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Establish clear rules of engagement

Posted 5 years ago in Advisors by Ian Vacin
Posted by Ian Vacin

In the 4th of 5 steps of our Moving your practice to the Cloud series we enter the second phase – Expand. In the most recent post, we talked about who and how to move your first 2-3 clients to the cloud. Now we move to getting the ability to handle clients at scale and to being able to “Establish clear rules of engagement with clients”.

Cloud accounting products, like Xero, let you leverage the power of mobility, collaboration and aggregation. Wherever you are in the world and whatever the time you can see all your clients in one place, work simultaneously with them, in their financial world, and collaborate closely to foster a stronger relationship. This reinforces why you are their trusted advisor. Therefore, you are able to scale up more quickly than traditional methods. However, you will need new processes to expand your firm’s client footprint successfully, which involve placing more of the financial responsibilities on the client. This ultimately frees up time to either provide more consultative services or to find and take on more additional clients.

Contract for cloud accounting

Make a contract

While you may do this already, putting together a contract agreed to by both parties solidifies the relationship and inherently and subconsciously establishes ownership on the key collaborative elements of the financial management process. The contract needs to be clear on who owns what, with the responsibilities and obligations for each party. It lets the small business owner understand what they need to do and informs the small business about what they should expect you, the accounting professional, to deliver.

Onboard effectively

Now that the small business knows what is expected, as their trusted advisor your job is to help them gain the confidence to do these activities correctly and consistently on their own. Time after time, I speak to accounting professionals who find that spending just 30 or so minutes onboarding their clients pays huge dividends later. For a small business owner, their passion, their focus and their skills are in terms of what they sell and what the small business does. Their financials can be unfamiliar territory and they need help and guidance on what to do, why to do it, and how to do it. You need to teach the clients “how to fish for themselves”. By showing the products you collaboratively will use, the processes that they will be involved in and the exact tasks that they will do (e.g. complete a bank reconciliation with them), your small business clients will gain the confidence to do those activities themselves accurately – eliminating those hard-to-find data entry errors from occurring.

Be there for the client

After the onboarding is complete the key is to provide continual support and advice. This should be included in your pricing (or package) to your clients. You are doing it already (don’t they just pick up the phone when they need help as it is? Do you actually charge for each and every one of those calls today?). These conversations are evidence and reassurance to the client that you are their trusted advisor and you are there in their time of need. Accounting professionals may worry that the inclusion of this ongoing, included support will result in increased calls and decreased profits, but the opposite is true (you may see a slight increase initially during the first few months) and changes the conversations from solving self-inflicted problems to consultative advice and providing input prior to the client making mistakes. The ongoing communications are the key component that helps establish trust, helps lift you to trusted advisor status, and provides an ongoing opportunity to up-sell additional services.

Order of activities

Back to the scaling issue mentioned earlier. While the tips above are useful, the main method to scale is to divert any low value activities back on to the client to free you up to do high value, consultative, and frankly fun ones. These low value activities are the ones associated to the client in the contract, the ones you spend time onboarding and the ones that you’ll initially answer questions about. For those using Xero, you need to train your customers on (in order):

All these activities focus on getting the data in as fast as one can. The longer your client waits to enter it, the higher the chance the data never gets in and that critical info about the data is forgotten. This is one of the reasons Xero has spent so much time and effort on making bank reconciliation so easy, because it is so critical to getting and maintaining a real-time view on where a small business stands. Expense claims are second and, with Xero Touch, make it infinitely easier for an entire small business to capture expenses as they happen (just point, click and save). Invoicing is third and something most people do once a small business has the basics under control.

But how do we get the small business to do their part? This goes back to the contract. You need to spell out what they need to do, how quickly they need to do it, and possibly any penalties if they don’t (additional fees for you to complete or even removal of being a client). I have talked to several accounting professionals that have unbelievably successful and profitable practices even though their internal staff is small (handful), but their client count is in the hundreds upon hundreds. It all comes down to the agreed-upon rules.

