More referrals

When you first start building your professional practice you will naturally gravitate to known acquaintances to spread the word that you are on the look-out for new clients.

Over time, this band of willing referrers will diminish – they will run-out of contacts of their own to refer. Which means you will need to  search further afield and seek referrals from your client base.

What is the major benefit of a referral?

The major benefit in a referral is that the person referring you has completed most of the sales process for you. The referred prospect comes to you with the expectation that you can do a good job.

This is a clear and obvious reason for making the most of this source of new clients.

Why do businesses seek out new advisers?

Ordinarily, we have to work hard to convince a business prospect to take up our services. They will need to feel that there is a perceived benefit in the move. Classically, most businesses seek out a new adviser for two reasons:

    • They feel they paying too much, and/or
    • They are not getting the help and support they need.

There are good arguments to rebut the first reason – they are paying too much – usually, when you drill down, its not the cost that is the problem, it’s that the value ascribed to professional work provided that does not match up to the cost.

What motivates clients and others to refer your practice?

If you read a book on Amazon, you can only write a testimonial/review based on your appreciation of that single publication. If it’s a good review, this will encourage others to buy.

In similar vein, if the only service you provide a client is say payroll management this is the only service they can objectively recommend. If you do a good job, they are likely to spread the word. But what about other services that you offer?

There are occasions when a friendly comment “you should go and see my accountant, she does a really good job on my payroll” will be enough to inspire the prospect to give you a call; even if the service that they require is unrelated to payroll.

But how much better would it be if your referring client knew that you could offer additional services?

Educate your clients, they are your most effective business ambassadors

One way to inform clients about your other services is to have systematic cross-sales campaigns. Advise them of the range of services you offer, even if they do not want the services themselves they will then be aware that you do provide that advice; and if approached by a friend with an issue that would benefit from that service, they can jump in with a targeted response “my accountant does that…”.

Take a look at the Landmark Fee Builder program

If you want to extend and expand the range and number of referrals for your practice, extend and expand the number of services you offer clients.

If you want a ready-made cross-sales solution, our Fee Builder program has a number of service options that you can consider for your practice, and associated marketing documentation to send to clients. Take a look> 

Improving prospect conversions

If you want a particular business or individual to be a client of your firm one way to achieve your goal is to give the prospect an experience of what it is like being a client of your practice.

Most practitioners simply add a prospect to their mailing list and send them a periodic newsletter update. Whilst this is one, low-cost strategy to keep in touch, you may need to invest more time if you want to speed-up your conversions.

Ranking your prospects

In much the same way that you could categorise clients: as A, B, C, D etc, it is worth considering the same process for prospects.

You could also select valued services, those that are not pure compliance activity, and tag prospects accordingly.

For example, if you supply a business fitness solution you could send prospects – that you feel could benefit from this sort of service – information about the service and how this might be of use to their business.

We would suggest that you rank your prospects on the basis of desirability: make your A category those that you most want to sign up, and those that you invest time in converting.

Prospecting is like fishing

The bait that will likely “hook” your prospect is if your presented service resonates in some way; if it solves a problem or helps to achieve a goal. Essentially, it will distinguish your practice from their present adviser, that is NOT offering the advice.

Take a look at the Landmark Fee Builder program

No need to scratch your head, conceiving services that you could promote to prospects. We have created a comprehensive range of services and the documentation and resources that enable cross-sales and wider, prospect conversion strategies.

Our Fee Builder program has a number of service options that you can consider for your practice, and associated marketing documentation to send to prospects. Take a look> 


Strengthening relationships with clients

It may seem obvious, but it’s worth remembering that a business may have an abstract legal identity, but I’ve never see a business laughing or drinking coffee.

Our relationship is always with people, the partners, sole traders, director/shareholders and individuals that may not drink coffee, but they do walk on two legs and speak our language, in the main…

Setting appropriate boundaries

To some extent, our relationship with clients is limited by a client’s willingness to communicate, and our psychology.

As advisers, it is beholden on us to make a client feel comfortable with both the content of the services we offer and the way in which those services are delivered.

I have met practitioners who never see their clients; all communication is by post, phone or email. This suits practitioners who are on the shy side. This may also be a client choice, the way they want to be managed.

