The Wize Guys

Episode 30: Client Portfolios: How to Allocate Clients to Teams Effectively

October 20, 2022 Wize Mentoring for Accountants and Bookkeepers Season 1 Episode 30
The Wize Guys
Episode 30: Client Portfolios: How to Allocate Clients to Teams Effectively
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Episode 30: Client Portfolios: How to Allocate Clients to Teams Effectively

DESIGN - business planning, systems, processes, production, tech

In this episode of The Wize Guys Podcast, Ed Chan and Jami Johns with the Wize Mentors, Timothy Causbrook and Thomas Sphabmixay tackled client portfolios and how to allocate clients to teams effectively. This is important because it helps keep your staff balanced so they know what needs to be done day-to-day!

Discover how you can allocate clients among teams effectively in order not to overwhelm any given person or group with too many tasks at once.

Timestamps:

1:28 - The importance of building client portfolios
3:10 - Hiring tips: junior client manager vs senior client manager
4:52 - The roles of client managers within the traffic flows
12:14 - How to match accounting managers to clients
13:31 - The rule of thumb when it comes to identifying fees
15:28 - Why communication skills are critical in recruitment
17:11 - Who is more busy: accountants or bookkeepers
20:58 - The common challenges in structuring the client portfolios
26:37 - When is the ideal time to hire a senior production manager
31:49 - Tips and tools for managing client portfolios
38:23 - Defining what client-facing is
41:24 - Why capacity planning is essential to allocate time for A-D clients
44:53 - Key takeaways

Quotations:

“You get the right people in the right seat, the right capacity, and also the right resource mix .” - Ed Chan

“...owners tend to be client managers by nature.” - Tim Causbrook

“It's very important that whoever you choose as the client manager is a people person and can relate to different people. I think it always says you can't change elected spots, you're either born the right way or not.” - Jamie Johns 

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Download the full transcript here.

Episode 30: Client Portfolios: How to Allocate Clients to Teams Effectively

Tim Causbrook: We're looking at design today. You can see that that's the phase we're looking at today. We're looking at building teams and we're looking at one of the most important positions in the team. 

So the topic today is how to allocate client portfolios to teams effectively and how to allocate clients to the teams. And in particular, we're looking at the client manager part of the client portfolio. So I guess just to start us off, Ed, can you explain to us why it's important to think about client portfolios to teams and why the client manager is integral to making those allocations correctly? And why do we even need client managers in the first place? 

Ed Chan: Sure. 

Tim Causbrook: Broad, just introductory to the topic in case people haven't thought about this before, or they're not sure what those terms mean.

Ed Chan: Okay. Thanks, Tim. 

I guess I'll start with, if you are small and if you're only just starting and you are building your clientele and you've gotta get the workout. So at that point, you've gotta start hiring people to help out. All right? So the clients will get referred to you or you might be advertising for them. So they all come to you and they come from all different industries and different personalities and so forth. And because you've started your own business, you take them all on, and then you try to get the work out the door. 

Generally what happens is that depending on your size, you'll have to either hire someone that's experienced or hire somebody less experienced, which will cost less. But then as you grow, you've gotta decide what kind of person to bring on cuz it's not just what I call throwing a body at the, at the problem and hiring more and more people and just throwing more bodies at the, at the workload and that doesn't work and it will end up costing you a lot of money and you won't be very profitable. And it gets very clunky if you're not a lot more scientific if you're not approaching it a lot more scientific, than just hiring somebody. So obviously when you are really small, you have to choose to hire someone junior or a more senior person. I would go with a more senior person. And I know you're looking at the dollars. But in, if you invest in a more senior person, then it can take the workload off you. So you're not dragged into having to train a junior. And initially, it would be okay, but how do I afford this? But as soon as you create capacity, that gets filled up again. So your production capacity gets filled up with new clients coming through and that's happened for me as I was growing mine. So as soon as I create a capacity, I got more new clients in and then I hire somebody else to create more capacity, and then more new clients came in. And financially, you might have to take a step sideways or a step back to step three or four steps forward.

So it's a few steps if you like. And because of that, that senior person, that experienced person that you hire would then train the next person. You might be able to hire a less junior person and the next person that you hire and that senior person or experienced person that you've hired, then trains the junior one and so forth. But if you're looking at the first employee and you hire a junior, then you've gotta train that person as well as trying to deal with all the work that's coming through at the door. 

Now, as you get larger and it becomes more sophisticated. You can see that you then have to recruit a senior client manager.

You gotta start getting a lot more scientific and start managing traffic flow because there are two types of traffic flow: production traffic flow and communication traffic.

