July 2021

The hardest words (with apologies to Elton John)

“Sorry Seems to Be the Hardest Word.”

While this is one of Elton John’s most popular songs, I’d have to challenge him on the “hardest word” part—at least on behalf of accountants.

I’d argue that for us there are two harder words, especially when it comes to clients: “No” and “Goodbye.” But the fact is, there are times they need to be said for the sake of the business…and the sanity of you and your staff.

One of the most important keys to The Modern Firm® is building a client roster that contains as many of your ideal clients as possible. For those who aren’t familiar yet with a Modern Firm, ideal clients are those you love to serve and are good at serving.

When you first start out, it’s not always possible to choose your clients. For many firm owners, what tends to happen is that you’re grateful for anyone who walks in the door and chooses you. As the business grows, however, you learn to zero in on your competencies and refine your business goals through trial, error and study.

Over time, you realize that certain clients and industries suit your competencies and business goals better than others. You learn which services increase your revenue, and which services cost you more than they net you.

Finally, one day you flip the switch: You’re ready to concentrate on serving your ideal clients—the ones who need and use the talents you and your team bring to the table. You and your staff know their characteristics, and you’ve developed and trained everyone on the processes that ensure only ideal clients will enter your sales funnel. At this point, you’ve also determined which of the following categories your current clients fall into, using an intentional and thoughtful rating process:

  1. Clients who trust your firm, are loyal and will follow your lead without question.

  2. Clients you’ll need to ease into the new model, but who will eventually make the transition.

  3. Clients who make it clear they won’t transition and plan to remain as they are. (Over the years, I’ve found these tend to be tax-only clients or your high-maintenance, less profitable clients.)

It’s time to steer your business model, your processes and procedures—and hopefully your category A and B clients—in a new, consistent direction. This helps to eliminate those who aren’t ideal for your firm.

But what do you do with the clients in category C? First, keep in mind that it’s possible you may want to keep your best tax-only clients, as they represent reliable income for your firm. As for the rest of those clients…well, here’s where the rubber meets the road.

Use your words—and mean them

Will you let your less-than ideal clients dictate your workflow process, or will you take full control of your business? The choice really is that simple.

Believe me, I know it’s not easy to tell a new client no, or a legacy client goodbye. As human beings, it doesn’t come naturally to us—we’re wired to please and build relationships. So, yes, it will be tough at first and require practice and commitment to your firm’s vision. You’ll have to keep reminding yourself that to truly transform your business and build an ideal client base, you have to be on board with saying those two difficult words.

Once everyone on your team understands who your ideal clients are, and how to serve them, you’ll begin to feel the freedom of choosing who you want to serve. And as a bonus, a narrowly defined client base makes it so much easier to train staff and help them gain expertise in serving the niches you’ve defined.

Tips for transitioning legacy clients

Like any relationship, people and the businesses they patronize often change and grow in different directions—and a break-up can cause tension and hurt feelings. That’s why, just as you created a process for your ideal clients, you’ll need to create a transparent and empathetic process to transition less-than-ideal clients out of your base. It should keep their best interests (and your good reputation) in mind as well.

To help you with these communications, consider these tips:

  • A carefully drafted letter, email and/or one-on-one conversations. Consider not using a one-size-fits-all letter/email and tailor the letter to the situation (1040 client, business client, etc.).

  • Complete transparency as to why you’re making the change.

  • Ample notice of the changes and increased fees—if you decide to go that route.

  • A deadline by which they need to accept, in writing, your increased fees.

  • Reassurance that it’s not personal; you simply feel they’d be better served with a firm that specializes in their needs.

  • A reasonable transition period to allow them to find a new accountant.

  • A referral to a new accountant if the situation allows.

Of course, no matter how diplomatic and helpful you try to be, you could still end up with a disgruntled ex-client who lets everyone in town know how they feel about you. It’s a fact of life and business that you can’t please everyone, and as long as you’ve done your absolute best to accommodate their transition, don’t let them dissuade you from your vision.

Best advice is to not put off contacting these clients in the hope they’ll just go away. This will only delay your business transformation. If you’re not a Rootworks member, you may have a group of business peers you rely on for advice. And if you are a Rootworks member who’s nervous about taking that step, don’t forget our amazing community of members. They’re always ready to answer questions, engage in conversations and offer advice based on their own experiences.

For now, take a deep breath, and then make the leap. Those who summon the courage to say “No” and “Goodbye” are the ones who will be able to say—also in the immortal words of Elton John—“I’m Still Standing.”

