Frequently asked questions
Performance reporting, law firm development, and coaching for tax advisors
Here you will find answers to the most common objections and questions. For a better overview, the answers are initially hidden. Click on a question to see the answer.
Allow us to ask: Do you want it to stay that way? Abraham Lincoln once said, "If I had eight hours to chop down a tree, I would spend six hours sharpening my saw." Or, to take a more practical example from racing: If you don't plan a pit stop, you have no chance of winning. In the end, those who stop 3 or 4 times during the race to "sharpen their saw" come out ahead.
If a training measure brings immediate savings, it will make a lasting contribution to giving you more time at your disposal in the future: to respond better to clients, to develop the firm strategically, to attend specialist seminars without work piling up at the firm, or even as free time to recharge your batteries. It would then be negligent not to make use of such supportive measures.
Do you want it to stay that way? Do what entrepreneurs and entrepreneurial-minded tax advisors do and first consider the value of a measure for your company or firm. Only then can you assess whether the investment—because training costs should be seen as an investment—is actually worthwhile (i.e., the return is greater than the costs). Even the cheapest measure is not worth the money if it does not deliver any measurable added value in practice. ERC AG's fees are based exclusively on value and are calculated individually for each individual firm, i.e., not on the basis of hourly rates. Only after we have jointly determined the achievable added value for your firm can we reliably calculate the fee. In our experience, this means that any law firm willing to change can pay for the investment in a training program solely from the additional cash flow generated by the training itself. Most of our clients couldn't believe this before the program started and were convinced by the results. Fortunately, there are now enough references that impressively confirm this approach.
You are in the same boat as many of your colleagues. Often, it's not that you don't want to do more, but that the work piles up in such a way that you simply can't get any more done. The core of the ERC idea is to enable professionals and managers in particular to decide for themselves what needs to be done, when and how, and not to spend their time being dictated to by deadlines and everyday stress. Our clients are surprised at how much time is already available when the entire law firm team works together in a focused and enthusiastic manner—that's why the initial successes are so convincing, because even the introductory workshop releases an average of approximately 30% productive energy throughout the entire law firm. To enable interested law firms to experience this "breakthrough," we offer a 3-day training workshop on "Leadership & Implementation Strategies" followed by 4 weeks of implementation coaching. This consists of two days of training for managers and a subsequent inspirational seminar for employees, in which your law firm receives the diagnostic tools and implementation instruments to noticeably increase productivity in practice in the weeks following the workshop.
There could be various reasons for this. Was the trainer on the same professional level as you (i.e., did he really understand the requirements of your law firm)? Did he work with you to determine the reality of your law firm (i.e., analyze your specific situation and derive individual implementation measures from this)? Did the trainer succeed in sparking and maintaining enthusiasm among you and your employees (i.e., was it enjoyable for everyone involved and were they all able to make the most of their skills)? Did the trainer accompany you in practice, really put themselves in your shoes, and enable you to deal with all resistance to the change process—both personal and organizational—in the right way (i.e., did they also remove obstacles and constantly challenge and encourage your motivation and concrete results)? Last but not least: How many problem situations relevant to you had your trainer already solved before, and what concrete, measurable results can they demonstrate? In business, it's like in sports: there are only a few real top coaches—who can be recognized by the success of their protégés. Such coaches are never cheap, but they are worth every penny. So be wary if a coach cannot explain in advance what specific results you and your law firm will achieve, and if specific, measurable references are not available.
After renewing their business model, participants in the law firm development program achieve the following results:
- All annual financial statements and tax returns are ready for printing in the first quarter and can be delivered to clients, the tax office, and banks.
- You earn your annual financial statement and tax return fees up to a year earlier and build up a cash reserve.
- The previous pressure to meet deadlines imposed by clients, tax authorities, and banks, and the associated stress, are now a thing of the past.
- As a consultant, you save up to 50% of your working time. You can step back from day-to-day business without feeling guilty and use the extra time for yourself, your employees, and your clients. You can finally devote yourself to your own areas of interest and inclinations in your professional life and expand into new business areas.
- Finally, they can offer their clients significant added value beyond the usual basic services, so that they are enthusiastically recommended—even by banks and tax authorities—and their fees are gladly paid.
- Based on the current and perfect processing and structuring of information, they can tap into new sales potential in future-oriented design consulting and thus qualitative growth potential without additional staff.
In addition, managing the law firm has become easier because an incredible "team spirit" has developed and internal and external communication with clients has improved. Everyone involved has the right information available at any time, anywhere.
You are in the same position as most of our clients before the program begins. Based on the industry's previous worldview and the experiences of recent decades, the effects of our law firm development program seem almost unbelievable. Previous participants are now as convinced as we are that any law firm willing to change can achieve these results just as precisely and easily in practice, regardless of the size of the firm and its organizational structure. To those who find this hard to believe, we say: you don't have to believe it if you know it works. And you can only know that if you experience it in practice on an ongoing basis, as we do. As a result, we now have enough references that prove this to us – and to you – on a daily basis.