You've got production traffic. You've gotta hire people to suit the traffic and production. Traffic is easy to understand. The work needs to get done, whether it's bookkeeping or accounting or whatever it is it needs to get done. So you've gotta hire people to do that work. And then there's communication traffic, which is communicating with the clients, doing their tax planning, taking their calls, answering their emails, having meetings, and doing the tax planning meetings with them. So that requires a different type of person that has the skill in being able to communicate with the clients. 

Now, I'm not just talking about talking to the clients, I'm talking about being able to relate to them and communicate with them at a higher level. So the kind of person that can suit that role is, for example, you've, you've prepared a draft set of accounts. It's the client's made a hundred grand profit. You've now worked out that he's got a $30,000 tax bill. The client says to you, ‘There's no way in the world. I could have made a hundred grand. There's no money in the bank. How am I supposed to have made a hundred grand?’ So the person that sits in that seat needs to be explained to the client so that the client can understand where he's a hundred thousand dollars had gone, right? So that's not the same as the person who asks questions around, ‘You're missing a bank statement. Can you send me bank statement 42?’ So it's a different person that handles communication as to production. 

So they're the two types of traffic that come through the door. And, and then as you can see on the left-hand side is traffic complex complexity. So you can see there's low-level traffic and there's high-level traffic. Then, we break them up into A and B class clients and C and D class clients. The C and D class clients are generally handled by an assistant client manager. The assistant client manager is not as experienced as the senior client manager. So he or she handles the communication with the C and D class clients. And they're in training. I guess if you like to become a senior client manager. It’s not the same as the top right-hand person, which is the senior production manager, because the senior production manager is much more senior than the assistant client manager. 

However, as far as they can go, they don't have the communication skills to become a client manager. They can do the work. They can check the work, they can push the work down to the accountants and bookkeepers, or I call them down to the grinders to get it done. And they can manage the team and check the work and review the work. But they don't have the interpersonal skills to progress to a senior client manager or an assistant client manager. Although they've got a lot more experience than the assistant client manager. The assistant client manager has the potential because they've got the potential to have good communication skills. So they need to be trained up in the way they communicate with the clients. You start them off with C and D class clients, but they also gotta do the work because they're not experienced enough. So the senior production manager helps train them in doing the work because to be able to sell the sizzle, you would've had to have been to a few sausages in your time. So know how to sell the sizzle. And the senior production manager is helping them with a lot of their production. 

Then the assistant client manager is still fairly hands-on, but they handle the C and D class clients, for example, iReturns. So they take on the iReturns. They either do it themselves, or they push the iReturns to a production person in the bottom right-hand corner, where you can see the blue triangle, which has got an accountant bookkeeper. And that could be someone in overseas at lower costs. So you can push the work down to them, get the work done, or it could be someone less experienced, but in training. The work gets done, and comes back to the assistant client manager, assistant client manager finishes the iReturns off and then causes the client. So that's the two people working together to service an individual return. The reason why an individual return doesn't go up to the senior production manager is that you don't want too many hands touching that job because it is a low-cost product. Otherwise, if you have too many people touching that job, the profits will disappear from it. So the best way for C and D class clients is to assist client managers to manage someone either in their team or overseas at a lower cost to get the work done. And they do all the communication with the clients. So you are investing in your balance sheet by training people up and bringing them through.

Now that leaves the senior client manager with the communication with the A and B class clients. So they then need to work very closely with the senior production manager, which is the one in the top right-hand corner. Together, they work in a team. So the senior production manager, just gets the work done, reviews it, and pushes the work down to their accountants to get the work done, dots the eyes across the Ts, and hands it to the senior client manager who's communicating with the clients. He/she goes and calls a client up, either has a meeting through a face-to-face or a Zoom meeting with them and explains the results to them. In order to build this team, you've gotta hire the right people with the right skills. And you've also got to match them up with the clientele. So you gotta match the personality of the client with the personality of the senior client manager. Sometimes, if you don't get the matching right, then you could lose a client. So it's very important that you get the personalities right that suits the client. And often I'll say to the client, ‘Look, we've got three teams here. We've got three senior client managers here. And if you're not getting along with someone, let me know. They just leave, and we can try somebody else.’ So I, I say that to them right up front in all our communication. We also say that to them. So that's the gist of how it runs. 

Tim Causbrook: That's really great. Thanks. 

So that's hope that clears up a lot of things for, for people who are still kind of getting to grips with the terminology and the mechanics of the deeper narrow team, it is the key to production. So it is really, it is really important to get this right in your own firms. And it's not necessarily easy in terms of getting people in those roles, but it's really worth persevering with. But thanks very much for that, Ed.

