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Developing a Data Mindset to Proactively Make Clients’ Lives Better

Smart Client Management needs a data mindset to proactively make clients’ lives better. I think most practitioners would agree with me that the reactive model ...

By Darren Root, CPA, CITP, CGMA.

I think the key part of the headline of this article—and the words to really consider—are “to proactively.” In my experience, accounting firms have historically operated with a very reactive model of client service. I don’t think creating a reactive model was necessarily a conscious choice by most firms, but rather a reaction to not having made a choice at all.

To be clear, I completely understand why firms seem to naturally gravitate to a reactive mindset. Just knowing that you have more work than you can handle, that tax season is like an ongoing three-alarm fire, and that clients are incessantly calling, emailing or texting you with questions, thoughts and concerns…well, reacting is pretty much the only way to get through your day.

If you can relate to what I just described, I want you to know that I believe there’s a better way.

But first, let me acknowledge that how you’ve been doing it is not necessarily wrong, because I don’t think there is a right or wrong way in this case. I might also suggest that the reactive model has served you well if you’ve grown a nice business that supports a good financial lifestyle.

But there are signs that clients want a more comprehensive approach—not only from their accountants, but also from their financial advisors and their doctors and just about any other professional they deal with. In addition, staff are weary of the practice of growing clients indiscriminately, causing staff churn and ultimately putting firms in jeopardy.

So, what’s the “better way” I mentioned above? The better way is to evolve your practice from a reactive to a proactive model of working with clients.

For years, I struggled to understand exactly what the industry meant by saying that firms should be moving to “higher level advisory services.” I think because my practice had been very reactive, I struggled to understand how to transition to an advisory practice. I understood that I could create offerings that were more advisory in nature, but I was still somewhat reacting to clients asking for advice on those advisory offerings.

It wasn’t until I was prompted by a good friend a few years ago to sign up for an executive health program—a subscription concierge doctor—that I realized the physician’s goal was to continually collect as much data on me as possible so he could proactively guide me to better health (annual physicals, access to data from my Apple watch, etc.). The relationship I developed with my concierge doc was completely different from anything I had previously experienced in healthcare…and I liked it.

And I realized that this was exactly what I should be doing with my clients. But what I also realized was that the key driver to proactive health management was the availability of health data. The big shift needed was the development of a data mindset: the active collection and organization of all the client data necessary for a comprehensive picture of our client’s financial health.

As professionals, we know what financial health looks like for our clients. If we have an ongoing snapshot of where our clients are in their financial health journey, we can proactively counsel them on next steps. Comprehensive financial health is what our clients want from us as professionals.

I categorize client data into three categories:

  1. Financial data—Information that exists in accounting systems you can easily access for benchmarking, analysis and advice.
  2. Technology data—Information that informs you about the technology tools your clients use so you can better guide them to the right solutions.
  3. Business data—Data about your clients that’s not easily accessible, but important just the same. It includes data like entity type, buy/sell agreements, loan interest rates, etc. Business data is all around your firm…but rarely is it easily accessible.

If you do the work of articulating a picture of comprehensive financial health for each of your client types, and you have at your fingertips your client’s financial, technology and business data, you’ll be in a solid position to be proactive in serving your client. To be clear, proactive client management means you reach out to your clients with ideas and solutions to make their financial lives better.

Would your client be willing to pay a premium for this type of relationship, knowing that you’re actively thinking about them and not just reacting to their questions? Could you serve fewer clients if the clients were being comprehensively served?

The approach I am describing is called Smart Client Management. Smart Client Management enables accounting firms to curate their ideal client roster, maximize recurring revenue and obtain a sustainable work environment. Executed correctly, Smart Client Management helps firms grow existing relationships and build a year-round revenue stream while developing a happier team with more satisfied clients.

Smart Client Management needs a data mindset to proactively make clients’ lives better. I think most practitioners would agree with me that the reactive model currently used by most firms doesn’t seem to be working for anyone. And that’s why it’s time to take advantage of the better way that other firms are finally employing. Not only for your clients’ financial health, but for the career and life satisfaction of you and your team…and for the future of your firm.


Darren Root, CPA, CITP, CGMA, is the Founder of Rootworks and serves as Chief Strategist for Right Networks. Darren has over 30 years of experience as a CPA and in management within the profession. He has vast accounting expertise and a passion for helping firm owners modernize and transform their practices into thriving, sustainable enterprises.

Darren has earned numerous awards and continues to contribute to the profession with books, articles, podcasts and shows that educate and inform the industry in all areas of firm operations, industry trends and business model.

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