The law firms that have completed our KEP law firm development program are actually achieving the results described in practice, i.e., they are working much more profitably—regardless of their initial situation—and without the time pressure and everyday stress typical of the industry. Several of these law firms have won the main prize of the German SME Program under the patronage of Prof. Dr. h.c. Lothar Späth with their renewed business model – as a special award for their performance and innovative strength for SMEs. All our clients benefit directly from the wealth of experience and implementation strength of these pioneering law firms within the framework of "Cooperative Business Coaching." Press releases on some of our pioneering law firms can be found under References.
It is very important to have the courage to confront your own realities. Only when you accept your own situation as it is can you really change something. I recommend a step-by-step approach. First, gather information through publications and internet research, then contact suitable experts, participate in a seminar or workshop to test whether the chemistry is right and a basis of trust can be established, and finally, make a quick decision and implement it. The typical occupational disease of "procrastination" cannot be cured by hesitant waiting, but only by decisive action.
In recent years, we have all tried to optimize the old business model through quality management, continuous improvement processes, strategy, and marketing, and to adapt it to the requirements of the future. However, if, despite increased efforts, you can no longer meet the current demands of the times, you must have the courage to fundamentally question your previous convictions. You have to think outside the box and redefine the way tax advisors earn their money. So we have changed the business model "radically," i.e., going back to its roots, and have been putting this business model into practice since 2008 with firms that are open to change – with amazing results!
The majority of small and medium-sized enterprises have outsourced their finance and accounting to tax advisors. The system of separating financial accounting and annual financial statements has meant that, despite improved IT systems, the profession is finding it increasingly difficult to meet its reporting obligations without requesting extensions. As collateral damage, so to speak, in tax offices and due to inadequate financial accounting and delayed annual financial statements, the information value of the services provided is declining—reliable figures are simply not available in time to enable entrepreneurs to make correct and informed decisions.
Clients need reality in the form of reliable accounting figures at the earliest possible stage in order to be able to manage their companies sensibly. This is not guaranteed by the current approach. That is why our law firm development programs are switching financial accounting to performance reporting. This means that a performance report can be generated every month in the form of a monthly statement with a profit and loss statement, balance sheet, and management report. Not only depreciation, but also inventory changes, value adjustments, accruals, provisions, and liabilities, among other things, are recorded and posted using special tools. Since the monthly financial statements already have the quality of annual financial statements, the December report is virtually identical to the annual financial statements.
The 12 monthly reports are checked according to a three-eyes principle and discussed with the clients. The December report is therefore virtually identical to the annual financial statements. Not only are commercial and tax aspects taken into account—the performance report is primarily used for business management purposes. For this reason, the management report also includes, for example, the order situation and the expected business development, regardless of the legal form. In addition, a monthly needs analysis is carried out so that the client's needs can be responded to at the earliest possible stage.
Yes – resources for additional revenue are even freed up. Just one example (more below): For tax advisors, the monthly performance report acts as a fully automated order acquisition tool, so to speak, because the client's needs are constantly recorded automatically. This alone results in incredible time savings. The time freed up can be used for more intensive client support and for processing additional orders. It goes without saying that increasing the competence of all employees and improving efficiency within the organization are essential for this.
The size of the firm is irrelevant. Firms that have already successfully implemented the new business model include both sole practitioners (one professional with 1-2 employees) and medium-sized firms with several professionals and 30-40 employees. The decisive factor is the client structure: success reporting has the greatest impact (i.e., the greatest added value for the client, and thus also for the firm) when companies have outsourced their finance and accounting to the firm, which is usually the case with small and medium-sized companies. Small and medium-sized law firms in particular also benefit greatly from the competence network of "cooperative business coaching," currently the most innovative and effective coaching method.
First, we need a renewed value proposition: tax advisors should evolve from declarants and "tax avoiders" to "control advisors." This will expand their value proposition to that of business management experts in accounting. As "success reporters and controllers," tax advisors and their employees can ensure that clients are always in touch with reality. This helps them make better business decisions. The quality of management in the client's company improves significantly as a result. Banks are pleased to note this. However, this requires that the right information be available at the earliest possible stage. In a second stage, the new value proposition can be expanded to include holistic business coaching.
The expanded value proposition naturally requires restructuring, expansion, and optimization of the tax firm's existing value creation architecture. The organization, particularly the management processes, i.e., support and leadership processes, must be adapted and aligned with the new design of the value-creating service processes. In such comprehensive change processes, we work with the full involvement of the employees to increase the competence, productivity, and competitiveness of the firm. The almost inevitable result is a sharp and sustainable increase in economic success and, at the same time, an improved quality of life for all involved.