Unfortunately, the human attributes that tend to reinforce the client/practice relationship do require a certain amount of engagement on the part of the practitioner. Top of the list in my opinion is “empathy”.

Why empathy is important

Accountants are trained to know. Our instinct is to be right. The language we use floats back and forth between Queen’s English and jargon.

If a client starts to open up about a problem there is a natural tendency to see the solution. This is what we do, solve problems. As soon as do see the solution we are closed to further insights that may be relevant.

What I suggest may be required is training ourselves to listen in the first place, then reflecting back what we have understood a problem to be, and then, only then, consider what we can offer to meet those client needs.

This may seem to be an unnecessary touchy-feely approach, but what it creates from across the table – from your client’s perspective – is that they have been listened to and understood. It will give clients confidence that they can be open with you and add an important layer to the glue that will lock in loyalty and help build a lasting relationship.

Take every opportunity to convince client you are on their side

One way to do this is to keep them informed.

As we have mentioned in previous posts on related topics, clients will appreciate you sending them information about services you offer that may further their goals and aspirations and solve their problems.

Better that than ignoring the situation until it becomes a problem, with no solution, and one that will cost the client; not only a monetary loss, but unwelcome stress and anxiety.

When was the last time you took a look at your client list and identified cross-sales opportunities based on new or existing services you offer?

This is a sure fire way to work at bonding with clients and improve the relationship. Avoid “I told you so” conclusions. Instead, work at predicting client opportunities and problems and offering solutions before they become acute.

Take a look at the Landmark Fee Builder program

No need to scratch your head. We have created a comprehensive range of documentation and resources that enable cross-sales and wider, prospect conversion strategies. Take a look> 


Distinguish your practice from the competition

If you go to a food market with a yen to eat mango and only one stall has mango, it’s a no-brainer where you will buy.

If ten stalls have mango you have a buying decision to make. You may shop at your personal favourite stall, the stall with the lowest price, the stall that has the best looking fruit or the stall recommended to you by a friend. From the stall holders’ perspective there are limited options to affect your buying decision.

In the opening remarks to this article, the sole provider of mangoes is likely to get your business.

This rather over-simplification illustrates why it is important to distinguish your practice from your local competitors.

Who are your competitors and what do they offer?

To consider these issues you need to know what your competitors are offering and compare this with your range of services. This is an exercise that can pay dividends and the easiest way to achieve insights is to visit your competitors’ websites.

Returning to the opening remarks of this post, every accountant offers accounts and tax return preparation, but what “mangoes” do you have in your service offerings that would distinguish you from your competitors, and are you promoting these services on your website? Or featuring them on social media?

Obviously, if a competitor is as rigorous as you are, and they are looking at your website from time to time, they will look to close this competitive edge. However, how many firms do you know who check out competitors in this way?

Promoting that you have “mangoes” on offer

There is no point in being coy; if you have unique services promote them.

For example, the fruit retailer could make a list of produce that only they – or very few – stalls offer. With this insight they could print a short flyer and drop this into every carrier bag. Or have a section of the stall that proclaims “You can only buy these here”.

This raises a key point: the low-hanging fruit (no pun intended), the persons (clients) you should be targeting with this information, are your existing clients. If you have something unique to offer then promote this to your clients first. It is easier to sell to individuals with whom you have an existing relationship.

Cross-sell to distinguish your practice

This is by far the most productive way to increase your fee income, impress clients with what it is you can achieve for them and distinguish your practice from the competition. But it is a process, you will need to actively promote services you cannot expect clients to know about these matters by osmosis.

The key is to constantly increase your service offerings

Everyone sells apples – accounts and tax return preparation – very few firms promote specialist services (business fitness programs for example). If you are keen to be seen as the firm to visit for support then you will need to set out your stall accordingly.

Like a few ideas to inspire you?

Take a look at Landmark’s Fee Builder program. Distinguishing you from your competitors is just one of the benefits of this service.

Why invest in an accountancy franchise?

Accountants meeting

The following post was provided by Bracey’s, a thriving firm who are building a franchise under the Bracey’s brand.

Firstly, let’s talk numbers, we are accountants after all. Over half of all UK franchises achieve turnover in excess of £250,000. 97% of the franchisees surveyed were profitable. So, we’ve got some solid foundations for success. If you’re ambitious, motivated and keen to run your own accountancy practice, this article will give you the inside scoop.

