February 2022

The new world of smart client management

Like many other things in our lives right now, it really is a whole new world when it comes to managing a small accounting firm.

The old days of slugging it out, sucking it up and just getting the job done are becoming a thing of the past. Today, that strategy might be the riskiest move you could make. Why? Let’s find out.

A quick trip back…

It’s 2012, and you’re in peak tax season mode. Tax clients are moving through the firm faster than the chocolates on Lucy and Ethel’s factory assembly line. Your team has, in effect, said goodbye to their families for four months; you’re cranking out returns at a furious pace; and you’ve forgotten what daylight looks like if it’s not filtered through a plate-glass window.

Everyone’s overworked and stressed—and not just about work. One employee’s childcare has fallen through, an accountant is having car issues and you’re trying to figure out how to leave the office long enough to get your 80-year-old mother to an important medical appointment.

The tension level is so high that you can’t help wondering whether the mutterings you hear about it being time to leave the tax and accounting industry are real this time. Luckily, your team has been with you for ages, and you do your best to make them happy. Competitive pay, once-a-week lunches during tax season, and no issues with vacation time in the summer. So they wouldn’t go anywhere…right? In any case, no time to dwell on it now; you’ve got clients to herd—er, manage.

Fast forward to 2022…

And is it ever 2022! What a difference a decade makes, especially when a hundred-year event like a pandemic plays a game of 52 Pickup with pretty much everything in our lives.

During that time, employees moved home to work…and they liked it. (How much? An October 2021 Gallup poll said 91% of U.S. workers who work at least some hours remotely hope they can continue to work at home after the pandemic. Of that number, 54% hope for a hybrid arrangement, while 37% hope to work exclusively from home.) They found that working remotely, even part of the time, gave them extra hours they could put toward the “life” part of a true work-life balance.

As we watched the world change, people began to realize that life is too short to spend it at a job that keeps them from the people and experiences they value most. That realization has led to what’s now known as the Great Resignation (which some are actually calling The Great Reassessment), as millions of people leave employers who can’t (or won’t) give them the life they want, to find employers who will.

Now, just about everyone has workforce challenges. People and firms are leaving the accounting profession in droves, which leaves supply dangerously low while demand for our services has risen—classic supply and demand issues we learned about in college.

Clearly, the “same old same old” is not the right playbook here. Not now—and possibly not ever again—because it’s a strategy that doesn’t consider the human beings needed to make it work. And if there’s anything business owners should have learned in this new work world, it’s that you need to think about the humans behind the job.

So, how do we position our small firms to deal with such significant shifts? With a reduced workforce, how do we continue to serve our clients the way we’ve always served them—to the fullest extent?

Smart firm, smart client service

In a word (well, three words), the answer is smart client management—the ongoing process of actively managing your client base. I’m not talking about practice management software, although that’s certainly part of the equation.

Smart client management is the act of finding, keeping, maximizing revenue from serving to the fullest, automating to the extent possible and outsourcing what can be outsourced—all to capture and retain your ideal clients.

Historically, firms simply took on new clients (anyone who walked through the door, literally), buckled down and got it done no matter how good, bad or ugly the client experience. Today, we’re living in times that require us to step up and take charge…and to be honest, that’s a good thing for our businesses.

Now is the time to make choices, define ideal clients, get those clients and to actively manage them at the right prices, technologies, service levels and product mix—all of which combine to create the businesses we’re striving for.

“But, Darren, I’ve been doing that,” you might say. Again, I have to be honest: The majority of firm owners I’ve met—and I’m including myself in that number—have been afraid to actively manage their clients, just don’t think they have time, or it’s never been a priority. After all, that might mean saying no to someone. Or turning a client or prospect away. Or raising prices regularly. As a result, too often I see a hesitancy to commit to complete smart client management—from firm staff who don’t understand it to firm leaders who are afraid to enforce it.

I’ll be the first to admit this is a big topic, more than I can cover in a single article. That’s why, depending on membership level, Rootworks offers members a number of excellent resources to help them explore, understand and implement smart client management. Because, let’s face it, the hardest part is knowing where to start.

We offer members a proven roadmap to follow, what we term Business Model Basics, making it easy to start your journey to smart client management. We also offer staff trainings, an online learning center, software- and business-specific coaching, Mastermind groups and lots more. I honestly think that our lineup of resources is one of the most comprehensive out there and worth checking out at rootworks.com.

Everyone in your firm should understand the concept behind smart client management and be actively in pursuit of this goal in order to fully realize the firm they want to have and work for. Why? Because smart client management leads to better clients, better revenues and better employee experiences—everything you’ve worked toward for your business and your life.


Keeping data safe in a remote work environment

Remember the days when working from home meant lugging folders or boxes full of client documents back and forth? And scrambling to find a place to tuck or lock away those files when visitors dropped by so no one else could sneak a look at the information inside?

