How To Partner With Accountants

“What would you say to a senior executive who asks why the accounting channel can’t deliver results faster?”

I was asked this brilliant question by someone who works at a software business recently. It stuck with me. It encapsulates, in elegant simplicity, both the challenge and the opportunity of working with accountants as a B2B2B channel for your software solution. At Accountex, I found myself having variations on the same conversation with lots of software businesses looking to partner with accountants as a B2B2B route to market.?

After qualifying and working as an accountant, I’ve spent a decade partnering with accountants. First as Founder & CEO of Chaser. For the last two years, consulting with software businesses including Reducer, Spendesk and Xero. I continue to spend 20% of my time on this consulting work, alongside growing Mayday.

My initial answer to the above question will have delivered some value. But a great question deserves a great answer. Here is my attempt to provide it.

The Pierce Brosnan Problem

The biggest misunderstanding that afflicts software vendors looking to partner with accountants is what I call “The Pierce Brosnan Problem”. It takes it’s name from Mamma Mia: a musical hoot of a film, with a serviceable plot and dialogue designed to house renditions of ABBA hits. Alongside Meryl Streep, it stars Pierce Brosnan of James Bond fame. A man of many talents, singing unfortunately not one of them.

Watching Mamma Mia recently, as Brosnan was butchering ABBA’s classic “SOS”, I found myself wondering how a man who clearly can’t sing got cast in a singing role. My hypothesis is that the casting directors fell in love with the idea of him for the role based on second order nice to haves: he’s charming, British, handsome, a former James Bond. They rationalised that his inability to sing in tune wasn’t that big a problem alongside all these positive nice to haves. Whereas if those casting directors had started from first principles, that this is a musical film and therefore the prime requirement of an actor for this role is that they are able to sing well, Pierce would easily have been eliminated from consideration.?

What’s all this got to do with software vendors and accountants? So many software vendors do a similar thing in working with accountants as a B2B2B channel. They cast accountants in the role of salesperson for their solution. A role those accountants are simply not suited for, or indeed interested in playing. The software vendors are wilfully blind to this and rationalise it away based on second order factors: accountants are brilliantly placed as trusted business advisors to their clients, their broad client base offers a lucrative one to many opportunity if we can just convince the accountant that our product is great. They fundamentally miss the point that accountants have clients not customers, and the duty of care that comes with it.

What You Need To Understand

Doctors have patients. Doctors exist to protect patients from harm and navigate them to health. They have personal relationships with them. They are bound by codes of medical ethics, the earliest and most famous being the Hippocratic Oath.

Amazon has customers; people and businesses who purchase goods (or services) from them. Amazon’s mission is to be “Earth’s most customer-centric company”. They strive to delight their customers and keep them coming back. But there is no equivalent to the Hippocratic Oath that guides them and they don’t have personal relationships with their customers. First and foremost, customers are people for Amazon to sell things to and make money from.

Accountants lie in the middle. They have personal relationships with their clients. They have a duty of care to the clients by virtue of their professional bodies. They need to generate fees and profit for their accounting firm. But where there’s a trade off between that and their client’s best interests, the interests of the client must come first.

The biggest mistake a software vendor can make in working with accountants is to succumb to the Pierce Brosnan Problem and treat them as people who should think about their clients as customers. “They have 200 clients who could benefit from our solution. With our partner programme, they could make an extra ￡2,000 a month for their firm if they introduced it to all of them. Clearly they’ll want to do that”. But that is not how accountants think about their clients. Until they are convinced that their clients best interests are served by a particular software solution, the potential monetary benefits to them as a firm are a distant secondary nice to have.

Casting an accountant in the role of a conventional commercial partner, motivated solely by monetising their customer base, is a poor move. How can a software solution work effectively with accountants as a B2B2B channel to market?

AIU

There are three different ways an accountant may work with a particular software solution. These ways are not mutually exclusive. They may work with the software solution in one way for some clients and another way for others. Those three ways are:

1. Awareness
2. Introduce
3. Use

Use is the optimal way, if the opportunity for it exists. Awareness is the easiest, but most limited in terms of scale. Introduce can be lucrative, but is fraught with risk.

Use is as the name suggests. The accountant uses the software solution to deliver one or more services to their clients. The clients may interact with the product as part of that service. Or they may never see it. Accountants know how to sell and deliver services. They would not be in business if they didn’t. By using a particular software solution, they are going to be able to deliver those services in a better and/or more profitable way. That is why Use is the optimal way, if the possibility for it exists.

