Humanise The Numbers - for ambitious accountants in practice

Roger Knecht, President of Universal Accounting, Author and Podcast Host

• Paul Shrimpling

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It was exciting to welcome Roger Knecht, the president of Universal Accounting, onto the Humanise the Numbers podcast. And I wasn't expecting to have what essentially turned into a 45-minutes sales training session with Roger. 

That ultimately is where the value in this podcast actually lies. Roger is so open, so structured, in running through how to construct a sales meeting, a client meeting, with the paymaster general of your firm, your clients – and with your prospects. 

Roger has a way of cutting through to a really simple structure, unpacking the motivators that he's discovered from working with firms all over the USA, as he is from across the pond. 

I hope you can join us on this interesting conversation with Roger, because of the practical, valuable and powerful insights on how to run better client meetings. You’ll also gain a more global perspective of the profession, one that is just as relevant to your firm, whether you're in Stoke-on-Trent or Halifax or Canterbury – it matters not. 

I hope you enjoy it as much as I did. Simply go to HumaniseTheNumbers.online or go to your favourite podcast platform, seek out Humanise the Numbers and check out this podcast with Roger Knecht. 

Please scroll down the podcast’s episode page for the contact information for Roger and for the additional, downloadable resources mentioned in the podcast.

Paul Shrimpling:

Welcome to the Humanize the Numbers podcast series Leaders, managers and owners of ambitious accounting firms sharing insights, successes and issues that will challenge you and connect you and your firm to the ways and means of transforming your firm's results.

Roger Knecht:

One of the things that you naturally need to be able to do is summarize what it is you've just heard. If, in a conversation, you're able to kind of restate what it is the person just shared, they're able to confirm yes, you heard me correctly and they're able to know for themselves. You were clearly paying attention. Generally speaking, in conversations it's like a volleyball or not volleyball, a tennis match I say something, you say something. I say something, you say something. And we fall oftentimes into this trap of, while you're finishing up what you're saying, I'm already in my mind kind of restating or formulating what I'm going to say next and I'm just waiting for you to pause or take a break, for me to jump in and now say what I'm saying. This slows down the conversation. When I'm going to restate what it is I've heard you say confirm or validate what it is that you've said and then go into what I'm saying. That whole flow slows things down and it makes people feel much more relaxed. It helps them feel as if they're understood, appreciated and valued.

Paul Shrimpling:

What can you and your team do to grow your accounting firm? Well, on this podcast discussion with Roger Necht from the United States, you will hear Roger unpack a whole raft of insights, strategies and skills that you and your team can use. That will grow fees, grow the value perception in the hearts and minds of your clients so that you can have a more successful firm. Let's go to that podcast discussion with Roger now.

Roger Knecht:

Hi there, roger Necht, president of Universal Accounting Center. I'm both a father, a husband, an author, but as well as a podcast host. So I'm excited to be here for the show, simply because we work with individuals who are trying to build what I refer to as the premier accounting firm. It's something I'm excited to discuss, simply because I feel passionate about our profession as accounting professionals and believe that we are the key to small businesses' success. So let's have a great conversation.

Paul Shrimpling:

Well, I think we're on the same page there. Certainly, roger, more about your experiences in this. What does the phrase humanize, the numbers mean to you and your background and your experience within this accounting space?

Roger Knecht:

Excellent question.

Roger Knecht:

So I've been saying this for a number of years.

Roger Knecht:

I feel that, as an accounting profession, we, for our clients, are oftentimes the translator or interpreter of the language of business.

Roger Knecht:

Accounting is the language of business.

Roger Knecht:

It's how the business is trying to communicate to the owner how it feels, what it likes, what it's enjoying, what it wants more of. And as it's trying to communicate this information, it's doing so in the numbers, and so what we felt oftentimes do as accounting professionals is really dive into those numbers and help extract from there the key takeaways, so that we can go to the business owner and say here are some of the insights, things that you need to be listening for, watching, observing, doing more of. These are the things you need to stop considering doing, and why? Because, as the financial reports come out, it's not simply enough to simply set them aside or put them in a file. What we need to understand is, as business owners, they don't read the financial reports like what we do, but yet, as this information is coming over in a different language, it has valuable information. We just need to do a much better job as accounting professionals to interpret it and help our clients best understand what the business is trying to say so you use the word there in interpret.

Paul Shrimpling:

So translator, interpreter of the language of business, the numbers. Is it just a case of you know? This isn't French, it's English American. It isn't you know Italian, it's English American. There's more to it than just the interpretation, isn't there? Aren't we there also? Aren't you there also to facilitate decision-making? Is it just to go? Look, here's your numbers. This is what it means. Crack on. Where do you stand on that?

Roger Knecht:

Roger, oh, beautiful question. Simply because I do believe that there are three core services that every accounting profession can consider offering. It's what the business owner is expecting from the accounting profession as a whole. It's bookkeeping and accounting, tax planning and preparation, cfo and advisory. And what you're describing there is the CFO and advisory level. It's where we're getting into the business structure and what it is that that business organization needs to be. Let me illustrate this real quickly for you.

Roger Knecht:

Bookkeeping is everything that's done within the business to record the transactions, up to and including preparing the financial reports. That's bookkeeping and for many of us, that's the service we offer. We basically go into the client and provide for them the financial reports, and that's wonderful. As long as it's accurate and timely, they should be happy. But there's another level to that and that's the accounting level. Accounting is now where you're doing the analysis of those reports. You're actually looking for the trends. You're trying to identify what the business is trying to communicate and say.

Roger Knecht:

But at the accounting level that's where it ends, because what we want to also consider is the business owner wants to know is there a better way to run my business more profitably, more efficiently? Can you help me address my cashflow problems. That I'm dealing with. That's not a bookkeeping question, that's not an accounting question. That's a CFO and advisory question. At that CFO and advisory level, that's where we're getting involved with our clients as to do they have in place the proper procedures to manage their payables, their receivables? Are we doing enough to actually help with cash flow management, doing things to assist with their capital? These are the things that happen at that higher level when we're involved with the business model as to how they're running the business. It's ultimately the business owner's decision as to what they implement. But when we're having those conversations and asking those questions that's where we're doing those is at that CFO advisory level.

