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3 things firms must do to not only survive, but thrive
A look at how venture capital investment is changing the game

By Darren Root, CEO

What do you think was going through Yellow Cab franchise owners’ minds on February 14, 2011 with the public announcement that Uber raised $11 million in venture capital? Your first guess might be “fear-based thoughts.” But, in reality, it’s likely that they were thinking about anything but Uber. The fact is, it would have been almost impossible to foresee the impending disruption that came just a few short years later.   

Fast forward to May 2019. As I listened to a tech podcast on the nearly $300 million in venture capital being invested in the tax and accounting tech space, what do you think was going through my mind? Unlike Yellow Cab, I immediately thought about the pending disruption to the profession.

If you haven’t been paying attention until recently, check out companies like bench.co, ScaleFactor.com and pilot.com…to name only a few. Or, take a moment to catch up on announcements around QuickBooks® and TurboTax® Live. Over the past few years, I’ve been sounding the alarm that our professional world is about to change drastically. We are in the same position as Yellow Cab was back in 2011.

With the knowledge of disruption in other industries, the question we should ask ourselves is: “How do we handle it?” Before I answer that, however, let’s take a look at the strengths of those that are attempting to disrupt. The way I see it, the disruptors have significant strengths in two of the three core competencies (along with deep pockets):

  1. Clarity—If you take a look at each of the technology vendors listed above, you will notice that each is clear on what they are selling and whom they are selling to. They make it clear to anyone that goes to their websites.
  2. Platform—Each of the vendors has invested heavily in the platform they use to create a modern and exceptionally convenient customer experience.

However, they all lack one of the most important competencies: Building relationships. Firms that are well positioned to compete most effectively are those that excel in all three areas—clarity, platform and relationship building.

A firm that depends only on relationships, ignoring the value of clarity and platform, will lose out to the tech vendors. For example, a long-time friend of mine who owned a third-generation shoe store here in Bloomington closed the doors last December based on plummeting sales—largely due to competition from online retailers. He maintained strong customer relationships and clarity, but lacked the digital platform necessary to compete.

Digging deep during summer events

As we get ready for our summer Firm Retreats, please know that we are working harder than ever to deliver what we call our Performance Platform—developed to empower small and medium-sized accounting firms on delivering a modern, unparalleled client experience. During Firm Retreats, we will demonstrate what a modern sales experience looks like. We will show you how a prospect moves from the firm’s website (via the prospect request form), flows into Client View for evaluation and nurturing, and finally, creation of an aesthetically beautiful and engaging sales proposal and digital client signature capture.

In addition to platform discussions, we will also share new client education materials (business advisory and much more)—all created to enhance your firm’s client experience and help you thrive in the age of disruption. I am confident that our materials are unparalleled in the profession, and that you will love what you see!

Each of the accounting-space tech vendors mentioned at the start of this article is experiencing significant growth. Demand is growing rapidly for an online modern experience. To provide this to your clients, firms must have clarity on those they want to deliver to, what they are delivering and how they will deliver it. Firms have grown their businesses from day one based on relationships. We know how to do this, and it puts us all in a good position to feed tech vendors their lunch when it comes to supporting clients with a fantastic experience. What we need to work on is how to meet the demands of an ever growing tech-savvy world with platforms that deliver the highest quality experience.

As I see it, firms can go the way of Yellow Cab, or they can adjust and compete with clarity, platform and relationship building. If you haven’t registered for one of our summer events, make sure to take the time to do so. I know tax season was tough this year, but now is not the time to let up.

All my best,

Is a retreat in your firm’s future?

 By Amy, Education Team

From the entire education team, congratulations for finishing another busy season! We hope that you were able to take some time to relax after the deadline and that you are now ready to recharge and tackle the rest of the year. Many of you are planning software or process changes, changes in staff, and trips to visit us in Indianapolis this summer. Some of you may be planning, or at least thinking about, a firm retreat. If you aren’t thinking about a firm retreat, there are some great reasons to consider one as well as some key considerations to make it successful! There are also some really good reasons to consider NOT doing a firm retreat.  

Let’s start with the reasons why. A retreat can actually help boost productivity! It allows the entire team to regroup and rediscover the passion they have for their work AND keep the business moving forward. Retreats allow you to step outside of the comfort of day-to-day responsibilities, tap into the creativity of all team members and accomplish goals together.

To make your firm retreat successful, I’ve listed a few tips and tricks below:

  • Your retreat should have a clear, significant purpose and end with specific action items.
  • Have a set agenda that encourages active participation. It should be a safe place to contribute.
  • Don’t overpack the agenda; leave room for unexpected things to happen.
  • Let it be as long as it needs to be; one to two days is common.
  • Include an element of team building that is fun and playful.
  • Your retreat should be off site; get yourselves out of the day-to-day zone and away from work.
  • The team should know the agenda and the goals at least a week before the retreat.