Is it common for one team leader to have the role of client manager and production manager?

Jamie, maybe you just wanna jump in here and then, and then I'll get some feedback from Ed as well on this one. 

Jamie Johns: Look, it just depends on the size of your firm or that team in terms of fees. So the size of your fees will determine how many clients you've got across as well. But yeah, absolutely Tim, often the assistant client manager is also the senior production manager. So if your level of fees is, for example, you know, 500,000 or 600,000, then that person can wear two hats.

Then as the fees grow and as your clients grow, you go back to your capacity plan and you revisit that and you may need to hire the next person. But normally the first barrier as a rule of farmers around 600,000, and then, the next challenge becomes going to a million dollars per team. So yeah, definitely it was no different from the early days when I started, I used to wear all the hats and everyone watching probably relates to that. You tend to do everything in the early days, but then the key is to know when to hire and you've gotta be really strategic about your hiring. All the mistakes I'd made in the past were I didn't give enough focus and effort and, and wisdom in hiring the right people and then putting them in the right position. 

So at Sky Accountants, we have four senior client managers and we have four assistant client managers. In one of the teams, the assistant client manager is also the senior production manager purely because of the size of the team. And that person wears two hats, but their future career path. I spoke to him yesterday about that senior client manager role, but as we discussed, they're ready when they're ready. There's not an exact science, they've gotta have enough confidence and enough clients that they're managing when they graduate to the senior client manager. And they have to be particular personalities as well, Tim.

Tim Causbrook: That's really helpful. I mean, hope that makes sense to me. I hope that clears up your question or I hope that answers your question.

Ed Chan: Tim. I just wanted to add something to that. 

Tim Causbrook: Yeah. Go for it. 

Ed Chan: Often when the team is, the fees are small, like 600 grand is Jamie, you said, and you've got someone that holds both the senior production manager role and the assistant client manager role. Then as the fees grow and you've gotta then separate those two roles, it's better if that person has some communication ability it's better to push them into the assistant client manager role and replace them with the senior production manager. The reason for that is there are a lot more senior production managers around to hire than there are people that got inter-interpersonal communication skills. So if someone's holding both roles at the moment and they've, and they're doing the communication quite well, then move them into the assistant client manager on eventually to the senior client manager role and go and hire a senior production role because there's a lot more to recruit from, with the production side of things as there are a lot fewer people who've got the interpersonal school and skills.

Tim Causbrook: Yeah. That makes plenty of sense. Thanks. 

Do bookkeeping firms need client managers as such or production managers? And I'd love to hear your answer on that, Jamie cause we are getting that question from a couple of bookkeeping firms recently. 

Jamie Johns: So whether you're an accounting firm that does bookkeeping as well, or whether you're a bookkeeping firm that offers advisory work as well. So this team plays, these positions are exactly what you need, Tim. 

Both industries obviously have their differences, but there's a lot in common as well. Bookkeepers will get just as busy as well as tax accountants. 

Tim Causbrook: Yeah. Okay. Jackie turnover is what Jackie meant. I think it is roughly the same. The figures are the same for bookkeeping versus accounting from what I've seen. I mean, I know in Ed and Jamie's firms, the bookkeeping is tucked into these deeper narrow teams. It's a part of it. As you can see on the quadrant it's accountant slash bookkeeper down the bottom right there. So the bookkeeping fees are part of the team. 

Jamie Johns: Yeah. Just add that Tim, you've gotta be guided by your capacity planner. We work with lots of different bookkeepers now and some bookkeepers charge a lot more than you think. So, you know, the first thing that you'll have a distinction between tax advisory firms is maybe the charge-out rates or the cost per hour from the client's point of view versus a bookkeeping firm. In saying that you do get quite a bit of variation. But in saying that, some bookkeepers charge out rates that are pretty competitive and not particularly low. So, you just need to come back to your capacity plan because it's very hard to say that one size fits all. You've gotta be guided by a capacity plan and then that will help you determine the number of people and the fees you've got and that sort of thing. 

Ed Chan: Yeah. That's great. A hundred percent agree with that. 

The principles that are the same, the dollar values are different because the charge-out rates between an accounting firm and a bookkeeping firm are different. So the turnover per team is different. But as Jamie said, if you go back to the capacity planner, because if you're charging $80 an hour and the accounting firm is charging $350 an hour, you can see that the capacity for each team is different principles are the same. 

Tim Causbrook: That makes, sense to me. Yeah. 