Paul Shrimpling:

That's where we're doing those is at that CFO advisory level. How would you unpack the perceived value ratings or rankings if you would Roger around bookkeeping, tax and CFO From a client's perspective? Which ones? In your experience is a client, seeing as the profoundly or component? I know they're all valuable, it's just how would you rank them?

Roger Knecht:

Well, the way I actually describe them as to the way the business owner, I think, perceives them, is for those that are just business owners, thinking that they need to be compliant they just need to have the information to file their tax returns. They need the information so that they can at least say that they have their numbers. If that's all they're looking for, bookkeeping is sufficient, because they're not looking to be engaged with at that level of let's analyze and interpret and understand the information. But there are business owners that do appreciate and value what insights they can gain from the financial reports and for that they're willing to pay, for the accounting they're willing to say can you give me an understanding of what the business is saying? Simply because of the fact I lived it. I'm here day by day. I understand what's happening, but I need an outside perspective to draw attention to the things I need to be aware of. That's the accounting level, and there are business owners that do value the information from an accounting perspective.

Roger Knecht:

However, there are those people who see value in CFO work, advisory work, and for that reason they want to have it.

Roger Knecht:

But because they're perhaps too small of an organization and can't employ someone full-time as a CFO. They wonder is there a fractional CFO type service out there that might be able to assist me, that can help me make business decisions at a financial level? It's enough to say I've got a business here that has a great product, a great service. There's a lot to say. I know how to market and sell it. There's a lot to say I know how to fulfill and take care of my customers. But to do so profitably involves, obviously, bringing in someone at that CFO advisory level that can actually assist with the cashflow management, ensuring that we're actually meeting our tax obligations, more importantly, perhaps mitigating our tax liabilities because we're actually the leveraged tax code to our benefit. But it's also that idea of what can we do to be better forward thinking in our business planning for the future, doing the budgeting, the forecasting, getting the capital we need as we need it for the business growth. Those are the things that are happening at that cfo advisory level.

Paul Shrimpling:

yeah, yeah the difference isn't between what's happened in the business and actually what do you want to happen in the business. It's that you know past focus versus future focused conversations real distinction, isn't it?

Roger Knecht:

yeah. So it's the question. It's the question of, therefore, what. I mean, you've got the information, we've discussed what's happening financially, but how many of us are actually then taking that next step to ask, okay, therefore, what, what do we take with this information and do with it now? And for an accounting professional to actually have that conversation with the business owner of what are you going to do differently? Because you now know this is a powerful question to ask and consider this is a powerful question to ask and consider because it stimulates a a much deeper conversation.

Paul Shrimpling:

have you got an example of from your experience, or experience of the accountants that you've worked with, where that that's so obvious and transparent that the question therefore, what which, by the way, I love, you know the two-word question that just kicks off a really profound conversation? Potentially, I think, what's made this podcast valuable already. I'm looking for a specific example, roger, please, exactly.

Roger Knecht:

Yeah, I can give you one. So in our business we actually have a division called Universal Business Builder where we do business coaching, and it's where we're actually filling in this space of CFO and advisory services. One client that comes to mind happens to be an individual that was running a very successful business, but he was dealing with some cashflow struggles. The cashflow that he was dealing with was twofold One he was working with a lot of businesses that he felt were, let's say, friends or associates, such that he was unable to ask them for the cash in his mind to actually pay for the expenses associated with delivering the product. So basically what it was is he was a swag company. He was selling things such as t-shirts, mouse pads, whatever the case may be. He would actually take an order, but because he was getting them from businesses that he was associated with, he struggled to say I needed a 50% deposit, and so what he was essentially doing is fronting the money as it was needed to actually order the product, and then the client was actually then paying upon delivery or thereafter, and so oftentimes the funds as they were coming in as he got paid, was paying for the next product, not paying for that product. And so it was Peter robbing Peter to pay Paul. And so, as he was running his business, he was dealing with some cash flow growth issues because he was starting to take on more clients buying more product than his past ones were. And so, all of a sudden, there's this snowball effect of he's fronting the business with his own cash and now we ran into a cash problem because he was taking money from credit cards. He was taking it from his personal bank account, he was taking it from a business loan. He had a business line of credit he was leveraging. Well, the problem was is which of these is the right one to use first? Where's the interest accruing fastest? That he needs to avoid? And so it was basically helping him understand that if he could actually use the business money first the money that he had to the bank account, before actually leveraging the, say, the line of credit or the business loan he was in a much better position If he actually used the business line of credit last, because its interest accrues on a daily basis.

Roger Knecht:

Based on his terms, he was able to say okay, first line of credit is going to be my bank account. If I have money in the bank, let's use that, because I haven't, I won't be paying interest on it. The next would be the credit card. The credit card for him actually gave him as many as 45 days that he could leverage before having to pay any interest whatsoever. Well, if he could actually get the money, pay off the product or buy the product and then deliver the product fast enough that the client paid before the credit card bill was due, it was an interest-free loan to him, so that was something that he should be taking advantage of.

Roger Knecht:

The next was actually the business loan that he had gotten to start the business. Well, he had the money already. He was already making monthly payments and the interest associated with it, so it wasn't as if that was going to go up. The last line of defense in his situation was the line of credit, because as he utilized those funds again, it was going to incur an interest amount on a daily basis. Well, he had this all backwards. He was using the line of credit too often. He was actually not really taking advantage of his credit card, and so the point was, as we said, use these monies in this order.

Roger Knecht:

He started to pay much less interest. He started to experience fewer penalties because of late payments. He was able to actually go to his clients and actually say that he had in the company a policy that any company that was first using his services needed to make a 50% deposit those that he had a history with. He was able to take a 30% deposit.