Primary reasons

You can be up and running quickly. It can take years to set up a successful business with setbacks along the way – you can short cut those – rather painful – lessons and set up with ease. Also, your earning potential isn’t limited by the usual costs and pitfalls associated with starting a firm from scratch. Oh, and a key thing to mention here, you’ve got the appetite, stamina and determination. Irrespective of cost savings, you need the right attitude to run a successful franchise.

Specific pre-launch benefits

Whilst we can’t speak about every accountancy franchise available, we know that at Bracey’s Accountants, you’ll receive

  • Support systems such as website, software, regulation-complaint procedures and manuals
  • Exclusive territory.
  • Branding, logos, merchandise.
  • Email address set up and working with support.
  • Fully optimised website driving leads to your inbox.
  • Xero Gold status immediately.
  • Training and support

On-going benefits

Yes, you’ll be set up for success, but we know that doesn’t mean the challenges are over. You are running your own firm after all. Having worked closely with our franchisees, we know what you need in place to continue to be successful. This includes:

  • Speaking with colleagues who have been through the start-up franchise process.
  • Access to marketing and PR advice from a proven and specialist external agency.
  • The experience and in-house team for pitching to large clients who would be inaccessible to an independent one-man band.
  • Ability to offer specialist services to your clients.
  • Support with meeting client deadlines when you’re busy.
  • Help to keep your business running in an emergency.
  • Constant review of all procedures to keep up with regulatory changes. You don’t have to worry about finding the solution, we do the research, design a system and test it for you.

If you’d like to know more about franchising at Bracey’s, visit or contact our Franchise Manager on 01462 413249

Building client loyalty

Answer this question:

Would your clients call you if they had received information from another accountant that you have not provided or that seems to be at variance with advice that you have provided?

Or would they send you a “Dear John” letter?

Client loyalty requires investment on your part

Most accountants believe that their clients owe them loyalty; after all, you offer the best advice. Why would they not be loyal?

This is a myth. Client loyalty is a consequence of a business relationship that works for the client. The building and maintenance of client loyalty is a process that requires action on the part of a practitioner. It is not sufficient, in my opinion, to simply do a good job and hope for the best.

How do you measure client loyalty?

Tricky. You could ask clients for feedback, are they happy with the service they receive? Unfortunately, most of us are drawn to extremes when asked theses sorts of questions, its either “everything is fine” or Pandora’s Box flips open and years of spleen is dumped in your lap. It could also be seen as you fishing for compliments.

The most objective way to measure loyalty is to witness what happens when the proverbial  hits the fan: either you make a mistake, or returning to the opening remark to this post, one of your competitors offers advice that had not occurred to you.

How do you maintain and strengthen client loyalty?

Certainly you can have heart to heart conversations with clients – as part of say an annual review – and that may help to clear up any lingering issues. You can also eye-ball clients and ask them to contact you if they have any problems with the service or advice they are receiving from your practice.

If you go down this route be sure to ask “open” questions that invite the client to be honest with you. Say “Do you have any issues regarding the services we have provided?” not “I assume you are happy with our work?”.

And most importantly: appoint someone to make periodic calls to the client to check out that all is well. A few “open” questions that help the client to clear the air will further the process.

Seek and you shall find…

Clients have two basic needs that advisers can help to satisfy: the fulfilment of their business and personal financial goals and sorting out problems. Some of these goals and issues you will be aware of, but what about those that you are not?

Seeking out these goals and problems should be a further key feature of your conversations with clients. 

If you do get involved in tracking down these goals and problems, and then provide services that keep clients on track, you will go a long, long way towards your goal of building client loyalty.

Are you keeping vital details under your hat?

Whilst clients will generally be aware of their own aspirations many will not be aware of all the services you offer, and therefore, the issues that you could help them with. The old adage: its what you don’t know that you don’t know that catches you out.

This is when you can step in, and the way to do this is to actively campaign to cross-sell relevant services to all your clients.