When should you NOT consider a firm retreat?

  • If there are strong tensions within the team, these should be handled prior to retreating.
  • If the agenda ends up looking like an extended meeting.
  • If the firm is not in a good position with resources (retreats do not need to be expensive but there are financial and human resource considerations to be made).
  • If there are no special topics or goals that require the team’s attention.
  • If you can’t narrow your focus.

A firm will run smoother, have more staff buy in and feel refreshed after a successful firm retreat. Right after tax season or the early summer months are the ideal time to retreat. Now is a great time to think through your goals for the year and pull a staff member or two into the planning process. This timeline will allow you to tackle action items before the fall deadlines and year end. If you feel stuck, the Rootworks education team can help!

2-factor authentication isn’t failproof

By Chris Dickens, IT

2-factor authentication (2FA) is an essential method for adding an additional layer of protection against unauthorized logins to secure information and systems, such as email, client portals and other places where sensitive data is stored. However, it is not failproof and should not give you a false sense of security. 2FA can be bypassed using very sophisticated phishing attempts.

Here’s an example of how 2FA has been bypassed by nefarious actors, specifically targeting Gmail accounts that have 2FA enabled.

Hacker sends a phishing link to victim that presents a “security alert” stating that an account was potentially compromised, and recommends changing a password immediately. Email provides malicious links to what appears to be the Google sign-in page.

Victim enters their current password on this fake site. From there, several things happen:

  1. Hacker’s site captures the email and password combo for its own use.
  2. Hacker’s site sends those authentication credentials to Gmail, prompting Gmail to send a 2FA code to the victim.

The hacker’s site then presents a page asking for the 2FA code that was sent.

The victim, still believing it is interacting with Gmail, enters the code on the hacker’s fake login page.  The hacker now has the email, password and 2FA code for the victim. Within seconds, the hacker is logged into the Gmail account.

To prevent falling victim to this type of exploit, user awareness and training is essential. There’s only one way to avoid falling victim to this scam, and that is to never click on any link in an email where you are being asked to update a password, or act on a security alert. Always delete the email, and instead browse directly to the site in your web browser.

Take good care of your clients!

By Chris, Marketing Team

The easiest way to grow firm revenue is to increase your engagements with existing clients—and that means keeping them happy. Now that tax season is behind us, take some time to evaluate the client experience you’re delivering. Look for any gaps in client care and areas that could be enhanced…and then work to implement improvements. Remember, a happy client is a loyal client—and this offers great opportunity for up-selling value-added products and services.

We’ve got a lot planned for May. Make sure to tune in to as many sessions as you can to stay up to date on new things and help to plan out initiatives for the summer.

Upcoming Webinars

  • May 7: Rootworks GPA Webinar. May is GPA month. Use the GPA as part of a Firm Retreat or discussion to get everyone thinking about the same things. Use the results of the GPA to drive discussion and help to identify initiatives to work on at the firm.
  • May 8: Staff Training: Creating Worthwhile Client Surveys. Are you interested in surveying your clients to see what they think about your firm? Your services? Other things? In this class, we’ll cover basic concepts to consider when creating a survey. The goal of the class is to give you the know-how to create a survey that clients will take that yields feedback that your firm can use.
  • May 9: Rootworks Client View Webinar. We’ll cover the purpose and functionality of Client View. Client View’s ultimate goal is to give the firm better visibility into the services they provide to customers and the solutions they use to serve customers.
  • May 15: Staff Training: Document Management. Is your firm considering alternatives to your current document management or document storage solution? If yes, this class is for you. We will discuss document management/storage solutions available (including Box.com, Dropbox, Google Drive, OneDrive/Sharepoint, Onvio Document), considerations for migrating and ideal workflows.
  • May 16: Spring Cybersecurity Webinar. We will cover the latest phishing and exploitation techniques. We will also look at how to check your user accounts and passwords for potential compromise. Finally, we’ll discuss incident response plans as part of your larger security policies.
  • May 23: Spring Planning Webinar. Planning webinars are time spent working on your business. Use each session as a checkpoint throughout the year. Take time away from day-to-day work to celebrate accomplishments, think through projects and issues, and plan out your future objectives. Use the next Planning workshop as your deadline to create a sense of accountability.
  • May 29: Staff Training: Using Liscio in Your Firm. This class will discuss the use of Liscio in your firm. We will address implementation strategies, useful tips and tricks, and workflow considerations.

Finally, on June 6, we’ll do our Spring Technology Webinar. We’ll cover four different sales proposal programs we’ve vetted as well as an update on Thomson Reuters’ Onvio platform. This will be a 90-minute webinar.

Register at Rootworks.com under Learn > Events.

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