Even when a laptop was added to the “working from home” arsenal and you logged into a virtual environment from your home computer, your supporting documentation still needed to be at your side—and off the family dining table and locked away when you weren’t using it.

Now, many of us work in a fully remote environment. Client documentation lives in our systems, which we can access from virtually anywhere. But given the rate at which cybercrimes are committed these days, it’s more critical than ever to keep that information private. One security slip, and the resulting damage to a person or a business could be disastrous.

Keeping your data safe online

When fraudulent activity occurs on a credit card, banks have systems in place to recognize unusual activity that triggers a hold on our credit card to avoid large unauthorized purchases.

Firms also need to have procedures in place to thwart attacks, damage or unauthorized access to documents and systems within the firm. Multi-factor authentication (MFA) has become more prevalent as we all look for ways to keep data safe. Systems that contain personally identifiable information (PII) should use MFA to ensure that only authorized users can access the data.

Working remotely also means we need to be aware of our connections to the internet. When using a home Wi-Fi connection, make sure the password is enabled. If staff accesses Wi-Fi from a public connection, a virtual private network (VPN) allows private data to be accessed safely by encrypting internet traffic and creating an impenetrable wall of security. When a public connection (like those at a coffee shop) is necessary, a VPN is a must.

Keeping your workspace safe

As we focus on the technical ways to keep our data safe, we can’t forget to focus on physical access to information. Just as we locked away client documents in folders and boxes years ago to keep away prying eyes, we need to think about doing that in our remote workspaces.

Default settings—such as locking the screen after a short period of inactivity and establishing a habit of locking the workstation when stepping away from the desk—are simple but effective ways to prevent unauthorized access or view of PII. Other ways to be sure your workspace is secure:

  • Don’t write passwords on a sticky note and attach them to the computer! This seems obvious, but it’s still a common practice.

  • Encourage strong passwords so they aren’t easily guessed. Varying password requirements (e.g., minimum 10 characters vs. 8 characters, must contain a special character vs. must contain a number) prevent the same password from being used for multiple systems.

  • Be aware of your surroundings when working; facing the monitors away from others is another often-overlooked security measure. Look around, look behind you. Who can see your screen?

Here’s an example of this warning in action. Recently, I was at a swim meet. In the bleachers ahead of me, another parent was working on a laptop computer. For those who don’t know, swim meets involve a few hours of sitting and waiting to see a favorite swimmer race for less than 5 minutes, which makes it a good time to get some work done. However…this parent was a medical doctor catching up on patient notes. All the encryption, passwords and security measures didn’t prevent me from seeing the patients’ names and detailed medical information from the previous day’s visits over the physician’s shoulder.

Remote work can be just as safe as—or even safer than—working in a dedicated office. It takes a concerted effort to design systems and workspaces that support data security. Cybersecurity training educates all staff, remote and in-office, on data security—including how easily it can be seen by others and how to prevent that from happening so client data is kept private.

Rootworks members can find a “Security for remote employees” checklist in the Online Learning Library at rootworks.com to get started on having the items in place to promote safety, security, business confidentiality and privacy.


Run DMARC – It’s Tricky

Online fraud happens every day. It comes in all forms and sizes, and the majority of fraudulent online activity starts with or includes the most mundane way to communicate online: Email.

It’s also sadly common in today’s online landscape to hear that a firm is dealing with fraudulent activity. So in these dishonest times, what can a modern firm do?

Start by raising your firm’s awareness of available email security options and verify what you already have in place. Doing so will set you on the path to expanding your knowledge of email security—and in the process, hopefully, bring you a little peace of mind, as well.

This article will help, too, by covering the basics of Domain-based Message Authentication, Reporting, and Conformance—DMARC—and providing you with some questions to raise with your firm’s IT professional.

SPECIAL NOTE: Before we dig into the details of DMARC, for those of you who think I misspelled a band name in the article’s title, you’re half correct. While the group Run-D.M.C. did release a single in 1987 titled “It’s Tricky,” what I’m really doing here is shamelessly drawing some attention to the email authentication called DMARC.

So now that I’ve adequately dated myself and given you some throwback jams to load up in Spotify, let’s discuss DMARC—and, as the title indicates, it’s tricky.

DMARC uses Sender Policy Framework (SPF) and DomainKeys Identified Mail Domain Name System (DKIM) DNS records to prove to ISPs and mail services that emails are being sent from a legitimate source. This helps to prevent direct email spoofing—a tactic commonly used for spam and phishing attacks to convince users that an email was sent to them from a person or company they know and trust. In plain non-technical English, DMARC helps your firm’s email become more secure.

The implementation can be tricky, hence the need to reach out to your IT professional. When you do, raise the following questions:

  • Does my firm’s current email provider support DMARC? (Most do, but it never hurts to verify this first.)

  • Is DMARC set up for my domain?

  • Should my firm implement DMARC? If so, when?

  • Are there any additional settings or protocols we should pursue besides DMARC to further secure our email?

Want to learn more about DMARC? Check out dmarc.org for additional technical and non-technical details.