Do not stop the clock when you have succeeded in completing accounts and tax returns

The most important rhetorical question you can ask as a committed practitioner and adviser is “what other services can I offer that would support this client?”. Ironically, the cross-sales process is the most productive way to increase your practice fee income, and as a bonus, support the ongoing process of building client loyalty.

To see how Landmark can help you with this quest take a look at our Fee Builder Plus service.

Increase your practice fees

I think the days of relying on referrals may be numbered.

During my full-time periods in professional practice I too relied on a constant stream of new client introductions from existing clients. Certainly, in the early, heady days there were plentiful additions to recurring fees from this source. Unfortunately, as my practices matured, referrals started to reduce as loyal clients basically ran out of contacts to recommend.

In the current market place, competition now plays a much larger part in this process. The advent of increasingly complex, and competent, accounts and tax software has enabled less qualified persons to step into the compliance market. To some degree this has lowered the price of basic accounts and tax return preparation. This in turn has added downward pressure on the quantum of fees and profits earned by professional firms.

Should we increase our fees?

Hopefully, I am speaking to the converted on this question.

New business is the lifeblood of a thriving practice. Even if a practitioner is approaching retirement, fee-attrition is unfortunate as it will simply reduce the value of practice goodwill.

So, the answer is yes, in my opinion we should plan for growth in client acquisitions and rewire our practices to sell services that may have a recurring element, but that also offer those extra elements: to assist tax-payers in achieving their dreams and aspirations, and solving their problems.

We are more than problem solvers

Accountants are ideally placed to lift away the time consuming work of meeting compliance deadlines; historically, its what we do. The problem with relying on compliance work is now appreciated and more and more practitioners are successfully offering so-called “added value” services to clients that shift the emphasis away from “grudge” services (meeting HMRC and Companies House deadlines) and instead offer support services that are appreciated, valued and can justify a more realistic level of fees.

This shift from pure compliance to advisory work should be adopted by all practitioners. However, we are more than problem solvers, we are also partners in assisting clients to fulfil their business and personal financial dreams.

How do we increase our fees?

Certainly, we cannot rely solely on referrals to increase our fee income; but stepping outside of this passive approach, we will need to act: to adopt and maintain a structured marketing plan for our practices.

There are two basic threads to this planning exercise: to approach existing clients and sell them additional services and secondly, to win new client appointments. Each requires a distinct marketing approach.


The low hanging fruit is to approach your present client base with additional services. Do not fall into the trap that dismisses cross-selling as a waste of time, that clients are only interested in minimising the cost of your services. If this is how you feel, then you need to re-engineer your service offerings to embrace the “valued” service definition: services that not only solve problems, but that also assist clients meeting their goals.

Take a look at our Fee Builder program

We can help. I have created a Fee Builder program that can be adopted by practices of any size. It offers ideas and practical support to develop new services for your practice and a simple stepped process to achieve gains in cross selling to clients and improving new client acquisitions.

See what Fee Builder can offer your practice.

Who is in charge?

Whatever their rhetoric, its not politicians who determine success, its folks like us, the hard working business owners and their employees attending to future plans in spite of the changes thrown in their way by “the powers that be”.

And we are about to witness a change in our economic circumstances that even the most ardent Brexiteers will admit is likely to create a downturn.

More change is on the way

If we assume that a no-deal outcome is on the cards, what will the Treasury dream up to present as the UK’s next budget? And how will the timing of the presentation be affected by a possible election (if we have one)?

One thing is certain, accountants will need to respond to all these challenges, and quickly, if we are to support clients through the Brexit upheaval and consequent legislative changes. Our hard-won practice client base will be diminished if we do not.

How should Professionals adapt to these challenges?

At a minimum, we should improve our communication of relevant changes, those that will affect our clients, and adapt our services to meet the new demands.

Certainly, Landmark will be creating various support packs for firms in the coming months. These will target sections of your client base with relevant updates and ideas to minimise the pain.

Change and opportunity

Change can sometimes be a painful process in business, but for advisers, it always opens the door to opportunity; for the chance to offer new and more supportive services. Firms that rise to these opportunities will find themselves in demand.

How Landmark can help right now

Two ideas that you could consider:

Autumn Budget 2019

Have you considered a video presentation of the next Budget announcements for your website? This would provide you with an entertaining, visual means to communicate the key points instead of the usual dry copy. You could use social media prompts to drive traffic to your website. Places are limited as we guarantee to have your branded video produced for the day following the Chancellor’s presentation to parliament.