Roger Knecht:

Well, as he started to implement these policies as it related to cash flow and he started to use his money more wisely, he found that not only did he have the cash to run the business and he didn't have to use his personal that was a plus. The second was he was paying much less in interest and penalties. He was getting a larger profit margin. It changed his business model. The stresses that he was experiencing running his company started to basically fall away because he was more intelligently running the business. And all of this discussion stemmed from not being a bookkeeper. It didn't stem from the analysis. It stemmed from the CFO advisory discussion of what can we do to your business model to ensure that you're more efficient and more profitable?

Paul Shrimpling:

So the therefore, what question was connected with this? Is the way you're running it now more profitable. So the therefore, what question was connected with this? Is the way you're running it now. Therefore, well, if you continue this way, the challenges you're experiencing aren't going to go away. They may well get bigger and deeper. Therefore, what are you going to do about it? Well, let's investigate and look at that and then, based on the conversation you've just shared there, the insights you've just shared there, roger, they turn their business around thanks to the stimulus of one or two very simple questions.

Roger Knecht:

Yeah, one of the things that he was dealing with at the time is he was struggling to justify growth. How do I grow my business if I'm always having to front load the cash to pay for the product that my client isn't paying for yet? And so he was stifling his own growth. He was discouraging himself from taking on another client and doing the sales calls. He was putting those off simply because he didn't feel he had the cash to do it. Well, when he put in place the policy to get either the 30% or 50% down, that changed the game, and then, when he started to realize that he could actually leverage his cash a little differently, he was excited to go out and grow the business. He was willing to go out and get more clients because he didn't feel that those were obstacles now or challenges he had to then address, because he was just creating his own problems. Yeah, yeah.

Paul Shrimpling:

So it sounds as though just taking a slight step back, because that's a really good deep insight in terms of how well, here's what the numbers are saying. Of how well here's what the numbers are saying, therefore, what unpacks a better discussion that can result in profound changes in the way the business is run and generates much better results and therefore creates the opportunity for growth. When I go back to that earlier question around how's the value of bookkeeping as well and accounts tax and then virtual CFO, you answered in such a way, roger, that you suggested actually, when you go into a meeting with a new prospective client, you're looking to establish which category does this business owner drop into? Are they a virtual CFO client? Are they an accounts and tax client? Are they a bookkeeping about a client? Have I interpreted that in the right way? It's very much a client categorization insight that you you, you potentially hunting for there yeah.

Roger Knecht:

So this is actually related to marketing, it's related to pricing, it's related to the client, onboarding and managing their expectations. So let's just kind of unpack this a little bit. As a firm, one of the things that I feel that we need to do a really good job of is describe our services in such a way that the client understands not only what they're getting but how it benefits them. And so we need to step back and say what are we really doing for our clients so that we can package our services in such a way that they're willing to pay for it and understand what they got? So I've earlier mentioned those three core services bookkeeping and accounting, tax planning and preparation, cf1 advisory. Well, at the bookkeeping, accounting level, it's just what are you interested in getting? Are you just needing the compliance? Are you just wanting the financial reports, or would you appreciate some analysis, interpretation, some, therefore, what discussions about how I can actually see how the business is being run and is there a way to improve it? Well, if I'm at that level, I'm able to now price my services, to say, when you pay for your services, you're going to get, let's say, not just the bookkeeping but the accounting. When it goes to the tax planning and preparation. Are you just simply asking that I'm filing the returns, that I'm taking the numbers and, in a timely manner, getting them in before the deadline, or are you hoping that we're gonna meet throughout the year and actually have discussions about ways to mitigate your tax liability legally? Well, if that's the case, I need to actually meet with you throughout the year to ensure that not only are we having a discussion about what can you do, but we're helping you actually take care of them so that they're done by the deadline, so I can apply those actual things to the tax code and actually get the benefit that you deserve. Well, that's something that's going to require additional meetings and conversations. If it's CFO and advisory, we're going to have meetings about your business model. We're going to talk about compensation plans as it relates to your employees. We're going to be talking about capital whether or not you need an infusion of cash, what you're doing to actually pay those back. More importantly, what are you doing to actually leverage the business as it relates to business lines of credit, business loans let's say, credit cards and so forth? These are things that we're going to have as a conversation that relate to your business structure. So what are these? What of these interest you? What of these do you want to have?

Roger Knecht:

And somebody may say I'm only interested in the bookkeeping, just keep me compliant, and I'm happy. Someone's going to say you know, I love what, I'm only interested in the bookkeeping. Just keep me compliant. And I'm happy. Someone's going to say you know, I love what I'm doing, but I'm kind of a fish out of water here as it relates to running a business. Are you able to actually assist me so that I can do this and do so profitably, so I can sleep at night understanding that the cash flow is there? Yeah, I can do that. Okay, that's going to require this level of service. Therefore, it's going to be the bookkeeping, accounting and CFO and advisory.

Roger Knecht:

These types of discussions basically lend themselves well to the marketing. Am I able to explain this in the sales material that I'm producing? Am I having this as part of my conversation? But also it comes to pricing and we can have a lengthy conversation about pricing. But I'm a very big proponent of both menu pricing as well as value pricing, and this is conducive to either of those. But with the menu pricing, imagine you just have three packages for your clients. I can do this, this or this which would you like to do, and that's one of these things that this assists with.

Paul Shrimpling:

So I get the.

Paul Shrimpling:

You, as an accountant, need to be clear on what your offer is so that you can communicate it in a simple, clear and easy to understand way and how it might impact on a particular business, depending on what they want, whether it be at the bookkeeping level, whether it be at the accounts and tax level, whether it be at the virtual CFO level, so you can present that as options.