Awareness and Introduce are two sides of the same coin. In both cases, the accountant as trusted business advisor says to the client that they should use this software product. The context in which they do so is critically different. It is who makes the first move at the school disco.?

In Awareness, the client makes the first move. They ask for help in solving a particular problem. The accountant prescribes a software solution in answer to that request. They go down what I call the Reactive Road. The Reactive Road is safe. Accountants answer client questions all the time in fulfilling their duty of care. That’s why Awareness is the easiest route. It’s limited because of what I call The 7 Client Itch*. Every accountant will have 7 clients who have asked about the problem a particular software solution solves. That solution can be recommended into those clients swiftly and easily. But beyond that there is no way for the accountant to get more clients to ask the same question. It will just happen naturally, and slowly, over time.?

*For the avoidance of doubt, the 7 is just an arbitrary number in this context, chosen to play on the name of the film. You could more accurately call it The Small Handful of Clients Itch.?

In Introduce, the accountant makes the first move. The accountant recommends a particular software solution to a client as something they would benefit from. They go down what I call the Proactive Path. It’s potentially lucrative, because the Proactive Path can lead to a huge number of that firm’s clients. It’s fraught with risk, because in contemplating going down the Proactive Path, accountants face the Donnie Brasco Dilemma.

The Donnie Brasco Dilemma

Donnie Brasco is a 1997 American crime drama film based on a true story. It stars Al Pacino, and Johnny Depp in the title role as an FBI agent who infiltrates the mafia under the assumed identity of Donnie Brasco. Donnie builds a relationship with Mafia member Pacino. Pacino personally vouches for Donnie with the rest of the Mafia, thereby exposing him to their illegal activities. This is a huge step by Pacino, as the punishment for having introduced a “rat” into the Mafia is death. That is the Donnie Brasco Dilemma. Introducing a new person into the Mafia can bring new potential opportunities to make money, but the personal cost of making a bad introduction is huge.

Accountants face their version of the Donnie Brasco Dilemma whenever they recommend a software solution to a client. They are vouching that it won’t turn out to be a “rat”. Accounting is first and foremost a discipline about not getting things wrong. Accountants need to be good at identifying risks. They are brilliantly placed to imagine apocalyptic consequences of vouching for a “rat”: they will lose that client and all of the fee revenue they generate from them. Not just that, the disgruntled client will tell all the firm’s other clients that the firm made a dud recommendation to serve their own interests. Causing those clients to also leave.?

“That’s ridiculous. That would never happen”. Agreed, but it’s the accountant’s perception and mindset that matters. As that’s what drives their propensity to act as a partner. Against this backdrop, it’s easy to see why accountants have so little interest in referral fees* as a prime motivator for recommending a software solution to clients. This lack of interest is only compounded by restrictions of their professional bodies on accountants’ ability to accept such fees. Against the perceived potential downside of losing the client and ensuing reputational contagion, these referral fees offer a trivial potential upside.?

*The term referral fees is used as an umbrella to capture all ways an accountant could financially profit from recommending a software solution to clients. This could be a revenue share or one-off fee that the software solution pays to the accountant. Or it could be by way of the software solution selling to accountants at a wholesale discount, enabling them to make a margin on the price they charge the client.

I previously talked about Awareness and Introduce as two sides of the same coin, whereby an accountant will recommend a software solution to a client. The Donnie Brasco Dilemma is relevant for both. But it is dramatically more acute for Introduce. There the accountant takes the Proactive Path and is the one who initiates the conversation that culminates with a recommendation of the software solution. If that recommendation turns out to be a “rat”, the accountant has nowhere to hide. For Awareness, the accountant takes the Reactive Road and is responding to a client’s request in recommending the software solution. Now if that recommendation turns out to be a dud, it’s not great. But the accountant at least has justification that they were just doing their best in fulfilling their duty of care in responding to their client’s request for help.

The Implications Of The Donnie Brasco Dilemma

Ben Graham, the Godfather of value investing, famously said that markets are voting mechanisms in the short term, but weighing mechanisms in the long term. Accountants are weighing mechanisms in how they approach partnering with software solutions. They need long term confidence that the software solution is not going to be a “rat”. Many have been burned by what I call “The Curse Of The Latest Well Funded Fintech”. The deep-pocketed fintech decides they are going to grow quickly through accountants as a channel. They blow into town with huge fanfare. They take the biggest stand at a Xerocon. Their wildly unrealistic expectations soon meet reality. They mothball their accountant programme, leaving the early adopting accountants high and dry.?