Here’s an example of the Autumn Budget video for last year:

Read more about the Budget Box service here

No-deal Brexit – client alert

This really is a no-brainer, you can use our copy out of the tin and have updates with your clients next week. There is no excuse for failing to advise clients on the risks and planning required to get prepared for the October deadline.

And the activity you stir up, aside from keeping clients informed, will generate fees.

Read more about our no-deal support pack here

New release for next week

Next week we will be releasing details of a support pack that you can use to advise your VAT registered, CIS contractors and sub-contractors with a call to action regarding the adoption of the Domestic Reverse Charge process for the construction industry on 1 October 2019.

This is a disaster waiting to happen not least because the detailed planning required is so complex.

Again, you will be able to use the client facing material out of the tin, and should stimulate the uptake of advisory services to adapt contractors accounting software and VAT admin changes (to sales invoices etc).

More on this service next week.

If you have ideas for other topics to cover that would be of value to your clients let us know. Email



How HMRC judges gross profit rates

I came across the following text published in HMRC’s Enquiry Manual , makes for interesting reading. You might like to advise your staff to read this post as it may focus their minds on variations in clients’ gross profit returns and how these might be interpreted by HMRC.

The full text is:

Examining Accounts: Business Ratios: Gross Profit Rate

Gross profit rate (GPR) is the most commonly used business ratio in HMRC.

The relevance of GPR in the distributive trades is obvious but its significance will vary according to the conditions of the trade. A newsagent will have very little influence on either the buying or selling price of the commodities handled but will know what rate of gross profit can be expected within the constraints of current price structures. Therefore the newsagent will have some idea of the volume of trade needed to make a living. In other trades the trader may have a target rate (or rates) in mind and will have pricing policies based on them. The interpretation of gross profit rates is relevant to any discussion of the profits of a buying and selling business.

More detail is available under these headings.

Use of GPR

Although the concept is simple, skill is needed in using GPR. The limitations and possible pitfalls need to be understood. Initially, an unexpected or abnormally low rate of gross profit may raise legitimate doubts but an attempt to re-compute the true profits of a business by using the ‘mean’ or most common rates achieved by other apparently similar businesses should only be done where there is no co-operation from the trader.

As explained at EM3508, to reconstruct sales you will need to

  • discover the mix of goods bought and sold by the business and any operations carried out on them
  • to apply appropriate ‘mark-ups’ to specific categories
  • to make any necessary allowances for wastage, sub-standard goods, pilferage etc.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Ultimately, the GPR should not be looked at in isolation.


When you are reviewing accounts for enquiry, you should think about possible comparisons.

  • How does the GPR compare with other businesses? The location of the business and any peculiarities of its trade should be borne in mind. However, if the business can realistically be compared with others, either nationally or locally, a lower than average GPR may be a risk indicator.
  • How does the gross profit rate compare with previous years? Is there a trend, and if so how does this compare with other changes in the business? A widely fluctuating GPR would give cause for concern if the trade is one in which the terms of trading do not vary greatly year by year. Similarly a substantial rise or fall in gross profit rate in any one year may be a risk indicator.

High GPR

You should not be blinkered and consider only low GPR. The GPR is only part of a bigger picture. Obviously that is a clear indication that margins are depressed for commercial or other reasons. However, you will be trying to obtain a picture of the business as a whole and understand how it works. What might an unusually high GPR indicate? Do other ratios and trends conform with high margins?

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Sensitivity of GPR

The sensitivity of GPR is greatest where the turnover is modest. Where it is large, say £200,000, the omission of £2,000 from sales will show a difference in the rate of gross profit of only 1% of sales. In such cases, it will usually be necessary to demonstrate and correct specific errors in the accounts or business records. However, the existence of a high turnover figure does not mean that GPR can be ignored. Gross discrepancies do come to light in some cases. Looked at from another point of view, the insensitivity of GPR in large cases means that a ‘good’ rate of gross profit should not deter you from opening enquiries if there are other risk indicators.