Paul Shrimpling:

But often isn't it about asking decent questions of a business owner so that they can tell you what they want, as opposed to you going look, these are your options, which one do you want? And they may not really understand and so therefore choose the wrong one for them. And so you mentioned earlier about it's the quality of the questions you know. It's that that's a key skill in your ability to open up a meaningful and valuable dialogue with either a client or a prospective client. Um, so would you unpack for me what you see as being the either key specific questions or key questioning skills that the people listening into this podcast who lead and manage teams of people in accounting firms could should be taking seriously?

Roger Knecht:

Certainly. So. What I'm hearing you ask is simply, at the sales level, before we actually get the engagement, how do we help the client to realize the value of what it is we truly can offer and be willing to pay for that? So let's kind of unpack that as to, if I'm in a conversation with a potential client, what do I help them understand and, more importantly, what do I help them realize the benefits of my services are. So what I want to do is and I'm just going to kind of break this down into a timeline imagine if you have an hour-long conversation with a client that's been scheduled and you're meeting with them at their office. I'm genuinely going to be interested in this next hour, but I need to actually compartmentalize some things so that I can be effective in my time use. I've got to manage the time and clearly I'm perhaps in their office and so this is for them to maybe can kind of control or or manage the time, but I'm wanting to see if I can actually stay in control of what's going on so I can make my offer at the end. So for the first 15 minutes I just want to talk about the client. I want to be in a situation where I'm able to discuss with them who they are, what they do, why they start the business, show a genuine curiosity in their company and organization. Sometimes it even turns into a tour as I'm going back to the office hey, can you take me around your business? I'd love to see what it is you do here and just kind of see what's the operations like. And sometimes people just get excited as they're taking you around because this is their comfort zone, this is what they like and you're showing a genuine interest in it. Well, after that tour, you go back to the office and you sit down. Just because of the curiosity you had in their business, they'll typically reciprocate. Well, tell me about yours and you're able to give a little bit of your backstory who you are, what caused you to get into business, more importantly, what it is that you do and how your clients benefit. And this kind of sets the stage for what you were asking how do we get the client to understand the various levels of services that we offer and, more importantly, realize the benefit of them?

Roger Knecht:

Well, I'm going to transition into then some questions. And this is quite key. It's not me telling the client, it's me asking great questions and listening. That's really going to benefit this conversation. So I want to ask questions such as how valuable is the accounting in your business? Do you use? Use this as you're making business decisions? What are some good accounting experiences you've had where it's actually helped you more effectively or profitably run your business?

Roger Knecht:

Now what I'm doing is I'm getting them to realize or see that the accounting has a purpose, a value, a place in their decision-making. And if I'm getting them to reflect back on either yes, I've had value in this, this or no, I've never considered this, I've actually never utilized this before. This is new to me. What you're asking I've never actually done. Well, you're still causing them to realize that there's a value here that they can tap into if they choose.

Roger Knecht:

Now, after these last 15 minutes, I've hopefully, through the questions, gotten them to realize that accounting serves a purpose or may be of benefit to them. I'm now hopefully going to have them ask well, what is it that you do? How can you help me? All of the sudden, I've got these last 15 minutes to do, in essence, my presentation of services and ask for the business. And in asking for the business, I'm going to be very clear you have choices here.

Roger Knecht:

As a business owner, you may decide which is best for your needs. Once they tell me what they're willing to pay for, then I'm going to give them the quote for the service. I'm not going to give them necessarily dollar amounts. I'm going to say which of these is the best fit for your needs and then from that I can quote you what my services will cost. So, generally speaking, that's just going to lead into a conversation of are you more interested in just the compliance, just to know that you've got the numbers in a timely manner and that you're just actually ready for tax season, or would you really appreciate some analysis, some information regarding the business, some deep dives into the trends.

Roger Knecht:

What's going on with the business, your profit margins perhaps we're talking about your ratios as it relates to gross profit, to, let's say, payroll All these things all of a sudden become intriguing to them.

Roger Knecht:

But they might actually be interested in the tax services that I was able to discuss, or perhaps the CFO and advisory where I'm able to say would you be more interested in services as it relates to cash flow management, maybe making more efficient decisions within your business to improve profitability? Are those the types of things that interest you. All of a sudden now they're able to be more clear about what they're hoping to get out of this conversation and what they're willing to pay for. So if I'm asking the right questions, I'm going to hear what it is they have as pains and I'm able to address then the benefits of why they ought to work with me. I'm the authority, I'm the expert, I'm the one that can bring value. Here's how it's going to be felt or manifest within this conversation, within our relationship, how it's going to be benefited within your company. So, at the end of the day, I'm hoping that the client really feels that this is now something they're willing and wanting to pay for.

Paul Shrimpling:

Yeah, I like the structure that you shared there there. So, uh, 15 minutes. If you've got 60 minutes, 15 minutes of curious about them personally and their business, uh to uh create the um, the reciprocal. They now want to know about you. The chances are that will happen, um, and you can pose a question that then prompts them to start to ask you what you do and why.

Roger Knecht:

Well, it definitely differs from the more traditional type conversation of here's what I do, here's what I offer and here's what I charge. There's no conversation about them, there's no interest or curiosity in them. It's very one-sided, it's very much a sales presentation or pitch and it's less a conversation and it's less two peers coming together to address a specific need. Yeah, yeah, this is?

Paul Shrimpling:

uh, this is one of my hobby horse subjects, roger, so I'm delighted that you brought this up, because it's the ultimately your, your willingness to be curious enough and care enough about them and their business, that earns you the right to potentially help them buy from you. Uh, so that's why I like the running order of this. So you're curious about them personally, their business. They then or an opportunity. You create an opportunity for them to be curious about what you do and how you do it and what, where the value equation lies within what you do for your clients, which then triggers a series of questions around the challenges that they're facing, have faced, maybe aren't even aware of, about their business past, their business present, their business future. That then results in the last 15 minutes of a conversation around well, what sort of structure of services are likely to best help you get what you want to avoid the pain and realize the opportunity you see within your business?

