Joe Woodard on the AT Podcast—Passive vs. Active Value

I had the pleasure of sitting down face to face with Dan Hood of the Accounting Today podcast in Las Vegas at the recent BDO Alliance conference to record an episode on ways to offer and frame (i.e. package) services in a way that clients perceive greater value.

During the podcast episode, we discussed the fundamental disconnect between how accountants and their clients perceive value in the services they provide. Accountants traditionally measure their worth based on the effort and time invested in a task (effort-based pricing), while clients value the outcomes or tangible benefits they receive (outcome-based valuation). This discrepancy leads clients to question their bills, focusing on the accountant's effort rather than the value delivered, which I describe in the conversation with Dan as a shift from "value to anti-value."

Value through controllership

I suggested that accountants can increase perceived value by focusing on controllership and financial analysis services, which directly impact a client’s operations and strategic decision-making.

Clients value controllership services highly because they deal with operational aspects of a business, like compliance and back-office management, which are often overlooked but critical. We define controllership very specifically here at Woodard®: the controllership service outcome is primarily the reduction of general and administrative expenses—preventing expense overruns and ensuring compliance, which reduces operational costs. For example, proper management of compliance tasks like business licenses can prevent severe penalties and disruptions.

In contrast, with financial analysis—clients often, ironically, do not value this as much as controllership because they do not directly connect the service to outcomes generated by the service. Simply put, clients do not necessarily want detailed financial reports; they seek actionable advice to guide their decision-making process. So, accountants should focus on delivering insights and recommendations rather than detailed analyses, which I compared to a dentist not needing to explain the technical details of a tooth extraction to a patient to alleviate their pain. While financial analysis is crucial, it needs to be delivered in a way that directly supports business decisions and avoids overwhelming clients with excessive details that just confuse them.

Paradigm Shift

Throughout his discussion, I advocated for a shift in how accountants package and present their services, urging a transition from passive support to actively engaging with clients' needs. This involves not only providing necessary services like tax preparation and audit compliance but also actively managing and advising on financial operations to prevent issues and enhance business performance.

Accountants need to adapt to changing business landscapes by re-evaluating how services are valued and delivered, ensuring they align more closely with client expectations and business realities. This approach will likely benefit both accountants and their clients, fostering better relationships and enhancing the perceived value of accounting services.

Click here to listen to the podcast.