There is a positive flip side of the Donnie Brasco Dilemma. Once the accountant has weighed the software solution and decided it’s not a “rat”, it’s very difficult for that software solution to be displaced. As with the Mafia: once you’re in, you’re in.

The implications of the Donnie Brasco dilemma can be summarised in one word: trust. Accountants need to trust your whole of product solution. The term “whole of product” is key. It is more than just the software solution itself and that it performs well. It is every interaction that the accountant’s client will have with your software business from sales to account management to customer support.

The Trust Equation

How to build that trust with accountants? This First Round Review post sets out a brilliant equation for trust:

Let’s break it down into its constituent parts and how they apply to partnering with accountants as a channel to market.

Credibility

People need to feel understood by someone in order for that person’s recommendation to be credible. Accountants are no different. Software solutions need to ensure that team members who will be working with accountants, properly understand them. They don’t need to train as accountants. But happy ignorance doesn’t work - as the tourist who makes no attempt to speak French in a Parisian restaurant soon discovers. Their team need a basic understanding of:

• What accounting is with its four pillars of: double entry bookkeeping, the profit & loss account, the balance sheet and the accruals principle;
• The hierarchy of client needs that accounting firms serve, which I organise in my (not yet quite as famous as Maslow’s) hierarchy of needs as:

• The role that professional qualifications play, with the different ones that accountants will work towards;
• Busy seasons - when they are and what drives them;
• The different types of firm. From sole traders through small single office firms all the way up to large multi office, multi territory firms and networks;
• The different services that accountants offer to their clients;
• Above all, the different types of the client relationship that the above factors will give rise to. What that means in terms of frequency and nature of client touch points and the ensuing scope to recommend a software solution.

If credibility with accountants were a game of Snakes and Ladders, which it kind of is, these are some snakes guaranteed to take you all the way back to the beginning (or even into negative territory):

• Never EVER use the term customer to describe an accountant’s client;
• Only ever talk about their accounting firm. Never their company;?
• And never use the term accountancies - a bizarre addition to the software company vernacular that I have never once heard an accountant use in describing themselves.

Look at who you can bring into your team that already has credibility with accountants due to past work with them. This is not a silver bullet, but it can absolutely accelerate things. Consumer products pay celebrities to advertise their brands for a reason.

Reliability

This is a straightforward one. Do what you say you will do. Especially when it is in relation to an interaction with an accountant’s client. They have vouched for you. That’s a huge move.

Avoid the trap of the Emperor’s New Software. It can be tempting to exaggerate a) what your product can do today, b) how quickly it will be able to do new things. Eventually the people see that the Emperor is in fact naked. They’ll never be able to look at him the same way. The same applies to accountants with your software solution.

I mentioned about “The Curse Of The Latest Well Funded Fintech”. This precedent is there. There’s nothing you can do to change that. What you can control is how you engage with it. Address it head on. Explain how this time really is different. Demonstrate that you are here for keeps. Set out your 5 year plan for the accounting channel. It will evolve and change as you learn new things. That doesn’t matter. What matters is that you have a 5 year plan and commitment that they can rely on and place trust in.

Authenticity

Again, really simple. People do business with people. Emotions are contagious. Be warm and passionate. Accountants will use their interactions with you as a proxy for the experience their clients are going to have with your business, whether that’s you personally or another team member.

Look for opportunities to engage with accountants to help them shape your product and approach. Xero and Sage set valuable precedent here with the work they do with their respective Partner Advisory Councils.

Self-Interest

Channel your inner JFK and, in the broadest sense possible, ask not what the accounting firm can do for you but what you can do for the accounting firm. Seek the truest spirit of partnership. Referral fees can catalyse at the margin, but as outlined above, they don’t drive behaviour. Think about what insights or support you could deliver to accountants that could help them:

• Retain more clients;
• Better serve clients - do more and better work for them;
• Acquire new clients;
• Attract and retain great team members.

We’ve covered the components of building the essential foundation of trust with accountants. Overarching all of this: it takes time. Start early. The best time to plant a tree was yesterday. The next best time is today.?

Then it’s about the tactics you use on top of that foundation of trust to partner with accountants effectively.

Talking Tactics

A discussion of tactics is best split by which of the three, non-mutually exclusive, ways of working with accountants a software business is pursuing:

1. Awareness
2. Introduce
3. Use

Awareness

You want the accountant to go down the Reactive Road. When a client comes to them with a problem that you can solve, you want the accountant to recommend your solution. The accountant needs to understand the situations in which you are the best and right solution. Before handing the client over to you. You need The Playbook. A lovely and light, at the same time as comprehensive enough, set of training and resources for the accountant’s team to be able to understand:

• Which clients your solution is for;
• What problem(s) you help clients solve;
• Scripts and supporting info (e.g. a one pager and/or explainer video) for them to use for discussions with clients;
• A clear process for what they do next with interested clients, including email templates where relevant.