Use of Average GPR at tribunal

Average gross profit rates have very limited uses if the case goes to a tribunal hearing. Can the Tribunals Caseworker get details of other gross profit rates in as evidence and, if so what will those details prove? Firstly even an enquiry officer who has spent many years on enquiry work is most unlikely to be accepted by the tribunal as an expert on the trading patterns and operations of any particular type of business. Although he or she may be an expert investigator they do not become an expert on any particular type of business as it is most unlikely that enough examples of that particular type have passed through their hands to make him or her an expert. Their opinion on trade practices and likely results is therefore inadmissible as evidence.

The Tribunals Caseworker cannot simply try to put in a summary of gross profit rates showing what other businesses have achieved (and by inference casting doubts on the taxpayer’s results). There is the very real objection that this is probably a breach of confidentiality. Such information is hearsay evidence and it is unlikely to be directly relevant to the issues being considered by the tribunal. There may well be objection to its introduction.

Evidence about other businesses such as average profit rates or levels is not evidence about the taxpayer’s business. It can be a justification for selecting a case for enquiry. Equally, it may have assisted you in making a ‘best of judgement’ assessment, and it is quite in order to say so. What the tribunal needs is evidence to demonstrate that the taxpayer’s profits are inadequate.

Do you have farming clients?

A notification from has just popped into my Inbox and I think it’s worth sharing on this forum.

Farm payments if there’s a no-deal Brexit

The notice explains how payments under the present EU’s Common Agricultural Policy (CAP) would be affected in the event of a no-deal Brexit. You may want to share this update with your farming clients who benefit from EU grants.

Those businesses affected will effectively continue to receive payments after 31 October from the UK government under the terms of the UK government’s funding guarantee. This UK funding is only guaranteed until the end of 2020.

The notice continues:

Defra, and the devolved administrations, are preparing domestic legislation (under the Withdrawal Act) to ensure the UK has the ability in law to continue operation of payments in a ‘no-deal’ scenario. This legislation preserves the EU law as it currently stands, and ‘fixes’ the legislation so that it is operable after the UK leaves the EU.

The domestic legislation will require beneficiaries to conform to the same standards as they do currently, to receive payments. This will include on-site inspections to UK farms receiving payments, which will continue as normal.

All of these rules and processes will remain the same until Defra and the devolved administrations introduce new agriculture policies, either through the Agriculture Bill, or an Agriculture Bill in one or more of the devolved parliaments.

The government has pledged to continue to commit the same cash total in funds for farm support until the end of this parliament, expected in 2022. This includes all funding provided for farm support under both Pillar 1 and Pillar 2 of the current CAP. This commitment applies to the whole UK.

Hopefully, if we have a change in government before the end of 2020, they will honour this pledge. Interestingly, this comment is followed by:

This notice is meant for guidance only. You should consider whether you need separate professional advice before making specific preparations.

It is worth noting that the guarantee referred to in this article would seem to apply to other, non-farming, EU funding in place before we leave the EU.

What to do next?

Clearly, we should be seen to be active in keeping clients up-to-date on these issues. If you missed my email yesterday, you may want to consider sending out the update I wrote for your clients, and which is available for download at the foot of yesterdays post. There is a small charge of £30 plus VAT to access the client update, but I have included ideas to make best use of the material including social media copy. If you want to order, and there are no copyright restrictions, simply complete this order form.


Are you prepared to lose clients?

There are circumstances, usually beyond our control, that determine when a client ceases to be a client. The most obvious is an untimely visit by the grim reaper. This aside, the reasons for loss of business usually falls into two categories:

  1. Dissatisfaction with the service you provide or the price you charge, or
  2. Other issues.

In this post I’d like to consider the impact of one of these other issues.

Other issues for losing clients

How long is a piece of string? Retirement, sale of a business, moving out of area, insolvency, “had enough”, sickness, other family matters, and that old chestnut: deteriorating market conditions.

Regarding the last of these, are there any upcoming changes that might trigger a downturn in economic activity?

In passing, you may have noticed a lot of comment recently regarding the protracted debate about our exit from the EU. I will avoid the use of the “B” word as it’s now a bigger turn-off than “tax” and I would like you to finish reading this copy…

Contenders for the leadership of the Conservative Party are both, seemingly, committed to the possibility of a no-deal outcome come 31 October, how might that impact your clients’ businesses? And whilst you may consider that talking down economic prospects is either politically or practically inadvisable, what if – regardless of our personal opinion – we really are on the verge of a dislocation (a slow-down) in economic activity?