The increased appeal is reflected in a sharp rise in the number of recommendations from clients and banks. In the mindset of the old system, this sounds almost unbelievable. At first, employees find it difficult to imagine. It takes a lot of loving consistency in implementation coaching to break down the mental and emotional barriers in order to implement these extremely effective methods. The productivity gains are then enormous. There is no other way to describe it when, after one to two years at the latest, law firms manage to complete all of the previous year's financial statements in the first quarter of the following year (not in the so-called second following year). The previous annual financial statement clerks are now more evenly utilized thanks to their monthly participation in the success reports and are also much more efficient, as the necessary documents and receipts are available on a monthly basis together with the accounting department in a timely and complete manner – the interruptions, duplication of work, and other sources of error that were common in the past are no longer an issue. All employees and managers consistently report greater job satisfaction and enjoyment of life, as well as an improved quality of life.
As a business coach, the consultant not only takes care of financial management and performance measurement, but also the fitness of the client company. Only in the leisure and amateur sectors can you still get by without professional trainers and coaches. Anyone who wants to deliver top performance as a professional is always looking for the best support they can get. In my experience, however, you cannot acquire the necessary qualifications through theoretical training, but only through your own practical experience of change processes that you have personally undergone to improve the performance of your law firm.
At the outset, this can only be done reliably in cooperation with a professional training company that has the necessary experience with medium-sized clients. This is the only way to offer clients a program for increasing competence, improving efficiency, enhancing attractiveness and profitability, and securing liquidity. The process is similar to the development program for law firms based on the cooperative business coaching method—a combination of training workshops and implementation coaching with a group of companies. The law firm's designated competence team assists the trainers in the workshops (sometimes in Mallorca in our case) and supports its clients on site at home. Under the guidance of the trainer team, practical coaching skills are continuously developed. In this way, the law firm becomes increasingly valuable to its clients and benefits from the growing success of its clients. Every entrepreneur dreams of a consultant who not only helps them fulfill their tedious legal obligations, but also actively supports them in pursuing their business goals. Through success reporting, we have expanded the role of the tax advisor to that of a profit management consultant. Through business coaching, we become profit growth strategists, so to speak. The cooperative approach creates networks that can become essential for survival in times of crisis. Times of crisis are always a great opportunity to reinvent yourself and be at the forefront when the rules of the game in an industry are changed under pressure from circumstances. It is a great fortune to be among the first to take this path, which, incidentally, is completely in line with the new mission statement of the Federal Chamber of Tax Advisors.
What makes the "Cooperative Business Coaching" model so special is its unique combination of training workshops and implementation coaching. Participants from several companies or law firms form performance communities and support each other in their individual projects. This makes it easier to achieve greater implementation success with more enjoyment, and creates enormous synergy effects. Even the most difficult change processes can be mastered by law firms using the group coaching method.
The problem is that only a few consultants and coaches have the necessary methodological knowledge and interdisciplinary expertise. Successful group coaching processes require project management knowledge and experience in many disciplines. My team and I combine many years of experience in organizational and personnel development, knowledge, quality, project, and self-management with a mastery of dynamic group processes. It is very important to have the skill to inspire people to embrace the necessary change processes and to coach them during the implementation phase until the goals are achieved. In addition, a consultant must have excellent practical knowledge of the processes in a tax consulting and auditing firm. I also keep up to date with the latest findings in psychology and complexity sciences such as cybernetics and systems theory. We consider the ability to create a culture of open communication and cooperation to be crucial. Only in this way can the diverse synergy effects and the willingness to exchange ideas between the firms be achieved. The prerequisite for win-win situations is therefore the courage to communicate one's own wishes and goals openly and the willingness to use one's own energy to support others in achieving their goals.
You should select consultants and coaches using a simple test procedure. Professional competence is a prerequisite and the minimum requirement for every consultant. However, the decisive criterion is the extent to which they can help you make the most of your own resources and abilities. This involves much more than professional competence, namely the ability to always confront you with reality while at the same time inspiring you, energizing you, and making you feel good. It simply has to be enjoyable to work with someone, both in sports and in business. It takes many years of experience to be able to guide people through development processes, to deal with possible resistance to change in the right way, and to put yourself in their shoes. Professional competence and enthusiasm for the subject matter result from the sum of practical experience gained from many different issues, solved problems, and processes that have been lived through. When in doubt, you should always give preference to the consultant who has the longer and better experience. Quality and good advice are always expensive, as we know, but they are always worth the price. Have you ever noticed that the job title "tax advisor" contains the two words "expensive" and "advice"? Tax advisors, like all good business people, should also be trained by professionals and not by amateurs.
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If you would like further information, please do not hesitate to contact us. Call us on +49 (0) 7854 9696-0 or write to us using the email form below. We look forward to hearing from you.