I think we've got a bit of time, so I kind of wanna get a little bit deeper into the senior client manager and assistant client manager difference here and some of the challenges with that. It is pretty applicable. If you're a small one-team firm, you'd still be looking to expand and you'd still be looking to hire at least an assistant client manager. And if you're in a bigger firm, you're definitely gonna be looking at assistant client managers. What are some of the challenges that Ed and Jamie both I'd like to hear both of you on this one. What are some of the challenges that you've faced with carving out a client portfolio for the client manager, for instance, I'm going through this process myself in my own firm. I sometimes see a reluctance on part of the client manager to let go of fees, even though it's staying in the same base. So I'm curious if you guys have experienced that yourself within the team, how important is buy-in from the senior client manager? And another question I kind of have is did the senior client management and assistant client manager, do they work closely together? Is there any training in that way as well? We looked at how they relate to the production manager. 

What are the challenges with carving out an assistant client manager role in the team? And what's the relationship between the two client managers?

Jamie Johns: Perhaps I go first and then Ed, even Thomas.

Some of the things I come across is while you can have that team structure and you can go to work and carve out client portfolios for the client managers just as important is making sure you understand the no bypass policy. So you can have everything in place. But if you bypass the owner of the firm, if you bypass the client managers, either with the clients or with the team members of the client managers, then you just undermine the whole process. So you gotta have a lot of self-discipline and you've gotta be on solid ground that if there is a client complaint or if there is a team member that's not particularly happy, you've gotta take the client managers on the journey with you. And so if you haven't looked at the no bypass policy, you really make sure that you need to understand that.

So you can often ask questions of the clients or the team members, but you can't instruct either party without bringing the client manager back into the loop. Because if you don't do that, you're just gonna undermine the whole process. And you'll undermine this team design that you're looking at. And again, I'm talking with firm owners all the time, trying to help them get accountability and get the information flowing right to the right person. That's just one of the practical things that I see Tim, that can help people.

Tim Causbrook: That's great. 

Ed, have you got anything you wanna add? 

Ed Chan: Yeah, just a couple of things to just add to what Jamie says. Often owners say to me, ‘I wish my staff would take more accountability and be more responsible for their job and their portfolio.’ Then I see them undermining them and I say, ‘Well, they will, if you stop undermining them,’ and they say to me, ‘No, I'm not undermining. What do you mean? I'm not undermining them.’ and they're undermining them because they're bypassing them.

They'll get a job from a client. They'll bypass the senior client manager and they'll go down to the accountant, one of their staff. And they'll give that job to that accountant and say, ‘Look, I need this done quickly, Jack. The client needs it done in two days.’ So you just bypass the senior client manager.

Now you've asked a senior client manager to take responsibility for the staff and the clients. And then you go and undermine them by bypassing them. So eventually that senior client, manager's gonna say, ‘Well, if you wanna manage the staff, you manage them then,’ and they'll sit back and then you'll have a paid audience around you. And that's not the fault of the client manager. It's your fault for undermining them. And most people don't know that they're doing this and they do it. They're doing it inadvertently without knowing and that's just one of the biggest sins that do. 

Also, part of the problem is that we've all grown up in production. We've all done the work and then all of a sudden, we've now moved into a management position and we don’t know how to manage. We know how to do the work and we just want it done quickly. So, you just do whatever you think will get it done quickly. So I'll just bypass the manager, and go down to this person. Who's sitting there and I'll just, you know, bypass them? You think that you're just doing the right thing by getting the things done, but you actually undermine the whole team and the whole spirit of what's going on. 

So the biggest problem that occurs, the other big problem I see here is that a senior client manager wants to sit there and do the grinding. There are two reasons for this. One is that they enjoy doing the grinding, but at their pay rate, you can't afford for them to sit there and do bookkeeping work or accounting work when they're paid at a consultancy level. And the other reason that they often sit there and do the work is that there are not enough people underneath them to get the work done, or there are no competent people underneath them or the resource mix underneath them is not correct. And then it all ends up on their desk. So if you don't get the right senior production manager in there, then the worker ends up with the senior client manager's desk to review and finish off. And the more they're tied to doing that, the less they're seeing your clients and communicating with them. You won't get any referrals if you just sit there and do the work. So it's really important. You get the right people in the right seat, the right capacity, and also the right resource mix working with the senior client manager. 

Tim Causbrook: That's really helpful. Ed and Jamie, thanks for that. 

I just got a question from Craig, just then he's asking in a firm of around 800k  in fees that do not currently have a senior production manager, would you have the senior client manager and assistant client manager sharing the senior production manager role? 

