Last week I enjoyed a lively discussion with 35+ accountants at ICAEW HQ on the merits and value of being a virtual FD. Also, a real-life virtual FD, Peter Taafe, shared his insights into how to make virtual FD work. The discussion was valuable.
Clearly, I can’t drill down into the detail of FD work, but the advisory work this role demands I can, because it’s mostly what I’ve been doing with accountants for the last 15 years – advising them how to increase fees, profits and capital value.
Plus, I’ve recently been interviewing firms who actively deliver a virtual FD service and generate hundreds of £1,000s in fees from virtual FD work. The insights from these interviews contributed to last week’s discussion too.
Here’s a few pointers you might find of value to you and your firm…
Firstly, what motivates you?
Based on the interviews, 3 motivational drivers are at play:
- GROWTH – there’s an opportunity to earn healthy fees from virtual FD work partly because the value to the business owner is significant. This significant value means they are willing to pay for virtual FD guidance
- FEAR – the march of the machines and artificial intelligence is starting to impact the value of the technical and compliance work firms do and so fees need to be earned by other means. A virtual FD service can deliver great value and earn great fees and offset the lost work and lost fees
- CARE – a true professional is there to help clients, and many accountants want to make a difference to their clients’ businesses and lives. Making a difference, doing worthwhile work and conscientiousness are drivers for many firms delivering advisory services to clients
As long as the business owner is receiving enough value, it can be argued that the motivators for doing the virtual FD work are irrelevant.
However, if your sole driver is making money (not helping your client) then you’ll almost certainly struggle to establish long-lasting trusting virtual FD relationships (I’ll be digging into this more when we publish the interviews later in the year).
It pays to remember, as Frederick Reichheld suggests:– “profits are a consequence”
Secondly, what exactly DON’T you do?
Nick Williams from Intuit QuickBooks showed the group how we can and must use technology to reduce the amount of time and effort needed to do the data input work across accountancy firms.
Of course, it’s hard to start doing more ‘stuff’ if you haven’t stopped doing other ‘stuff’. Nick brilliantly showed us the merits of technology to free up person-hours across a firm. This then enables…
Third, what exactly do you do?
This might sound simple, but a virtual FD asks great questions in meetings.
Some have suggested that virtual FDs ask simple and obvious questions (they don’t even have to be great). Others have suggested you should ask brave questions.
In addition, as the experts in numbers, it makes sense for a virtual FD to ask questions about the numbers. A good FD would ask about the future numbers not just the current numbers or past numbers.
Which numbers? I would suggest you ask about the Key Predictive Indicators (KPIs) not just the obvious accountancy numbers.
Ask better questions about the numbers past, present and future and you’re on your way to being a valuable virtual FD. Real-time cloud accounting like QuickBooks Online helps, as do KPI products like Futrli. So…
…what to do next…
If you want a deeper insight into Key Predictive Indicators why not get yourself a copy of this 4-page easy-to-read report discussing how to find out the most valuable KPIs of every business you work with.
Wishing you every success on your journey to being a valuable virtual FD
PS On May 15th 2017 at 13.00 I’ll be running a webinar with the ICAEW and Nick Williams from Intuit QuickBooks sharing more insights into what and how you make the most of being a virtual FD – go here for more info