Will that be you?


Who are your ideal clients?

Identifying your ideal clients is a foundational step towards working to become a modern firm, and it all starts with a single question: Who are the clients your firm wants to serve? These steps will help you determine the answer.

Step 1: Determine the characteristics that make up your ideal client.

It’s safe to say that almost every client in your firm is unique, but there are usually some clients you prefer doing business with over others. You can determine which client characteristics your firm values most by:

  • Having each partner and/or manager list their favorite clients to work with, along with 10 reasons each client is a favorite.

  • Consolidating everyone’s lists to narrow down which characteristics are the most important to the firm.

Step 2: Rate the firm’s existing clients to determine the current number of ideal clients.

Using the attributes the partners and/or managers have outlined as most important, rate your existing clients to see if they reflect the types of clients the firm is best at serving. These ratings create visibility within the firm and better enable you to define actionable goals by:

  • Defining the ranking attributes and a method to collect the information from your team. Examples of ranking attributes include:

    • Integrity

    • Values our service

    • Fees and payment

    • Multiple services

    • Cooperative

    • Books and records

    • Influence

    • High billings

    • Respectful

    • Core service offerings

(Note to Rootworks members: You can use the Client Transition Spreadsheet found in the Online Learning Library to collect responses.)

  • Meeting with staff who work directly with clients to review the client rating process. Partners and staff who work with a client should be involved in the rating process to not only ensure that the ratings are accurate, but that everyone knows how the client interacts with the firm.

  • Setting aside a block of time for partners and staff to work through rating their clients.

  • Compiling the ratings to identify a client’s overall rating.

Step 3: Create a plan to transition non-ideal clients to ideal clients

Now that your firm has identified its ideal client, it’s time to see if non-ideal (or lower-rated) clients can be moved into the ideal category by:

  • Determining whether there’s an opportunity to convert non-ideal clients to ideal, by:

    • Increasing fees

    • Standardizing services offered or technology used

    • Upselling the client on additional services

  • Establishing measurable goals to increase the number of ideal clients by converting non-ideal clients to ideal.

Step 4: Communicate the firm’s ideal client to the team and plan for non-ideal clients

Communicating your ideal client profile to staff ensures that everyone in the firm will be on the same page. This is also the time to define how incoming prospects are vetted to fit the ideal client profile, by:

  • Creating a presentation summary of data and examples of your ideal clients to show staff.

  • Creating a prospect checklist form to assist with gathering the qualifying data needed to determine whether a prospect is an ideal client.
    (Note to Rootworks members: You can use the New Business Client Prospect Checklist found in the Online Learning Library for this step.)

  • Educating staff about ideal clients, by asking questions like:

    • Why is it important?

    • What are the characteristics of your ideal client?

    • What should staff do if they feel they’re working with a non-ideal client?

    • What’s the vetting process to ensure that only prospects who fit your ideal client criteria enter the sales process?

    • How is the firm managing non-ideal clients?

Having clarity about the clients your firms want to service is a foundational step in becoming a more modern firm. It leads to standardizing your service offerings and your processes, and to greater scalability for your firm.

Rootworks members can log in to rootworks.com and check out the Business Model Basics Ideal Clients element for more information and resources.


Secure your domain: What you should know to keep your firm securely online

Your website domain is the key to your firm’s ability to communicate via email and your website. The domain is typically accessed/controlled through a registrar such as GoDaddy, EnCirca, Network Solutions or Register.com. Not having access to your domain, or failing to securely store your firm’s login credentials, can have major negative consequences.

Here’s what you should know:

Your registrar(s)—This is where you originally purchased your domain(s). If you don’t know who your registrar is, use an online lookup such as who.is to see where your domain is currently registered.

  • Not all registrars are created equal. Some registrars are faster at updating and propagating changes, provide better customer service and/or include basic domain privacy and security with your registration.

  • It’s possible to have multiple registrars if you’ve purchased more than one domain.

Your automatic renewal date—To avoid having both your email and website go offline, make sure you have automatic renewal enabled on your actively used domain(s).

  • This is a common setting for most registrars and typically only requires that you keep a valid form of payment on file.

Your level of privacy coverage—Your domain should have basic privacy, which involves redacting your who.is information online.

  • Any non-redacted personal details in your who.is information can be used for malicious purposes by spammers and bad actors. Some registrars provide this basic coverage with domain registration, while others require that you purchase it as an add on.