Jamie Johns: Yeah. If you had 800,000 in fees, Craig, it would sort of depending on the people that you've got on the seats. But particularly at that level, you really wanna start looking at what we call the three stable terminals. So, from 600,000 through to a million, you really wanna start looking at having a senior production manager in place. And then not only that, if you're adding fees and growing whether it's 10% or 15% a year, you certainly wanna be looking at assistant client manager as well. So once you start heading from the sort of six, 700,000 up towards a million, you definitely want to have the three stable terminals, like your senior client manager assistant and your senior production manager. 

Now that's just gonna depend on which one you go for first, in terms of that journey. It's just gonna depend on who you've currently got and what personality traits they are. Some people are more inclined to be senior production managers if they don't have those interpersonal skills. But if you've got someone on the team and always talk about the course of least resistance, if you've got someone who's got the interpersonal skills, then, by all means, I think as Ed said earlier, earmark them for the assistant client manager because those people with the inter good interpersonal skills or emotional intelligence often are harder to find as a rule of thumb than a senior production manager or people. Account bookkeepers tend to be quite technical people. 

So if you have got someone in your team, who's got really good interpersonal skills and likes dealing with people, as they say, they're a people person then earmark them for assistant client manager. But certainly through at those fee levels, you'd really be looking at getting a senior production manager in place. And I know when I was at that level, I got a senior production manager at that place. It really helped me grow further because it freed up my time. I was getting the jobs on my desk, 90-95% done. That was fantastic. And then, you know, when I was about 700,000, it helped me get to a million, a lot easier with the senior production manager in place. Otherwise, Tim, I was like ended up reviewing everything. 

Tim Causbrook: Yeah, exactly. 

Ed Chan: I can't emphasize that enough at 800 grand, you need a senior production manager. Otherwise, the senior client manager's doing grinding work and production work. If he or she's doing grind work and she's not seeing clients that portfolio won't grow. You're just doing the work and churning and just treading water. If you want that portfolio to grow, you've gotta bring in a senior production manager and the senior production manager will take the pressure off the senior client manager to go three clients. I can't emphasize that enough at that level. 

And Tim, you, yourself personally experienced what a huge difference the senior production manager made. The correct senior production manager when you had the wrong senior production manager in there and it made disaster. 

Tim Causbrook: Yeah. I was gonna say that, Ed. Thanks. Thanks for bringing that up. 

Because I was gonna say that. So my dad is the chief equity holder in the firm that I manage and it took a lot of convincing for him. Because we had a wide and shallow team structure prior to meeting Ed and Jamie. Every single employee was client-facing. Sorry, there's a vacuum clear in the hallway. And it took a lot of convincing for him, for me to say, ‘Hey, let's find some production managers that won't be client-facing, and it is an investment.’ It's a different way of looking at it. And when you have a wide shallow in everyone's client-facing, it seems like a lot of money to put towards people who aren't client-facing. In my experience, we could not meet our targets or exceed our targets without legitimate production managers in those roles. And all the other accountants on each team were not as productive. So to me, apart from the client manager, it's the most important role on the team. And I can't emphasize enough that it is worth the investment and that people who aren't client-facing can be extremely valuable to the business.

I really wanna ask Jamie about the topic of allocation for client managers. Jamie, I know at Sky Accountants you showed me a couple of times when it's awesome. but I know you've invested a lot of resources and time in building out your systems and software. Do you have any tips on the tools and software that you've used to manage client portfolios, especially when you are splitting them up between client managers and assistant client managers, and how do these help you direct the traffic flow through the practice?

Jamie Johns: Yeah. Thanks, Tim. 

I think to look at a really basic level. When you go to you are moving towards building these teams and particularly developing a portfolio of clients for your senior client manager and your assistant client manager, you don't just wanna talk about it. So what I mean by that is you need to get the key people involved and have meetings at a real basic level. List all the clients. So I know at Sky Accountants, for example, we'll just have a spreadsheet, list all the clients and all their fees for the most recent financial year and add up those fees and that's the portfolio. So just be very specific and direct. That way you can put it in your system. So whether it's handy soft, Zero Practice Manager, or whatever software you use, then you can update the database there. And they're all the systems are a little bit different, but they definitely have fields for you to put who the account manager is. They might have different names, but you've gotta go into your system. For example, in Video 5.3 in the vault, there are just some screenshots of how to put the client manager's name attached to that particular client. So the thing is Tim, it's very basic. You wanna list all the clients and list their fees. And then, that client manager then has got a portfolio of clients and everyone knows which client manager is allocated to which client. So you've really gotta get down to the details so that no one's guessing what's going on. So that's yeah, that's, that's what you have to do. So it's at a basic level list, the client manager, which client manager's allocated to which client. If you do that on most systems, you can work out what that fee base is then in terms of a portfolio of clients. So, that's one of the absolute, basic things that you would do on this, on this part of this journey on this step.