Paul Shrimpling:

Um, I love that very simple four-part uh structure to a whether it be 60 minutes, whether it be 30 minutes, you know it's or 90 minutes, for that matter. Very good. So we're curious. Clearly we're gonna ask decent questions. Clearly, then we need to listen at a deep enough level so that they can see that you've got it? Have you got any insights on how accountants, leaders, managers and accounting firms can demonstrate that they're listening well enough to these curious questions that they're playing out? Roger?

Roger Knecht:

Oh, excellent question. So, yeah, one of the things that I think we naturally do is we jump from what it is we've just heard into what we feel we need to say next, rather than summarizing what we've just heard, which you just did an excellent job of. I shared with you what I felt the structure of a 60-minute presentation ought to consist of, and you just took the moment to actually summarize that before asking me the next question. It showed that you were genuinely interested. You were interested, you were paying attention, you took notes and that really does help in the conversation show that you're paying attention. So one of the things that you naturally need to be able to do is summarize what it is you've just heard. If, in a conversation, you're able to kind of restate what it is the person just shared, they're able to confirm yes, you heard me correctly, and they're able to know for themselves. You were clearly paying attention.

Roger Knecht:

Generally speaking, in conversations it's like a volleyball or not volleyball, a tennis match. I say something, you say something. It's like a volleyball or not volleyball, a tennis match. I say something, you say something, I say something, you say something, and we fall oftentimes into this trap of, while you're finishing up what you're saying. I'm already in my mind, kind of restating or formulating what I'm going to say next, and I'm just waiting for you to pause or take a break, for me to jump in and now say what I'm saying. This slows down the conversation when I'm going to restate what it is I've heard you say, confirm or validate what it is that you've said, and then go into what I'm saying. That whole flow slows things down and it makes people feel much more relaxed. It helps them feel as if they're understood, appreciated and valued. Yeah, it does.

Paul Shrimpling:

Yeah, it does. Edgar Sheen is one of your countrymen. His series of books and I'll put, I'll put the link in the show notes to he's got a concept called Humble Inquiry, roger, and I've mentioned it before on this podcast. I just think it's a stunning phrase in itself. Is that humble inquiry? You know you?

Paul Shrimpling:

Yes, you are, you know you can translate the numbers, but you don't hold the position of arrogance around that. You hold a position of humility in order to then be curious enough, care enough and be committed to help enough. That, by the way, I love your phrase slows the conversation down and earns the right for them to trust that they're bookkeeping their accounts and tax and the future decision making around the virtual CFO stuff is in good hands. Because this is about trust, isn't it? As much as anything? You've got to earn the right to that and I think by just backing off from being a anything like a salesperson, just be a curious person that cares enough and is committed to help enough. The positioning of that, I think, is what the profession is, is well placed to do and maybe sometimes doesn't make the most of that opportunity. I don't know what you think of that.

Roger Knecht:

Well, I love it because in the sales training that we offer here at Universal Accounting Center I don't know if your listeners are aware, but we're a post-secondary school for accounting professionals One of the trainings we offer is strategic selling and, as well, selling with confidence, and each of those one of the things that we're trying to emphasize is the very word that you just shared. It's that curiosity, that natural curiosity that we often have as children, needs to be kind of brought to the surface again, and I think accounting is a beautiful way to actually find that same curiosity, because we as accountants can be curious about business. We can go into every one of our clients and find out not only why they got into business but how they do this. How do you get someone to actually build a product or offer a service that someone is willing to exchange financial gain for and there's a transaction happening here? I'm curious about this, and how do you do that profitably? So to go into a business owner and help me understand their model is powerful.

Roger Knecht:

It's just a curious interest, and as I'm doing this, oftentimes the business owners they'll share or volunteer. I've never had anyone ask me these questions. I've never had anyone curious enough about my business. This is kind of fun I've never verbally or outwardly expressed this before and they just get, like a child, genuinely excited about the fact that someone's interested in them. And so it's a curiosity that I think plays well into the client engagement process, because what that business owner wants is someone that's excited about their business like they are. And, as an accounting professional, if you could just kind of find that interest, find that curiosity, you're going to be a more likely candidate to be their accountant.

Paul Shrimpling:

Well, yes, you are more likely, you're also going to be more likable and you're going to be more trustworthy in that client's eyes, aren't you? I just again, it isn't complicated and that's why I love when we have these conversations. It's just be more human than accountant when it comes to having conversations with your clients. The accountancy bit's relevant because you are the translator, the interpreter, but it's actually drop into that human space, which that's why I love. What um um shine talks about is that you know, be curious, care enough, be committed to help enough. You, you're absolutely rock solid in the right space to earn that trust. Love it, love it. So, uh, just changing tack slightly, roger, because, um, any accounting business any business for that matter isn't just about how you work with your clients. You've got to work with your team. What's your thoughts, based on all of your experiences within the profession, around how you humanize the numbers with your team so that they can do a better job with your clients?

Roger Knecht:

So we actually have a program that we teach here at Universal Accounting that is called the STAR program, and it's meant to actually build a culture based on accountability, and it's really built around the idea of key performance indicators. Everyone in the organization, every department in the organization, the company itself, each has a key metric for which they're responsible for. There's one specific thing that they have as a responsibility, a role. Well, what we try to do, then, is complement that with as many as three to five supporting metrics that we're watching that actually serve to indicate whether or not they're working towards that key metric that they're responsible for. Well, what I'm pointing out here is, with our STAR program, we first of all want to focus on the things that they have control over, so we have what's called tools, training and temperament. This is where we're actually going to focus on the strengths that they have in their organization, the skills and experience. That's why they have the role they have. Well, do they have the tools to do the job? Do they have the training to use those tools effectively and do so productively in the company? And then, do they have the right attitude in the business, the temperament, to actually come in and do the job with a positive attitude. Well, those things are very important, but what we're trying to do is then work towards this key metric.