One of the most interesting examples I came across when talking to Xero partners about this topic involved a partner setting the following three rules. These were rules that small businesses had to follow to work with him because they were the key to both parties working efficiently together. Folks either followed the rules or would need to find another accounting professional to work with. Pretty clear and pretty simple. The rules are:

  • Bank Reconciliation: Bank rec every morning (takes a few minutes each day)
  • Expense Claims: Pay, shoot, and complete expense claims in Xero Touch (takes seconds for each transaction)
  • Invoicing: Create an invoice in Xero within 12 hours of it being raised

By setting these rules and including them in the contract, the small business knows exactly what they need to do day in and day out. For the accounting professional, it creates a simple, predictable and repeatable process from client to client that enables them to go from a dozens and dozens of clients to hundreds upon hundreds with minimal staff to support. This fundamentally changes the economics of running your practice.

So today we covered the basics on how to begin the process of scaling up your practice to capture more and more of the whitespace I talked about in the first blog. Our next topic will be on Value-Based Pricing. To kick that off in depth, you can attend a webinar on Value-Based Pricing that I am hosting this Wednesday, February 13th at 11 – 12 PM PST featuring Michelle Long, CPA and Owner of Long for Success.


Gayle Buchanan
February 12, 2013 at 7.41 am

Looking forward to the webinar Michelle

Christopher Grindal
February 12, 2013 at 10.52 am

Ian, some interesting comments and solutions to an every increasing problem. A couple of questions:
1. Have you find the revision of the client engagement during the year occurs often, or merely annually when using Xero? This can be both a positive and negative to the business, but trying to ascertain if the scope of work increases (compliance) or actually decreases?
2. Is Xero offering to provide some templates as part of the partner program? Several partners that are new to value based billing (or monthly package fees) may find this useful, in the transition from hourly based billing
3. Where does the bookkeeper fit within this? From the above, this role is becoming redundant, with the client and trusted adviser (accountant) working together. Comments.

Peter Morgan
February 12, 2013 at 12.02 pm

When you refer to the client reconciling the bank do you mean reconciling it as accountants would understand it (to a bank statement balance) or reconciling it in Xero terminology (ie just coding the statement lines). The distinction is very important.

Chad Hewish
February 12, 2013 at 7.33 pm

@Peter – Xero would definitely be referring to it as coding.

Cloud 9 Accountants
February 12, 2013 at 8.20 pm

Peter – Yes the client reconciles the bank account to a bank statement balance. Xero software (except for the Ledger option) has daily bank feeds coming in from the clients bank accounts with the correct balances and this is what the client uses to “code” things or allocate to invoices, etc.

Ian Vacin
February 12, 2013 at 8.56 pm

Peter, when I refer to the client reconciling, it is in regards to the Xero terminology on the coding of the statement lines and, for instance, clicking OK to matched transactions.

Ian Vacin
February 13, 2013 at 8.08 pm

Christopher, thanks for the questions. Some answers for you. In regards to #1, it really depends on the client and really depends on the type of work you are providing and could be providing. You should be doing a full review at least yearly. With that review you should be revisiting pricing, services and the like. In a value-based pricing scenario, these conversations are easier than if you are doing hourly billing. However, if you increase your collaboration and provide ad hoc advice, you have the opportunity to add or modify services as you become more and more their trusted advisor. Therefore, increased interaction provides increased opportunity. There are definitely cases when the work becomes less, but, again, value-based pricing corrects for this since you are charging for the value of what is provided and not in regards to the number of hours to complete (to combat against inherent efficiency gains). I talk about this in depth in the Value-Based Pricing webinar and also in the next future blog post. In regards to #2, I am in the process of providing additional resources. There are some already in the Partner Marketing Resources under “Bundling” ( for Partners. The blogs and webinar are the starting point to flush this out more fully to help people make the transition. In regards to #3, nothing changes in regards to the bookkeeper. My usage of “client” is general and can be inclusive to the bookkeeper as well. It all depends on how the client wants to interact with their books, what stage the company is in, and what role the bookkeeper has taken on. The beauty of Xero is that the relationship between the client, the bookkeeper and the accountant is enriched since there is closer collaboration and visibility for everyone. For the bookkeeper, they continue to complete reconciliation, invoice processing – AR and AP, making sure all transactions are completed and funds collected, preparing reports for the business owner and CFO, managing add-ons, and more… again depending on what the small business owner can and wants to take on. So transition is still away from transaction, manual-based activities, but there is the opportunity for, and now the time to complete, deep reviews and process management / improvement.

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