Make it easy for them to do what you want them to do. Don’t make them think. They have more than enough of that to do in the rest of their work.

You can do a brilliant job of delivering The Playbook. But knowledge fades without use. Build in regular touch points with the relevant team members at the accountant. This could be calls or a regular partner newsletter.

I mentioned the idea of The 7 Client Itch. Awareness is great, but the accountant can’t drive the volume of client asks. Think about ways you can drive clients to the Reactive Road. Xero is rightly lionised for its success of going through accountants as a B2B2B channel to market. But they’ve also run some great brand marketing campaigns which drove small businesses to ask their accountant about this cool thing called Xero. What could you do to get the accountant’s clients asking them about the problem your solve and/or your solution specifically.

Introduce

All of the points in the Awareness section above about The Playbook and touch points are relevant to Introduce as well.

Because of the Donnie Brasco Dilemma, Introduce is going to take time to bring results at scale. Don’t be fooled if you get a couple of early introductions. Every accountant has a few clients that they have a particularly close relationship with, meaning the risk of incorrectly vouching for your software solution is much less prevalent.

How can you make the Proactive Path safer for accountants to go down? The conversation can’t be about selling your solution. In the true spirit of partnership, you need to give them knowledge or skills that help them to deliver value to clients, at the same time as surfacing the need that your solution solves. Is there something free you can give to the accountant that starts a conversation that ends with them introducing the client to you? Can you help them deliver a workshop clients, or deliver it together, that valuably educates the client about the area you operate in?

Like change, an introduction can only ever happen in a moment. Each introduction is going to be an individual conversation, whether that be in person, over the phone or via electronic message. Have a clear vision for how that conversation is going to go. If you don’t have a clear vision, ask the accountant how conversations with their clients go. Even better if you can shadow them.

Don’t be afraid to introduce accountability and targets. Your scope to do this correlates to how much value you’re providing them to deliver value to clients. Set targets and business plans. Make sure you have someone at the accountant, who has the requisite influence and authority, who has responsibility for these targets.

Use

The most important advice here is: don’t delude.?

Where the accountant is already delivering the service your solution will underpin, don’t delude about what proportion of their client base this service is relevant for. Don’t delude about how much better you are than their current way of delivering the solution. Unless you are significantly better, inertia is likely to block you.

If the accountant isn’t currently delivering the service, be honest and realistic about whether they will. Persuading an accountant to deliver a new service is phenomenally hard and will take a long time. At the very least, you need evidence of some pioneering firms who are already doing it.

Don’t delude about the consulting assistance you will need to provide to help the accountant deliver the service using your product. Xero has hundreds of people in their Partner Consulting team, whose focus is helping their clients use Xero with clients. Scrimping on consulting assistance today will bring a tidal wave of churn tomorrow.

A footnote in relation to use. It’s always great if an accountant can use your product for their own firm first. This is not always possible. Accountants don’t have much in the way of physical inventory to ship for example. But where possible, it’s a great way of accelerating the trust required to recommend or use you for clients. It may well be worth giving them a free licence so they can do this.

Answer The Actual Question, Please

3,700 words ago, I set out to answer the following question:

“What would you say to a senior executive who asks why the accounting channel can’t deliver results faster?”

I’d make sure that senior executive wasn’t succumbing to the Pierce Brosnan Problem. That they understood that accountants can’t be viewed as conventional commercial partners, with the clients vs customers distinction. I’d make sure that they/we were being honest and clear about which of AIU we are realistically able to pursue. I’d explain to them all of the things we are doing to maximise the trust equation. I’d explain the great work we were doing in relation to the tactics for our relevant way(s) of working with accountants.

I have an, at times excessive, propensity to deploy quotes of others. So I would probably close by saying that in Think And Grow Rich, Napoleon Hill talks about how Hollywood “acknowledges talent, recognises genius and pays off in money only after one has refused to quit”. I'd explain that the accounting channel is very similar in its interaction with software solutions. It acknowledges a great software product, it recognises (and demands) a fantastic whole of product experience but it pays off in money only after one has refused to quit.?

And then I’d politely tell that senior executive to be patient*.

*And of course, I'd also recommend they watch Mammia Mia if they haven’t already. Or even if they have, the best works of art being those that you take new things from every time.