Tim Causbrook: Yeah. That's great. Thanks for that. 

It seems really simple. A lot of the stuff is simple, but I guess it's all in execution that takes leadership. It's simple when you know what to do. Finding out what to do was very hard before I met you guys and, and the whole system.

Would you say that the directors should hold onto the A and B clients and as such remain in the senior client managing role by directors?’ 

I'm assuming Melinda, you mean the equity holders, the owners of the business? Could you give us a bit of your experience with this in your own business, Michael?

Michael Ferris: Yeah, for sure. 

So, I mean, that's me at the moment, I'm the senior client manager and the CEO. So currently growing my firm to get myself out of the senior client manager role. So certainly the answer is yes, the senior client manager should handle the A and B. And that could well be the director depending on the size of the firm. 

But again, you really need to come back to the capacity planner and have a look at your whole team structure. Look at the total fees for the team. Have a look at what total fee is represented by the A and B class clients. Can one person handle all of those or does a couple of the lower level BS need to go down to the assistant client manager to manage? 

So it's not an exact science, my friend Ed and Jamie would say. But yeah, certainly lean on some of the Wize tools, the capacity planner, look at an ideal team structure, consider your firm, and see whether you are just a director as in like a CEO or whether you are still holding some client-facing roles or some client management roles.

Tim Causbrook: Yeah, thanks for Mick. 

I think, I mean, everyone's replaceable ultimately, but then owners tend to be client managers by nature. That's how they grew the business. I think I've seen this with my own dad. If you are the owner and you started the business, it's very hard to see yourself as being replaceable in terms of the client manager position, not the owner position, and Ed and Jamie have done it. 

Ed and Jamie wouldn't be here today if they hadn't done it. So I think it is very possible. It just, I think because of that, you're so close to it. It might be a little bit harder to, to kind of see it. You probably think you have to replace someone with someone who's just like you. I don't know if anyone has anything to say about that, but that's just not really necessarily true. 

There are great client managers out there who aren't entrepreneurial, and who aren't going to start up their own firms but still really enjoy talking to clients face to face. Is that right?

Ed Chan: Absolutely. 

You want the senior client managers to be entrepreneurial and not intrapreneurial. The entrepreneurial like you, would take your clients and leave and start their own business. So you want them to be entrepreneurial. So entrepreneurial is someone that wants to work in a team, wanna work for somebody else. They don't wanna work for themselves. They're great senior client managers. They're fantastic. 

Again, depending on how big you are or how small you are, if you are smaller, you get them to do 80% of it and you are still around. You do the last 20%, which is pop-in on the meetings, take them out to lunch, do the PR stuff, or talk to them about the big strategy things. But the traffic goes to the senior client manager first, and then they bring you in for the last 20%. Whereas a lot of firms, the owner takes all the traffic first and delegates the work down to their team. ‘Do it like that.’ You won't be able to grow. So if you get that senior client manager, you want the traffic going to them first, and then they bring you in for the last 20%, which is at the higher level. And that's how you make use of the resources that you have. You use the 80-20 rule. 

Tim Causbrook: That's really great. Thanks! 

Thomas, you had such a good answer in the chat there to Greg's question. I was wondering if you could just share that with the whole team and maybe elaborate that on a little bit. Greg was asking about it, he pulled me up on something. He said, ‘can you define client facing?’ 

I tend to use that term broadly to mean the client managers, but it is true that production managers would also talk to clients. Thom, you had a really good answer to that. Could you just elaborate on that for us now? 

Thomas Sphabmixay: Yeah sure. 

Tim Causbrook: What parts of client-facing for the production manager versus the client managers? Yeah. 

Thomas Sphabmixay: So in that team unit with the senior client manager, assistant client manager and senior production manager, and the accountants, or working as a unit to service this client base. We are talking about the communication traffic, it doesn't mean that only the client manager is allowed to email or phone call or follow up with a client about particular matters. It's just how we would classify that particular email or phone call. So if you have missing information or query and these are queries related to getting the job done. The senior production manager, it's allowed for them to go get in contact with these clients, and get the job done. But for matters such as the client approval meeting, and advising the client of the ongoing relationship, these are client manager types of calling and phone calls and meetings. So it doesn't mean that all of that is resting on the client manager. Now it's you working as a team. 