The ins and outs of marketing

Inbound vs. outbound: What’s it all about?

Chances are, you’ve heard people talk about “inbound marketing” and “outbound marketing,” but what does that mean, and what’s the significance to your firm? Is one better or more appropriate for you than the other? Do you have to choose one or the other exclusively? Let’s break it down and clarify the ins and outs.

Outbound marketing

Traditionally, outbound activity has been the mainstay of marketing. It involves targeting an audience and delivering advertising to them through various media channels. It can be thought of as an “interruptive” form of marketing communication because it is delivered to audiences in various media without their request or permission. Traditional mass media such as newspapers, magazines, radio, television, outdoor and telemarketing all fall into this category, as well as digital display ads—the ads you see popping up in the headers and sidebars of websites you visit.

Another way to consider outbound marketing is to think of it as a one-way flow, from advertiser to consumer, rather like a game of darts. You take aim at the target, let your message fly and hope it hits the mark and gets a response. Contrast that to a two-way flow of engagement that’s more like a game of ping-pong. That’s inbound marketing.

Inbound marketing

The concept of inbound marketing took hold with the growth of digital and social media. Unlike slinging outbound advertising at targeted prospects, inbound marketing seeks to pull prospects to you by engaging them with useful or interesting information. Examples include newsletters, white papers, blog posts, eBooks and videos, to name a handful.

Sound familiar? It’s what we usually refer to as “content marketing.” That is, focusing not on a direct sales pitch, but piquing interest, being helpful and pulling prospects to you by establishing credibility, expertise and authority in your profession. This form of marketing has grown exponentially in the past decade, not only because it creates more meaningful engagement with prospects, but also because it contributes to overall online presence and search engine rankings. More high-quality, relevant online content tied to you generally produces a higher rank for you on the search engine results pages. In other words, it helps people find you online at the exact moment they’re searching for a solution. And that’s the right time and place to create engagement. If you want to read more about the importance of this, read Google’s eBook, Winning the Zero Moment of Truth.

Both, and…

So which is right for your firm? The answer is probably both. And indeed, the lines have become blurred enough that trying to draw a line between the two is almost pointless. For example, if you want to offer a free whitepaper for download in your social media posts, you might elect to pay to have your post promoted, which, ironically, starts to look and feel a lot like outbound activity (i.e., targeting an audience for paid distribution of your message). The only substantial difference is that inbound messaging is more highly informational, rather than a pointed sales pitch. But you’ll still want to include a call to action for prospects either way (e.g., “download your free white paper,” “call us for more information,” “schedule a free assessment,” etc.)

Best advice: Don’t get hung up on the inbound/outbound labels. Simply concentrate on producing relevant, highly valuable content to attract prospects and use traditional paid advertising techniques to get that content in front of the right people.

Getting too obsessed over in and out will probably just put you sideways.


The 48 Laws of Power
by Robert Greene, with Joost Elffers

Miracle and Wonder: Conversations with Paul Simon
by Malcolm Gladwell and Bruce Headlam, with Paul Simon

Dopesick: Dealers, Doctors, and the Drug Company that Addicted America
by Beth Macy

A Brief History of Time
by Stephen Hawking


What we’re working on

(Still) coming soon: Mastermind Group #4!

We planned to start a new Mastermind Group in January, but the group is still in the process of forming. Which is great news for potential Masterminds; it means you haven’t missed out.

So far, we’ve had a lot of success and fun with our first three Mastermind Groups. The format and structure we’ve created provides a strong foundation for firm owners to help and learn from each other.

If you’re a firm partner whose firm has been a Rootworks member for at least one year, and you’re interested in monthly Zoom small-group discussions with 5-10 other firm owners (which includes sharing financial information with other group members), please apply here: https://rootworks.com/mastermind.

Note that applying doesn’t mean you’ve purchased or finalized anything; putting your name on the list is simply the first step and lets us know you’re interested.

The fee is $500 per month. Groups are facilitated by fellow Rootworks members.

Upcoming webinars

  • February 2: Staff Training: Electronic filing refresher

  • February 9: Staff Training: Tax return delivery and electronic signature process

  • March 2: Staff Training: Tax season status check and extension filing process

  • Mach 23: Staff Training: Evolving your bookkeeping process with Botkeeper

  • March 30: Staff Training: Post-tax season firm retreat planning 

See the entire webinar schedule and register at Resources > Events > Webinars in your rootworks.com account.

Member anniversaries

It’s time to recognize the February Rootworks member anniversaries! Help us wish the following firms a Happy Rootworks Anniversary:

One Year

FiveBridge CPAs

Crossroads Tax Advisors

B F Tax Management and Resolution Inc

Jennifer R. Chick CPA, LLC

Serenity Tax & Accounting LLC

Ten Years

Bower, Dole & Riniker, LLP

Howell Associates

Congratulations on your success, and we look forward to celebrating many more anniversaries with you and your teams!