Roger Knecht:

Now I'm going to just kind of go through the STAR acronym real quickly for you. As we build this culture of accountability, we definitely want, with T, to trust them. We want to be able to A acknowledge them, they want to feel like they are a contributor to the success of the business and we want to be able to give them the recognition that they deserve, which is the R in the STAR acronym. So we really want to focus on these things, s being strength, by the way. So if you've got the strengths and you've got the trust, and you've got the ability to acknowledge and recognize them, you can have an organization that has team players that are all committed to the same outcome, each responsible for a very key element, that key metric, in accomplishing this. So that's, that's the easiest way I would answer the question that you just asked.

Paul Shrimpling:

Okay, so we've got this blend of tools, training and temperament. Tools training that that's a competence piece and temperament sounds like a character piece hard to train. Or would you take issue with?

Roger Knecht:

that, yeah, I'd take. Well, yes and no. So temperament was to have the three Ts. You couldn't say attitude, so we said temperament instead of attitude.

Roger Knecht:

But, temperament is basically to say everyone comes at life in different ways. You can be a pessimist, you can be an optimist. There are people who are victims. There are people who are definitely a little bit more confident in their skills. What we're looking for is someone that doesn't bring drama to the office.

Roger Knecht:

I I very much want to emphasize that we're all trying to work hard and we all have lives outside of work, but at the end of the day, what we've done is we've traded our time to work in the office, and so someone that's coming into the office. If they're not giving me their time and attention, I'm struggling to understand whether or not I'm getting my full worth out of what I've paid for. I've paid you for your time. You have a skill and a talent that you're bringing to the table so many hours a day and I'm expecting you to deliver that. So if you're always on your phone or you're always wanting to discuss about things, discuss things that are outside of work, we're away from the purpose, which is you've got a key responsibility, something you need to accomplish. Are you doing it Now?

Roger Knecht:

It's not to say that we're trying to be impersonable. We're not trying to. We don't care. That's not what I'm implying. What I am trying to say, though, is we're trying to work deliberately, intentionally, and when you have that kind of culture where everyone's actually clear as to what's expected of them, all of a sudden I think everyone gets a little bit more intense on what is it that I can do to deliver my part of the puzzle, and it does create, I think, a very clear expectation of the employee. So back to the point of temperament or attitude. Yeah, we want to avoid the drama. There are, unfortunately, individuals that can be toxic in an, an organization and we're trying to extract them because of that.

Paul Shrimpling:

Yeah, yeah, yeah, and it's a. There's an accountability piece in there, isn't there? If you know, if there is drama, it's actually that needs to be dealt with and there's obviously certain sets of skills attached to that. But I just wonder if, are you this is my interpretation of what you've just said there in and around that attitude, temperamental space? If you're going to bring accountability to play, you need a set of values and behavioral standards in a business, do you not? In order to go look, this is how it works here.

Paul Shrimpling:

So, for example, in our business, roger, we've got three core values Be wholehearted or don't do it. And if you can't be wholehearted, let's have a meaningful conflict conversation to work out how to get you to a place where you are, or not to do it, or find someone else. So, be wholehearted, do worthwhile work. If you don't feel it's worthwhile work for the business, clients, the community and yourselves then we're missing the trick. So we've got to work on that. So wholehearted, worthwhile, and then it's got to be worthy of notice. You've got to do it to a standard that plays out well and you feel a sense of achievement. The clients can see it's to a standard.

Paul Shrimpling:

So they're just three examples of our core values, and we've had instances in the business where, you know, someone hasn't been wholehearted and we've had to tackle it, but at least it gives us a reference point. Are you suggesting that, in that temperament space, that would be part of the equation, to deal with the challenges in that space? Because there are. You know, we've worked with accounting firms for 24 years and you know whether it be around the director partner table or across teams, you know those challenges present themselves and they're hard to deal with unless you've got a reference point, a platform of which I think values and behavioral standards can help. What are your thoughts?

Roger Knecht:

Yeah, I think what you've done there is. You've captured great the culture that you're trying to create, the expectations that you're having of those people that are on the team. I'm going to add to it just one thing whenever you're working with an individual and they're struggling to meet that wholehearted effort, they're struggling to actually do worthwhile tasks or work, one of the things that I want to do is have a standard, and that's that key metric I was speaking of earlier. When we have a level of expectation, certain work that needs to be done, a deadline upon which they need to have it completed, what we can ultimately do is say either you did or you didn't do it. It's quantifiable. We can definitively say you either did or didn't do what was expected.

Roger Knecht:

And whenever they are not meeting expectation, what we're listening for is this what do they say is the cause or perhaps their excuse for not getting it done, if they're playing the victim card, the things, or perhaps their excuse for not getting it done, if they're playing the victim card, that things outside of their control are impacting them? I want to know are these tools or trainings that we can internally address, or are these outside factors that we have no control over. And if someone is saying that life outside of work is impacting their productivity, we have a problem because clearly you have something outside of work that needs to be addressed because it's bleeding into the workforce. However, if what you're dealing with is internal, it's something going on in the organization, the tools, the training or perhaps the temperament of the office. That's something I do have some influence over and it's something that we can address internally.

Roger Knecht:

I can get you the tools you need. I can give you the training that you're needing as well the temperament. We can address some of the things that are perhaps going on in the office space, but whenever you're bringing something in that's outside of your control or my control, I have to beg the question of how are we going to address this? Because clearly, the expectation doesn't change I still need you to do your job and so to work wholeheartedly on something, something that you can be excited about, that you can deliver quality services on. Those things are all very relevant to what it was you were sharing earlier. It just needs to be done in the context of if you're not doing your job, help me understand what's missing so that we can actually address it, because, at the end of the day, we either need to change the people or change the people.

Paul Shrimpling:

And we have to decide quickly. Which is it going to be? Yeah, and you can change the things, control the controllables internal. You can't necessarily take responsibility or control the external ones. They've got to do that for themselves. And if it continues to bleed in the business, then there is a bigger problem.