And in some cases, such as in Jamie's firm, you would have say a bookkeeper assigned to work for a particular client on a large payroll job. The bookkeeper may be getting in contact with that particular client to request certain information and there's an ongoing correspondence there to collect that information, to get the job done. This is acceptable. So it just means that the accountant can't go and just start presenting proposals to your clients.

Tim Causbrook: Yep. That's good. Thanks that Thomas that's really helpful.

Malcolm Harris just asked where in the vault, can he find a video regarding how much fees, different positions are able to control. I guess, breaking that up into two things. One is the capacity planner. I think Jamie and Ed, you can jump in or anyone else. 

But the capacity planner will tell you based on charge out rate, and productive productivity hours available in the week, and it will tell you how much fees they'll directly be able to control. But I guess the broader question I'd like to ask, I'll just go to Ed on this one is. ‘if you had 800 K in fees like we had mentioned earlier today, would you be splitting 400 to the senior client manager and 400 to the assistant? Or if you did a client allocation and figured out what the categories are? If you only had 200 in C and D and 600 in A and B, how would you look at that one? What would be the ideal there? 

Ed Chan: Well, you're going flat. If you do that, you're going flat again. So you don't want to go flat. So you want the senior client managers, if they're working there seven and a half hours a day, you want them to spend seven and a half hours on advisory communication emails meetings, their seven and a half hours have to be spent in that category of work. The production manager's seven and a half hours need to be spent on checking the work, pushing the work down to the staff, and training the staff. So their seven and a half hours in a day is in a different area to the senior client manager. 

So the only time when you go a little bit flat is with the individual returns with iReturns where the C and D class clients are. We’re made up of the individual returns that go to the assistant client manager and he or she has an accountant or a bookkeeper to help them get through the work. And only because the product itself is the individual return product. It's a low-value product and you can't have too many hands touching it. Otherwise, all the profits are gone. 

So that's the only exception, but generally, a deep narrow team such as this is broken up into their tasks not handling a certain amount of fees. So the senior client manager should handle up to a million dollars in fees. In that million dollars, the assistant client manager should handle around 300,000 individual returns and low-level kind of stuff. And it could be more than that. 

So it's not an exact science. It just depends on the skill level of each person, how experienced the number of people that support them in terms of capacity. So using the capacity planner is the best way to work on it. I just can't emphasize enough that the mix of who you have in it is really important. So you need someone who's a really good communicator, but you need someone who's very experienced in production to control the quality checking, reviewing, training the staff below them, and being able to manage the people below them. And if you get the right people in those seats, it just hums. It's just very efficient. 

Tim Causbrook: That's really good.

For the technical stuff, we go through qualifications, we do tests and exams, and we get on-the-job training. I've got a hunch that there's not as much client manager training on how to deal with clients. And I've sent this to my own firm over the last decade. 

I've gotta Jamie on this one. ‘How do you go about training up?’ Cause I know you've got a couple of assistant client managers that are pretty new to the team. How do you go about it given that you're great with the systems? How do you go about making sure that these junior assistant client managers that you hire get the adequate selling experience or client-facing experience that is needed for the job in addition to the technical stuff? 

Jamie Johns: Yeah. The short answer is Tim, you've gotta get in the trenches with them. 

So you've just got the train them. So when a new referral or a new lead comes in being in the Zoom call with them being on the, being on the first meeting with them. So whether it's on Zoom or in the office room, they will watch you follow your sales process. So they'll watch you. And then after you've seen you do it, two or three or four or five times, then you get them to do it following the same process. So you should have a sales playbook or a process that you go through and you should document that and then get them to follow that process. And you know, when they're ready to do that, they have to be the right person. Not everyone can sit there and, and hold a conversation and talk to people and, and explain to them what they potentially need. So it might be someone who comes into the office who's looking to be a sole trader. They need to register for JST or whatever it is. 

So an assistant client manager, you need to pick the right type of person. You don't want someone to come in, who's got 15 different entities and are really complex. You've gotta start them where their experience is at and then build them up. What I used to do was after they'd watch me for a while, I'd get them to do the process and then present right down to the presenting proposal. And at the end of each meeting, I would have a debrief. So, once the lead or the client had left, I'd provide some feedback to them and say, ‘You did this really well.’ Or, ‘You didn't do this so well. This is how you can improve.’ That's how they develop their skills. They develop their skills by watching and learning from you. Then you provide constant feedback and have that debrief after the meetings with the clients because that's where you need to develop their skills in that communication and interpersonal skills with the clients. 