Your login credentials—Secure your login credentials and be prepared to securely share them with a tech when needed.

  • Some registrars provide a built-in function called Delegate Access, which allows you to securely share access to your domain with a trusted party. When this function isn’t available, we recommend using a password keeper that allows for sharing. This will avoid sending credentials over unsecured channels such as email.

Curious to learn more about the Domain Name System (DNS)? If you’re a Rootworks member log in to rootworks.com and check out our recent Technology Update webinar, which covers DNS and other topics.


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Your culture as content

Culture marketing showcases your best

In the last issue of Thought Leader, we explored the idea of creating a marketing culture—an environment where everyone on the team lives and expresses the brand values in their everyday interactions with clients. But reverse those two words, and you have a very different but no less powerful concept.

Culture marketing is the notion of taking your organization’s culture and using it as a form of content for your marketing channels. It’s using your available media to showcase the people, activities and actions that make your firm unique, engaging and irresistible. In other words, it’s a way to show your people living out those brand values we spoke of in the last issue.

Culture marketing is a topic that’s especially timely during a time when companies across the board are trying to attract the best talent in an extremely competitive market. What better way to do that than showing your firm at its best in a culture marketing campaign? Here are a few ideas on how you can make a splash:

Put people front and center

Featuring your employees in social media posts is showing what your brand is really about.

Whether it’s a photo album of your whole team participating in a community service project or spotlighting individuals and their interests and passions outside the office, it puts a human face on your firm and shows how being part of your team contributes to their overall success, happiness and fulfillment.

Let your people create your content

Have any staff who are artistically inclined? Any DIY whizzes that could share tips? Office rock stars with time-saving work hacks? Invite them to create content that you can share with your audience. It’s a great way to spool up the creative atmosphere in your firm.

Get in the holiday spirit

From the seasonal holidays to special events like a company picnic (sack races, anyone?), holiday images and posts always bring a human touch and lots of interest. You can showcase your commitment to diversity and inclusion by supplementing the traditional with customs and celebrations of people in other parts of the world. Ask employees if they have stories or experiences to share.

Food, glorious food

Here’s a topic everyone loves! Collect favorite recipes from staff and clients and share them on your social media channels.

Two words: Office pets

I don’t think I need to say any more about this one.

Be creative, be authentic, be social. (Remember it is social media, after all.) Look for opportunities to showcase your people and what they do, and you’ll also be expressing the qualities of your brand that make it irresistible. Just use your culture as your content!


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Team of Teams: New Rules of Engagement for a Complex World

by Stanley McChrystal, with Tantum Collins, David Silverman and Chris Fussell 


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What we’re working on

End-of-year events

We have two big events for Rootworks members coming up in the last quarter of 2021: Inspire and Gather.

Inspire, a virtual event for the entire firm, happens October 21-22. We’ll present on a variety of key topics spread out across a multitude of breakout sessions. Use the time to get together as a firm to help celebrate accomplishments and look ahead! Agenda topics will be announced in July.

Gather, an on-site event at the Ritz-Carlson in Sarasota, Florida, is scheduled for November 10-12. Gather will be different from our previous on-premise conferences (such as our last on-site event, Inspire 2019), in that it’s intended for firm leaders.

We’ll present a few keynote addresses, but the majority of the event will be dedicated to roundtable discussions on attendee-driven topics. There will also be a significant social element as Rootworks members get together in person again. Space at Gather will be limited.

Note to Gather registrants: In the coming weeks we’ll solicit input for discussion topics. If you’re interested in leading a session with your peers, you’ll be able to let us know that, too. Stay tuned!

Log in at Rootworks.com and go to Resources > Events to find registration for both events.

Upcoming webinars

Staff training and educational webinars

  • July 13 – Summer Culture Webinar

  • July 14 – Staff Training: Quirky Tips, Tricks, and Lightbulb Moments

  • July 21 – Staff Training: Best Practices for Bookkeeping and Payroll Staff

  • July 28 – Staff Training: Best Practices for Accounting Client Managers and Reviewers

Onvio Series webinars

  • July 1 – Episode 2: Considerations for Implementing Onvio

  • July 8 – Episode 3: Setup – Staff, Firm, and Document Settings

  • July 15 – Episode 4: Setup – Clients & Contacts

  • July 20 – Episode 5: Setup – Time Entry

  • July 27 – Episode 6: Setup – Billing & A/A

Register via your Rootworks.com account under Resources > Events > Webinars.