52: Transforming Accounting: From Transactions to Relationships

In this episode, I discuss the importance of shifting the accounting industry from a transactional focus to a relationship-based approach. By understanding the 'why' and 'how' behind business activities, accountants can add more value to their clients, helping them navigate both personal and professional challenges more effectively. I share my journey, the importance of core values, and practical steps on how firms can build stronger, more empathetic relationships with their clients. This episode is a call to move beyond traditional transactional services and embrace a more holistic, human-centered approach to accounting.

Chapters

• 0:00 Introduction to Beth Whitworth
• 0:39 The Shift from Transactional to Relationship-Based Accounting
• 2:18 The Importance of Understanding Clients' Stories
• 8:24 Core Values and Building Client Relationships
• 10:15 Practical Steps for Relationship-Based Accounting
• 14:00 Encouragement and Final Thoughts
• 15:55 Closing Remarks and Call to Action

Transcript

 I am Beth Whitworth race car driving quilt making CPA firm owning wife, mom, and boss. I'm here to help you build a business you love by sharing all of the good, the bad, the ugly, and the excellent sides of working in this industry. It's not always easy, but after many years, I can finally say it's worth it.

Let me guide you on your journey to accounting with confidence.

Hi, and welcome to Accounting With Confidence. I'm your host, Beth Whitworth, and I am here today. In this episode, which is a confidence booster, typically a shorter episode to talk to you about a changing trend, which I hope is a changing trend in the accounting industry, and that is moving the accounting industry from a transactional.

Industry to a relationship industry, and we have been working very hard on making that happen. So historically, the accounting industry is, has always been considered transactional. It's the recording of business transactions to essentially create a report on your financial information. So it's based on transactions.

What happened. The debits and the credits. So it's always been considered transactional. And with that, it sort of makes it feel very much like it is time-based. So however long it takes you to record those transactions should be the norm of how you bill. And that historically and traditionally has been the norm and continues in a lot of firms to be that.

But the fact is. With the changing environment and we have AI coming into everything. For me it has always been about the people and just reporting on transactions. You know, the history, what it, it's things that happened after the fact. It's things that, you know, reflect what happened and when it happened.

It never reflects really on a transactional level the why it happened or the how it happened, and so for me, that is as important as the who, what, when, where. We need to know the why and the how, because that is how you build value into your clients, how you help them sustain good things or. Come back from bad things.

So for me, I, it has just been one of those things that I have felt it moving in this direction, but I hadn't put it into words until very recently, and this is something that I feel like is going to set firms apart. Yes. Can AI come in and record your transactions? Absolutely. It can get the. What happened?

Maybe, you know the, the what You spent $5 on a coffee at Starbucks. It can pick up the date, it can pick up the where, but it's not gonna know the why. Was it business or was it personal? It can't tell. It doesn't know. So I think there, it will always be a role for accountants, but as we are moving to this relationship based industry.

It is really important for us to be able to understand why something happened so we can repeat it if it's a good thing or not repeat it. And that becomes very important. If you are just recording transactions and you are not paying attention to the, the holistic part of a business or an individual, you are not serving them except to give them a report of what happened in the past and.

At times, you are able to take what happened in the past to help you make decisions for the future, but you need some context. You need to know why something happened. Was it a, you know, someone on your team made a decision that you weren't aware of and it affected something? Okay? You need to know the why, not just the numbers behind it, and you want to be able to understand how to make.

The right things happen, and so you have to be able to validate some decisions you want. You want to be able to prove that you're paying less in tax and that you have more revenue, but you need to know the, the building blocks of how you got there. And that is relationship. That's not transactions. That is knowing the big picture.

So for me, it has been a journey to get to where we are, and it has started by recognizing myself in other business owners. I as a business owner, wear a lot of hats and you know, I can be dealing with marketing one day. I can be dealing with internal accounting functions. I can be dealing with human resources, I can be dealing with sales, I can be doing actual, you know, coaching and production.

You know, there's a lot of hats going on there. And all business owners. Have that. And so when I started to feel that I could bring more to the table for a client based on my personal experience, that's when I realized this is not about the transactions. This is about relating to someone and understanding what they're going through.

Not just as a business owner, as a member of a family, I have a family. We go through things, whether it's providing for your family or caring for your family, or maybe you're in a state of transition where your kids are, are growing up and growing to college. That is something that. I can understand and it helps me be a better accountant by recognizing that these events are going to happen in someone else's life, not just waiting for that tuition statement to show up.

And at the end of the year, I plug it into their tax return. No, I want to be more involved there. I want to be able to say, how are you going to plan for and pay for this? What is the tax implications of doing it this way versus that way? So it is, there's more to it, not just, like I said, as a business owner, as a family member, and ultimately as a human.

We all. Are affected by societal issues, by the economy, the housing market, what's in the news, the scary stuff in the news, natural disasters. We've got tornadoes, we've got flooding. We have so many things that happen. And if I only said, let me look at this from the standpoint of. How it impacts your taxes and can't have empathy and compassion for what people are going through.

It doesn't make me a good accountant. It's, it's not satisfying for me to not have that understanding with someone. So for me, this movement towards a more relationship based industry rather than a transactional. Is fabulous because think I've said it before, I'm not the detailed process person that typically is attracted to the accounting field, and I am now recognizing the parts of accounting that I don't love are not the most important part of the field.