I've seen it all. I've seen some people. I've seen chartered accounts with photographic memories come into the meetings and they talk about what's the concession cap and what's not concession and lifetime limits. There was one, I do recall one time I said to the client, ‘Did you understand what such and such said?’ And the client said, ‘No,’ and that was a real wake-up call for this particular person because then they realized that they were just talking way above the client. You can't do that and it always says, you've got real skill. If you can make something that's complex and explain it in simple terms to the clients, that's a real skill to have. You've gotta be able to switch gears. So you might have someone who's like an academic, for example, someone who's comes into the office and they've got a bow tie and they dress like that. And they wanna know the inside out and the nitty gritty. So you've gotta be able to do that, but then you might have their partner who's there. And just doesn't wanna know about that is quite vague. Their body language is quite laid back. So you've gotta be able to switch gears and not everyone can do that. So that's why it's very important that whoever you choose as the client manager is a people person and can relate to different people.  I think it always says you can't change elected spots, you're either born the right way or not. So, yeah. So that's how you train them, Tim. 

Follow that process, get in the trenches with them. And then slowly you can step back once your feet. You've got documented that process and you go from there. 

Tim Causbrook: That's great. 

Ed Chan: You've put the work in. You've gotta micro train them. So you don't have the micromanage them. And you've gotta do that micro training upfront,

But Tim I'd just like to add one before we finish.

Tim Causbrook: YeahGo for it. 

Ed Chan: I've got three coming onto four teams and, and often each team is at full capacity. If you pick up a really new client and you've got, let's say it's $30,000 and you feel that this client is suited to this client manager. I'll call her Jenny, but Jenny's already at full capacity. Whereas Sam, who's another senior client manager. He's still, he's still got some more capacity. So you can then give that new client to Jenny and then take $30,000 of the smaller clients and match them up with Sam, who's the other client manager. So this is a constant thing that happens in my firm. Not only do you have to match them with their personalities, but you also have to match them to their particular industry. 

So Jenny is particularly experienced in GST for developments. So, she's got an inclination towards that particular industry. Sam is a small business, carpenters, that kind of thing. So it's important, as I said, to not only match the personality of the senior client manager with the client but also often the industry group. This just happens like constantly in division four, which is your production. 

Tim Causbrook: That's great. Ed, that's really helpful.

I guess before we finish, is there anything, any like final points, Ed and Jamie from yourselves on the topic? Just some takeaway points.

Ed Chan: I could probably start. Look, it's not an exact science. Okay. So the mistake that people make is that they think it's an exact size. Well, people are not an exact science and there are slight differences constantly. It doesn't fill it. There's no square peg for a square hole. 

So don't, don't get too caught up. You gotta break it into short-term, medium-term, and long-term. So short term is you've got the team that you have and you make do as best you can to fit them into the role. The medium term is you're working on them to get to that ideal situation in the long term. And it may take you a year, two years, five years, or eight years to get to the long-term position, which is what you see in front of you. But don't stress out in the middle, in the short term, and medium term, as you're building this. As long as you have it at the back of your mind, this is where I want to end up as best as we can. And you won't be able to get it a hundred percent. If you can get it to 80%, you're doing extremely well. It's not perfection. We want its momentum. 

Tim Causbrook: Yeah. Great. Thanks for that Ed.

Jamie, anything from you as well?

Jamie Johns: Yeah. The only comment I'd make is it's just about leadership. Again, the biggest barrier I had was myself and just understanding all these sorts of concepts. Both with your clients and with your team members, there are early adopters, middle adopters, and late adopters. I always used to laugh. Ed used to talk about rubber cup clients and crystal glass clients. The rubber cup clients were they would go along with whatever you said. And they were relatively easygoing and loyal and you'll have your own clients like that. So it's important to understand the difference between a rubber cup client and a crystal glass client. So crystal glass clients, you make one tiny change and the world's gonna end. 

So you just need to understand people in that sense. And, you can lead people through the changes that you want to make and come to the other side successfully. 

Tim Causbrook: So, yeah, Thanks very much for that Jamie.



The importance of building client portfolios
Hiring tips: junior client manager vs senior client manager
The roles of client managers within the traffic flows
How to match accounting managers to clients
The rule of thumb when it comes to identifying fees
Why communication skills are critical in recruitment
Who is more busy: accountants or bookkeepers
The common challenges in structuring the client portfolios
When is the ideal time to hire a senior production manager
Tips and tools for managing client portfolios
Defining what client facing is
Why capacity planning is essential to allocate time for A-D clients
Key takeaways