Optimists will say any slow-down will be temporary and the upside, when it arrives, will more than compensate for any post-exit blues. Pessimists will lean towards an increasingly depressed and extended period of recession with no apparent light at the end of the tunnel, and certainly not in our lifetimes.

Are you prepared to lose clients?

When did you last survey your clients to see who has active trading links with the EU and has concerns about our withdrawal from the EU? More importantly, wouldn’t it be prudent to draw up a list of these clients and contact them to offer a business health check?

As far as I can see, this is a win-win outcome. Attending to structural weakness now (cash flow, solvency, profitability planning, risk assessments) has no downside. Left unattended, any downturn will tempt insolvency and loss of income, whereas assessing risk and strengthening the Balance Sheet, will not only assist clients to have a better chance of surviving bad-times, if the good-times roll they will be first out of the starting blocks. First come is best served.

I can help

I have added two resources to the Landmark site in recent months. They are:

  1. Brexit information packs (assuming a no-deal outcome), videos and risk assessment tool for your website: see here, and
  2. Fee Builder, includes promotional material for business and personal financial health checks: see here.

I suspect that those of us who are content to ride out this issue – it will just be a minor blip – will temp not only fate, but also the longevity of their active client list.

Nothing like a good blurt

As many of you will be aware I edit the news copy for Informanagement. As part of this brief I also contribute blog articles. Last week I wrote about the amount of advice we professionals tend to give-away. The post is reproduced below.

How much advice do you give away?

There is a difference between flagging up an issue that could be a problem and offering a solution.

Most professionals sell solutions and so offering advice without agreeing that you be paid for giving that advice seems to be counter intuitive, and yet most professionals seem to do this.

Why is that?

Would you willingly sanction a loss of earnings for your practice?

Perhaps advisers just surrender to age old desires to be liked or respected? It is likely that during a thirty year career, accountants let slip valuable advice, let’s say twice a week, forty-eight weeks a year. If we estimate the value of each slip at say £75, this would amount to a thirty year loss of income amounting to £216,000. If we factor in the possibility that staff are prone to the same largess, the lost revenue quickly becomes a sizeable retirement pot.

Take a step back

The key to closing this drain on fee income is partly to acknowledge that it happens and secondly to rethink exchanges with clients or prospects. There will always be a temptation to demonstrate that you are smarter than your competition and this is a sound way to impress prospects and retain your clients. So, if you are going to avoid blurting out the solution to problems in order to stand out from the crowd, how can you do this without giving advice away for free?

Give yourself time to consider

A possible strategy, apart from biting your tongue, may be convert the blurt into an acknowledgement that you may possibly have the answer required, but you need to check out a couple of issues, and you will get back to them the next day. When you subsequently respond, you could say that you can fix the presented problem, but you will need to invest “x” hours to do so and your fee would be £xx. Follow up quickly with a cost/benefit statement that will convince them your fee is worth paying.

The place to start is to consider how much advice you give away. By all means keep your clients informed, this is a brilliant way to stimulate interest in your services, but don’t be tempted to blurt out the solutions.

Food for thought.

And, if you are considering an alternative supplier for your practice news feed to clients or staff, take a look at Informanagement’s offerings on their website. Or contact Laurence Vogel,


Cash flow and insolvency

Life raft against blue sky

Last week I wrote a short blog post that was distributed to Landmark’s Online Copy subscribers; this service provides two draft blog/newsletter articles a week. The topic was insolvency and how small businesses can still find themselves technically insolvent if cash flow unexpectedly dries up, even if on paper their net asset position is positive.

The article is reproduced below. Feel free to use this. I recommend that you edit the copy slightly if you post to your website as this will avoid search engines treating the text as generic.

What exactly is insolvency?

The dictionary definition of insolvency is less than illuminating, it is:

The state of being insolvent…

Listed synonyms provide more detail:

bankruptcy · liquidation · failure · collapse · ruin · financial ruin · ruination · pennilessness · penury · impecuniousness · beggary · administration · receivership · folding · pauperdom

What these explanations do not provide is a definition of the state of insolvency. A simple definition could be the insolvency occurs when we are unable to meet our obligation to settle debts by the required due date.