So if you are sitting there in this. Kind of this feeling of I'm really not impacting my clients like I want to. I am not connecting with them like I want to. I will tell you that you can make that change. Our firm transitioned more to a relationship based firm as we started standing behind our core values, and I'm wearing wearing the shirt here.

Our core values are, we serve. We solve, we do. We learn. We care and we have had these core values for a long time, but as we started to lean into them is when I really felt this translation into we are building relationships with our clients. So as we serve, you know, that is our key. Our number one core value is that we serve our clients and we serve each other with integrity.

And we work to solve problems. We do what we say we're gonna do. We have a passion for learning, and we truly. Care. We care about our clients, our client's business, our client's family each other, each other's families. We are a little bit more of that. I'm going to sacrifice getting something done in the firm for the, uh, ability for my team to be happy and healthy.

And when you have that. Relationship built with your clients when things happen. For instance, when you know I was diagnosed with breast cancer three years ago, I was able to lean on my team and have the understanding of my clients that we will get done what needs to get done still. But there was compassion and empathy from them as well, and I like to think that that is what I lead with is compassion and empathy.

On a practical basis, how we are kind of putting this into play to make it less transactional and more relational is that we no longer just do a. One-off tax return for people. You can't show up during tax season and just say, Hey, do my tax return. We need to have been in touch with you at a minimum for an individual twice a year that we are catching up with you.

What we found before we started kind of implementing this is that people would have major life issues happen and not reach out to us. Because of fear of, you know, how much was it gonna cost? Is it gonna make their tax return more, whatever. And so they wouldn't let us know when. A parent passed or inheritance or you know, something changed with a child.

Maybe they had special needs child, maybe there was an adoption. Maybe we're finding this stuff out just at tax time, which is historical. Typically, this thing happened in the prior year, and if we don't know about it until after the year has ended, we may be limited as to how we can help, and we also weren't able to help them plan to work through what.

They want as their goals, as it impacts their tax and their finances, so. By putting in some subscriptions, some touch points so that we are not just looking at your stuff during tax time. You are, we're reaching out and our businesses we're reaching out at least four times a year. There is none of this.

We're just gonna kind of run our books over here and at the end of the year report for us historically on what happened because we have always felt we cannot help if things are so they're, they're. History. They're history. There's not a whole lot we can do to change history. Now, occasionally the IRS will come out with something, you know, that is beneficial and retroactive.

Okay. There's some history there, but for the most part, it is absolutely a. You need to be more involved and want your clients to reach out when something has changed. When they have a concern, when they just need an answer, they have a worry, and that's what we want to relieve. And that is between our. We serve as the top value and we care as the last value of our five.

Those two things guide us in developing relationships. And yes, we're still getting all the transactions recorded. That is really not what we are selling. And I think as a, a firm owner, if you're out there running a bookkeeping office or an accounting office. You really need to start pushing towards this one.

You know, we don't bill by the hour and hourly billing is something that is very limiting. You have to add more hours in order to be able to increase revenues and. That's not part of our philosophy. So I think really if we could get more of our industry to work on this relationship basis and less on transactional, I mean, I don't even ask anymore how many transactions someone has on their bank statements.

I don't ask how many bank accounts they have. Our fees in are all inclusive. You know, you have two bank accounts, you have eight bank accounts. We're gonna do it because the level of transactions is not the key component in serving our clients. So anyway, this is a little bit of a, a confidence booster slash soapbox episode, but I really wanted to get that out there as we're going into tax planning season, and we're going to very quickly be rolling into another tax season.

That if you haven't as a, a bookkeeping or business accounting firm, owner reached out to some of your annual clients yet for 2025, now's a good time to do it. You need to reach out and say, Hey, I'm here. What has changed? Let's chat. And I think if you reach out and do that, you really find that you're building that relationship and it's, you recognize the clients that are.

Very attuned to that, who are like, yep, I love this. They're your people. And the ones that come back and they're like, Hey, you know, leave me alone. They may not be your people. So being able to kind of suss that out now rather than during tax season, um, would be very beneficial for you. So very much a, a bookkeeping accounting related episode.

So for those who are not in that industry, consider what in your industry could make you more relationship built, the versus transaction built. You know, maybe it's the level of customer service you can give. Maybe it's the impact you can have by, you know, supporting individuals in their efforts to raise money for what they are.

Passionate about, you know, their charity of choice. Whatever you can do as a human, as a member of a family, as a business owner, to understand what's going on in someone else's life, I think it's a, it's a healthier way to do business. So, okay. That's it. I am trying to keep this very short as my little confidence booster, relational versus transactional.

Keep it in mind. And while you're at it, if you would do me the best and most awesome favor of subscribing and liking wherever you're listening to. And as a bonus, if you could go over to my LinkedIn page and follow me there, that would allow me the next time that I go live, I can start going live on my business page.

So go find accounting with confidence on LinkedIn and follow me. I would love that. So, alright, that's all I have for today and I appreciate you and thank you and hope that I am helping to empower you to build a business that you love. Bye-bye.

Thanks for listening to another episode of Accounting with Confidence. My hope is that my experiences can help you navigate the realities of owning and operating your business. Please subscribe or follow the podcast on your favorite podcast listening platform so that you never miss an episode. Feel free to leave me a text by using the, send us a text message link in the show description and let me know how I'm doing.