a twelve-month profit and cash flow plan. You must be able to see and anticipate what your profits and your cash balances are going to be over the next twelve months.

It just so happens I know a fabulous tool that can get that job done quickly and easily - without spreadsheets. It's a cash flow planning software program called Up Your Cash Flow. I'm a bit partial, but there really isn't anything on the planet that can touch it. www.upyourcashflow.com.

A business must know at all times how much cash they'll need and when they'll need it.

There must exist an effective accounts receivable management program. This is often the largest single asset in the financial statement and more often, the most poorly managed.

There also needs to be effective inventory management. Tying up cash in non-sellable inventory is something that should be monitored - and avoided.

Above all, a business must have financial information that tells a story. Let's take the typical financial statement. Pretty boring, isn't it? Oh, sure, the numbers are all in nice, neat rows and columns - and that's great, if you're designing wallpaper.

But really, isn't it just a long list of numbers sitting there, not saying a word about what they mean and how you could be using them to run your business?

Income. Expenses. Yep, they're all there. But not a clue as to what you're doing right and what is going wrong. Numbers are a stagnant list. It's sad to report, but from my experience, most business owners will go right to bottom line, never looking right, never left, never even above - just that all-important bottom line.

More often than not, financial information that a business owner gets doesn't say much about anything.

And they're usually late to boot.

Now, what if you were to prepare a detailed financial plan, then compare that plan to what actually happened with the business? My guess is things are going to suddenly start getting clearer.

Your client is going to begin noticing that his/her formerly worthless list of numbers will suddenly begin speaking volumes on how to better operate the business. The differences in those two static reports are what tell the story!

They must be analyzed - and reviewed on a regular basis - so that the financial health of the business can be continuously evaluated.

Monitor the forecasted financial plan against the actual numbers. If you find that facts change, change the plan! The primary purpose of a financial plan is to let you know where the business is going, not where it's been.

You already KNOW where it's been! Forward-thinking accountants need to be much more focused on the future, not the past.

In order to remain profitable, most businesses must maintain a cash management plan. Management should always have an answer (in advance) for these three questions:

#1 - How much cash will I need?
#2 - When will I need it?
#3 - Where will I get it?

Harvey Goldstein: It's a good idea for you to be aware of the answers to these questions as well. You'll be able to help your client see the future before it happens, then help with financial decisions regarding the best course of action. That can only make you more valuable.

OK, let's go over the primary elements of a solid financial plan:

A profit and loss plan, which shows the anticipated operations over the next twelve months or longer.

A cash flow plan, which converts profit and loss into cash flow and answers the basic questions of how much cash a business will need and when it'll be needed

Annual forecast balance sheets, which are to be used to determine the reasonableness of your profit and cash flow plan.

If there's an overall benefit to planning, it's this: planning means more money and less stress. It's that simple. The purpose of the financial plan is to help a business owner make money. And when your client's business is making money, you'll both be happy campers.

How does a business get a financial plan started - and more importantly, how can an accountant help?

Use history. After all, it did happen. Use it as a template. Go back a few months and use historical data to develop an initial plan. OK, so it's not perfect - but no plan IS! After several months of comparing the initial plan against actual data, you can see patterns begin to develop.

Take a look at expenses, especially those that are out of line. Question how they came about. Examine the different elements that make up the expenditures and see if you can suggest ways to bring each forecasted expense in line with the actual data. Estimated time to do this: about an hour each month. Remember, to achieve success, plan for it.

In summary: we want money, enjoyment and security.

The business must provide income, high quality products and services, and be built to last forever.

To accomplish this we need to have a written marketing plan, personnel strategies operational plan, and a financial plan.

Who best to provide these services than the accountant?

Harvey Goldstein: I'd like to wind things up today with a thought regarding the changing role of the accountant.

Gone are the days when number-crunching was enough to get by. Today's clients are fighting for their economic lives out there and they need all the help they can get. This is a golden opportunity for the accountant to expand beyond traditional services, and into the realm of consultant - even trusted advisor.

As I mentioned at the beginning of this workshop, there is no one in a better position to help clients plan for the future than their accountants.

A trusted accountant can be the #1 most important ally to a business owner. A client who is constantly frazzled by the day-to-day activities of a business (and I've seen my share) would like nothing more than to be able to lean on someone in times of crisis.

Someone who knows the financial score and understands the stress they're dealing with. Someone who has answers. Someone like you.

Clients do not know everything (even though a lot of them think they do). Often, some of the most obvious ways of making a business run more smoothly and efficiently are overlooked by the harried business owner.

The accountant/consultant should be able to step in show exactly where changes can be made to increase profitability and improve cash flow.

Taking a more active part in managing the future of a business is where the future of accounting lies. If we step up to the challenge and really get involved in steering our clients in the right direction, we'll all find ourselves in a profession that's built to last forever.
David Ross: Amen to that Harvey.

Session Moderator: Thank you Harvey for such an informative workshop! We really appreciate your taking the time to be here today. And thank you all for joining us - we hope you enjoyed the presentation.

Session Moderator: Once again, I'd like to mention that Harvey has developed a cash flow and profit planning software program called Up Your Cash Flow that has helped thousands of accountants expand their practices beyond traditional services. This program is available at a discount to AccountingWEB members. Information about the AccountingWEB discount is available at https://www.accountingweb.com/item/59917.

Session Moderator: And thank you again to our sponsor, Plus and Minus Software.

Harvey Goldstein: It was my pleasure. If anyone would like to contact me please call at 310-477-3924.
Harvey Goldstein: Thanks again to Accountingweb for having me and thank you all for attending.
Tom Boozan: thanks, Harvey -- that was very interesting
Lauri Whitescarver: Very Informative Insights
Session Moderator: Thanks again, Harvey - great job!!!


Harvey A. Goldstein, CPA:

  • Managing partner of the CPA and Management Consulting firm of Singer, Lewak, Greenbaum and Goldstein which has offices in Los Angeles, Orange County and Inland Empire, CA
  • Appointed by former President Ronald Reagan to serve on the National Productivity Advisory Committee
  • Appointed by former California Governor George Deukmejian to serve on California's Small Business Development Board
  • Commissioner to the White House Conference on Small Business
  • Appointed Delegate to the White House Conference on Small Business, 1986, 1995
  • Named Accountant Advocate of the Year by the U.S. Business Administration
  • Past Chairman of the Republican National Committee Small Business Council
  • Member of National Advisory Council to the SBA
  • Author of the "Small Business Investment Incentive Act" introduced to Congress, designed to greatly benefit the small business community. Received media coverage in The Wall Street Journal, Forbes Magazine, The Washington Post and the Los Angeles Times, among others.
  • Member of the American Institute of Certified Public Accountants and the California Society of Certified Public Accountants
  • Past president of the International Group of Accounting Firms.

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