In a business sense, a firm can be said to be insolvent its assets are less than its liabilities, but even this definition does not quite hit the spot.

Imagine that you use all your available cash reserves to purchase stock. To place this in a current context, you might consider this as a strategy to avoid supply line issues in the event of a no-deal Brexit.

You have no issue with doing this as you are owed a significant sum by your major customer that will restore your cash flow before bills and salaries are due at the end of the month.

But what happens if your customer is suffering cash flow issues and is unable to pay?

On paper, your business will be solvent. As long as your delayed payment from your customer does not become more serious, in time your cash flow will be restored, but how will you pay your bills at the end of the month?

Without private funds that you can introduce to see you through this impasse or the support of your bank, how will your staff and other creditors respond if you have to go cap in hand and explain there will be a delay in paying them?

Cash, liquidity, really is king, and lack of cash can actually place your business in the same position as an insolvent firm.

If you are concerned that you may be skating close to a cash flow crisis or a deeper insolvency, please call so that we can help you figure out your available options. For certain,  pretending that all will work out well in the end may not be the best strategy to apply.

Take a look at our Online Copy Service

If you would like to access more written material for your newsletters or website, take a look at the Landmark Online Copy service.


Who do you turn to?

In practice, we all have occasions when we need the support of other professionals to deal with a difficult client issue. We collect these support contacts and they provide a necessary backup when our own skill sets are challenged.

Would you be willing to share these contacts?

In an attempt to provide Landmark’s users with a fairly comprehensive directory of these contacts, I have created a Support Directory on the Landmark site.

Would you be willing to share your expert contacts and I will approach them to see if they would like to take a slot?

No-one is an island

We all need help from time to time, and for me personally, this was especially evident during my two extended periods as a sole practitioner.

Do you specialise?

Have you developed skills in specialist areas and would you be interested in helping other practitioners who need assistance in these areas? If yes, then perhaps we should discuss adding your firm to the support directory. Give me a call, or take a look at the Support Directory information page

Always expect the unexpected

What are the challenges to our fee income 2019-20 and beyond?

Grudge purchases

For most business owners it is hard to place a value on costs that merely keep Her Majesty’s government off their backs: filing annual accounts and tax returns. This annual compliance chore is often completed well after the accounts period end date  and is a fait accompli.

Fait accompli is an interesting phrase. It is defined as “a thing accomplished and presumably (presumed) irreversible”. In other words, any advice we as advisers give – on these historic numbers – will be received as a “I told you so” remark. What clients need is something relevant what they are doing now.

As far as we can ascertain there are no upsides to after-date compliance work other than meeting filing deadlines and tax payment deadlines.

What percentage of your fee income is pure compliance?

This is an interesting question.

Most practices, especially smaller practices, will likely have a significant proportion of their fee income generated from the supply of pure compliance services.

If so, and if you accept that clients, by and large, see your fees as a grudge purchase, then it makes sense to take a fresh look at the services you offer and consider how to transform fees into services that have perceived value.

What are valued purchases?

The phrase “value added” has been bandied about in our profession for many years. It was sold by practice development pundits in the 1990’s and beyond as a way to increase fees by repackaging compliance work and representing to clients – for vastly increased fees – as “Business Builder” or specialist tax-mitigation services.

For the average, smaller business owner, being exhorted to buy tax planning or business development services is rather like selling leather seat options to a car owner that just wants a seat cover to hide the mess his kids have made – and will continue to make.

What is actually required is a strategy to transform ALL the services we offer, and that we are paid for, as offering the client value, and importantly, value that seem relevant and appropriate to their circumstances.

The way forward?

If you want to engage in this process, to transform grudge into valued, take a look at the ideas I have shared in my Fee Builder workbook and associated features. In my opinion if you stick with the “grudge” services, you will likely continue to leach fees to less qualified practitioners, and to accounting package software developers, who will soon be adding an annual accounts and tax return facility to their offerings.

The door is steadily closing on markets that we have traditionally considered to be our sole domain, and there is no future in relying on the past for inspiration.

Read more on this topic:

Add new income streams to your practice