Paul Shrimpling:

Very good, so, roger, there's externally, client-facing, prospect-facing. Be curious, uh, care, ask the right questions, take slow down by. Uh, just being genuinely interested in the person in front of you transforms the depth of relationship and even a 60 minute discussion that, if you're trying to sell, you'll never achieve. I think is a fair summary of what we were talking about earlier. And then, when it comes to humanising the numbers with your team, it's about setting a standard, having a core metric and support metrics that back up and support the clarity and transparency around why you're here, what are you here to do?

Paul Shrimpling:

It's very obvious and therefore you can feel a sense of achievement when you hit those numbers and you know I go back to this rota research from it's a maybe a decade or so old now, but when you've got 13.7 million employee surveys as a reference point, it's quite a big survey to take seriously suggest that sense of achievement is key. Sense of camaraderie is also key. Um, so what are your thoughts in that space around building a sense of camaraderie? Because if it's achievement only around the kpis, for example, uh, we're it's. It's very much a numbers driven, not a hang on, we're all in this together type space, ie camaraderie. What are your thoughts about how a leader or manager of a team builds out a great sense of camaraderie to make their experience of working within your business feel good, not just doing good?

Roger Knecht:

Yeah, excellent question, and it really comes down to whether or not you know what motivates an individual. So let me kind of set the stage for this. We used to have an office where our employees were all basically at a central location. People came into an office, you saw one another in the hallway, you interacted with your peers. Right now, most of my employees basically 90% of them are remote workers. I have them around the United States, internationally, and, as I'm working with these individuals, I don't get to see them in a social setting, and so it's difficult to keep things personable and keep them as individuals when, clearly, we're managing towards these metrics that I mentioned earlier, these key performance indicators. Either you did or didn't do what was expected of you and what you were paid to do. So what we need to do is go back to these key motivators that I was alluding to a moment ago and let me define them. They've actually identified that most individuals are motivated by one of four key things. It's either they're motivated by time, money, recognition or altruism, and what we need to do, as good leaders, is understand which of these is motivating to the individual that we're working with in the company, and it's part of our culture. It culture is basically saying I see you for who you are and I know what it is that motivates you. So let me give you an example. If you've got a situation where you have to have someone work, say, late hours or this upcoming weekend, because there's something going on with a client and we need to take care of it, and you're going to ask them the employee to go above and beyond, you need them to do something that is unexpected. You've got one of four things that you can now bring to the table to actually motivate them. Now, before I go any further of the time money, recognition and altruism. I have to tell you that very few people are motivated by altruism. Altruism is where, when they're finished with their job, they're willing to stick around and help someone else. They're willing to dive in and actually assist another individual. It's a trait that many people have, but it's oftentimes not the key motivator. What happens to be the case is one of the other three generally is more common, and so let's just kind of dive more into those individually.

Roger Knecht:

Imagine you've got a key employee that you've actually asked to work this weekend and you've got one of three things that you can use as the carrot to say, and in exchange I'm going to give you something extra. You could say I'm going to give you money. If you work this weekend, I'll give you a few hundred dollars more, I'll give you a bonus of $500. And that employee might just be motivated entirely by the fact that, hey, I need the $500. Maybe I've got some expenses at home I need to take care of. This will really make a nice dent in that. They would love the money. It would actually be a game changer for them. But take this second individual. You give them $500, it just ends up in the bank account. They just don't really have any more money or need for that money in the sense that it wouldn't be life-changing.

Roger Knecht:

But time they're at a point in their life where perhaps they have a child, a grandchild, they've got a hobby that they would prefer to be doing outside of the office and you say work for me on Saturday and I'll give you Monday and Tuesday off. Well, all of a sudden they're like you know, I don't need the money, but the time I've got maybe a project I need to take care of, a hobby I would prefer to be doing. I've got time with someone that I'd like to go see prefer to be doing. I've got time with someone that I'd like to go see. All of a sudden the time is much more valuable to them because you're giving them time off paid and they're happy with this. The other person is recognition. Yeah, the money, yeah, it'd be nice, but again, it's not going to change their life. They're fine financially.

Roger Knecht:

Time honestly, they don't know what they would do at the time. You give them time, what they don't have a hobby per se. They don't have anyone necessarily that they need to go see. They would just be sitting at home watching tv, wasting their time and really it'd be boring to them. So they enjoy coming to the office. So giving them time off doesn't matter to them, but recognition, the public acknowledgement that what they're doing matters, that what they've done has really significantly helped.

Roger Knecht:

They need that, that confirmation. They want to know that they're valued, appreciated, seen, and so, all of the sudden, that employee of the month, the employee that actually gets the parking spot in front of the office, whatever the case may be, matters to them, because that self-esteem that they have is contingent upon whether or not they're seeing that they're making a difference and that they're valued. Well, if we can meet them where their need is, they're going to be more inclined to do what we're asking and do so more enthusiastically. So, when it comes to motivators, if you can create within your culture where your leaders know what motivates each individual, that's going to be very powerful, simply because you're going to be able to offer them the things that they're needing to actually make their life that much more rewarding. So, if you can take a moment and try and identify for each of your employees which it is, so that when those moments arise that you're needing to ask them to go above and beyond, you can reward them accordingly.

Paul Shrimpling:

Yeah, you just made me think of. There was a meta study and I'm going to put a link in the show notes to a business breakthrough report we did that references this study by I think it's David Rock, I think. Anyway, it'll be in the show notes and it'll be labelled the motivators and what you've just described in that time money and recognition, and maybe even the altruism piece as well is that that's how you unpack building a sense of fairness. You know so, you're going to do this. So, in order for this to feel fair, either you get time back in lieu, you get money as a reward, or you get recognition across the business, or we'll plant 600 trees because you've invested time in this. Well, you know. However, you define the ultimate altruism altruism piece. I mentioned the trees just because every download to this podcast, roger actually gets a tree built. That not built, a tree planted. You can't build trees, can you? A tree planted, that's. That's our little space of altruism connected to the podcast. Um, beautiful, thank you. So that's part of the fairness piece which I think it's David Rock suggests is a key component of motivation. He then also talks about status, certainty, autonomy and relatedness as being some of those drivers in the background. But I love the way that time, money, recognition and altruism, you know, enables you to work out what is fair for this person.

