What gets measured gets managed

So you want your firm to be more successful in business advisory.

I will believe you only when you tell me that you have changed some of your KPIs. And then you confirm that you have thought through how you recognise and reward performance in business advisory. What gets measured gets managed - originally from Lord Kelvin in the 1800s - is just as true today in accounting firms.

Let me be blunt. Business advisory work is by its nature very different to tax compliance work and is also different to tax or risk or audit advisory work. If you don't understand how business advisory is different then contact me and I'll explain but in a nutshell....

Business advisory work is helping your clients tackle some of the biggest issues that they face in business. Business advisory work is about delivering client value way in excess of the fees that you charge. And because of this you are probably not going to be billing on time and materials. Which in turn throws a pretty big spanner in some of the traditional KPIs that accounting firms use.

Surely this is not a surprise. The accounting profession is undergoing change. Rapid change. Some of the traditional manual processes executed by accountants are already being done by, or replaced by, clever new software. And in 2020 the percentage of traditional manual processes being automated will experience a step change in many firms.

So why would an accounting firm cling on to old school measures and rewards? Especially if the leadership of the firm are suggesting that business advisory services will be a major area of growth for the firm.

The new KPI for accounting firms? Client value as measured and perceived by your client.

Think about this. If you added that new KPI in your firm how would behaviours change? What would your people start doing or stop doing? What additional revenue and client loyalty would be generated?

Time. Efficiency. Utilisation. Billable hours. How relevant are these when over 50% of the work is done inside a microprocessor chip? And yes in 2020 over 50% of traditional accounting manual processes will be done by software not accountants. And the microprocessors are around 200 times faster than humans and more accurate.

I strongly believe that the future is bright for accounting firms. Provided some sacred cows are allowed to move on to new pastures and some new thinking takes place about what a modern accounting practice looks like in 2020.

I would love to continue this conversation with you...