Paul Shrimpling:

Because, going back to the Sarota study and again I'll put a URL link to the business breakthrough that unpacks how you build an enthusiastic team. They say look, there's a sense of achievement. Yes, there's a sense of camaraderie, yes, and yes, there's a sense of achievement. Yes, there's a sense of camaraderie, yes, and yes, there's a sense of fairness, which you've unpacked brilliantly with those four elements. And what that research points to is, if you don't have a sense of fairness, you will not be able to build a sense of achievement and you will not be able to build a sense of camaraderie, because it's the fundamental foundation of an effective business and a place where a team is wanting to be engaged and enthusiastic. I love that, really do Interesting, isn't it? Something as simple as fairness should be ultimately the underpinnings of any successful team. Roger.

Roger Knecht:

Well, fairness is an interesting word. I think it's very difficult to acquire. Everyone has their perspective as to what fair may be, but to be striving for it, to show that you're actually trying, I think, does go a long way. So whether or not you're achieving it, I don't know. It's perhaps this always elusive type thing, but to strive for, to be trying, that says a lot.

Paul Shrimpling:

Yeah, I think you're right. Does it ever always feel fair to everybody across the organisation? Well, no, it's not going to. Is it Because everyone's world, everyone's life, is ebbing and flowing? But the fact that you're committed to achieving that sense of fairness, person by person, team by team, says a lot about the fact that you care about the people that are working within your business. Yeah, marvellous. So, roger, I'm wondering we've covered a fairly broad range of insights in and around that humaniser, numbers, piece, kpis, motivations, curiosity. I'm wondering, of all the work you've done with all the firms and all the businesses that you've experienced with, of the topics we've covered today, what one thing and I know it's a tough question, but what one thing stands out from this conversation that's made you think in a deeper way, that is relevant to you and your business and your customers, Just so that the people listening to this can go well. If that's made, roger, think, I need to think long and hard, in a deeper way about that.

Roger Knecht:

Well, it's reminded me that this is a people business. One of the things that I think we get caught up in as an accounting profession are the numbers. I mean, naturally, that's what we're drawn to. We like it, it's comfortable to us. But at the end of the day, we have to recognize that this is a people business, both our employees within the firm. As we're working with them, we have to see them for who they are and, at the same time, see what we can do to help them be successful. But it's likewise with our business clients. We're here to serve them so that they can accomplish their individual goals, and so it's not these relationships with a business, it's a business relationship with a person, and so what we just need to do is be reminded of the fact that, at the end of the day, as much as we may want to think this is a numbers business, it's truly a people business.

Paul Shrimpling:

Yeah, 100%, there's. It's one person at a time, almost, isn't it you know, one team member at a time, one customer client at a time. But how do you also then build the to use your analysis, the tools, the training and the temperament to ensure that you're delivering at the standard that you want to deliver as a firm? Roger, I've loved our 50 plus minutes together, unpacking in quite a detailed way actually some profoundly powerful insights. I can't thank you enough for taking time out of your very busy schedule and sharing those insights with us today. Thank you.

Roger Knecht:

You're very welcome. You know, as an accounting school, we work with a lot of firms trying to help them actually take this personal approach to business and actually get an idea of what it is. They can have what I refer to as the premier accounting firm in their area. So every time I have these opportunities to have a discussion about these tools, these opportunities, I just truly enjoy it because, as a profession, I think this is exactly what we need to be discussing.

Paul Shrimpling:

So thank you for the opportunity and you have to always know this if it's about accounting, it is universal. Great line, Great line. Love it, Roger.

Roger Knecht:

It's been a real pleasure. Thank you, my pleasure as well. Take care, paul.

Paul Shrimpling:

On this podcast. Roger has brilliantly unpacked a number of insight, strategies and skills that will help you grow your accounting firm, improve prices, improve the value equation in the hearts and minds of your clients and hopefully help them buy more services and recommend you and your firm more. If you consider yourself to be ambitious for growth and want to join the Accountants Growth Academy with a bunch of like-minded ambitious accountants, check out the URL in the show notes for the Accountants Growth Academy. You'll find more valuable discussions with the leaders of ambitious accounting firms at humanizethenumbersonline. You can also sign up to be notified each time a new podcast is made available. You're about to hear a short excerpt from a podcast discussion with Stephen Paul of the accountancy firm Valued up in the North East. If you like what you're hearing and you want to go to the full podcast, please go to itunes or spotify or go to humanize the numbersonline.

Speaker 3:

Every single relationship I have with a client is based around the human aspect. Your business is a tool to give you the life and the money and the purpose that you want. What we've got to do as a profession is we've got to understand our clients' why and purpose. As soon as we're understanding their why and their purpose, we can actually help them to help themselves through their business, to get a better life. It's so important to me, paul.

Speaker 3:

I just I get so hung up on the fact and I've done this, I've been really guilty of it.

Speaker 3:

We look on Instagram, we look on the fact and I've done this, I've been really guilty of it.

Speaker 3:

We look on instagram, we look on linkedin and we think, well, I'm not traveling first class, I'm not living that life, I aren't good, I'm not good enough and all of a sudden, you've got this huge imposter syndrome which, let's be honest, we also from anywhere. We compare ourselves to other and when we're comparing ourselves to the other business owners that we're seeing on Instagram, on social media, we feel inadequate. And because we feel inadequate, we don't actually grow our business and we plough ourselves even more into the daily grind. That's not the right thing. As soon as we talk to our clients about humanising the numbers, to use that phrase it's like a light bulb goes off. It's a spark that can turn someone's dull I'm going to say dull existence, but that's probably the wrong word but someone's dull at work they become a slave to their own business into something that they've got that day one passion again, and it's wonderful to see that. I don't think there's a better feeling, to be honest.