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From Wize Mentoring is T he Wize Guys

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Podcast , a show about accounting

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and bookkeeping practice owners and

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the many stories , lessons, and tips

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from their experience of transitioning from

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a time- poor practice to a business

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that runs without them . I hope you

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enjoy and subscribe . We're

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looking at design today , we're looking at

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building teams and we're looking at

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one of the most important positions in

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the team . So the topic today

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is on how to

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allocate client portfolios

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to teams effectively

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and how to allocate clients to

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the teams and , in particular , we're

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looking at the client manager part of

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the client portfolio . So I

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guess , just to start us off , ed , can you explain

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to us why it's important to think about

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client portfolio teams,

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why the client manager is really integral

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to making those allocations correctly

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, and why we even need client managers in the first

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place ? Ed Chan: Okay , thanks

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, T im . If you're small and

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if you're only just starting out and

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you're building your clientele and

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you've got to get the work out , so

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at that point you've got to start

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hiring people to help out

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. All right , so the clients

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will get referred

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to you or you might be advertising

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for them . So they all come to you and

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they come from all different industries and

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different personalities and so forth

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, and because you've started

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your own business , you take them all on and then

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you try to get the work out the door, and

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generally what happens is that , depending

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on your , you'll

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have to either hire someone

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that's experienced or hire somebody

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that's less experienced , which

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will obviously cost less . But

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then as you grow , then you've

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got to decide what kind of person

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to bring on , because it's not just

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what I call throwing a body

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at the problem and hiring more and

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more people and just throwing

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more bodies at the workload , and

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that doesn't work and it will

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end up costing you a lot of money and you

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won't be very profitable and

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it gets very clunky if you're not

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a lot more scientific , if

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you're not approaching it . A lot more scientific than

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just hiring somebody . So

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, obviously , when you're really small , more

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scientific than just hiring somebody . So obviously when you're really small , you have

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the choice to hire someone that's really junior or a more senior person . I would

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go with the more senior person and

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I know you're looking at the dollars

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. But if you invest into

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a more senior person , then

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it can take the workload off you so

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you're not dragged into having to train a

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junior , and initially

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it would be okay . How do

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I afford this ? Ed CHan But as soon as you

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create capacity , that gets

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filled up again . So your production

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capacity gets filled up with new clients

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coming through . And that's happened

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for me as I was growing mine

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. So as soon as I create a capacity , I

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got more new clients in and then I

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hired somebody else , created more capacity and

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then more new clients came in and

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financially , you know , you might

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have to take a step sideways

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or a step backwards in order to

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step three or four steps forward . So

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it's a little bit of a you know , walking

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up steps if you like . And

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because that senior person , that experienced

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person that you hire , will then train

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the next person , you might be able to hire a less junior person and the

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next person that might be able to hire a less junior person and the next

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person that you hire , and that senior person or

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experienced person that you've hired then

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trains the junior one , and so forth . So

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, but if you're looking at the first employee

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and you hire a junior

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, then you've got to train

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that person as well as trying to deal

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with all the work that's coming through the door .

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Now , as you get larger and

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it becomes more sophisticated , you

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can see that you then have to

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recruit a senior client

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manager . You've got to start getting a lot more

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scientific and start managing

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traffic flow , because there's

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two types of traffic flow . There's production

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traffic flow , and you can

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see on the horizontal line down the bottom , you've got communication traffic and you've got production traffic

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flow , and you can see on the horizontal line down the bottom . You've got communication traffic and

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you've got production traffic and

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you've got to hire people to suit

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the traffic . And

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production traffic is easy to understand

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. You know the work needs to get done . Whether

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it's bookkeeping or accounting or

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whatever it is , it needs to

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get done . So you've got to hire

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people to do that work . And

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then there's communication traffic , which

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is , you know , communicating

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with the clients doing their tax planning

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, taking their calls , answering their emails

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, having meetings with them doing

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the tax planning meetings with them . So

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that requires a different type of

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person that has a skill

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in being able to communicate

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with the clients . Now , I'm not

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just talking about talking to the clients , I'm talking

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about being able to relate

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to them and communicate to them at a higher

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level . So the kind of person

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that can suit that role

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is if , for example

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, you prepared a draft set of accounts

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, the client's made $100,000

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profit . You've now worked out that he's got a $30,000

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tax bill . The client says to you

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there's no way in the world I could

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have made $100,000 . There's no

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money in the bank . How am I supposed to have

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made 100 grand ? So the person

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that sits in that seat needs to be able to explain

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to the client so that the client

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can understand where his hundred thousand dollars

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have gone to right . So that's

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not the same as the person who

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asks questions around . You

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know missing a bank statement . Can you send me

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bank statement 42 , right ? So it's

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a different person that handles

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communication . As to production

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, so they're the two types of traffic

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that comes through the door and then

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, as you can see on the

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left-hand side , is traffic complexity

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. So you can see

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there's low-level traffic and there's high-level

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traffic and we break them up into A

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and B-class clients and C and D-class

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clients , and the C and D-class

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clients is generally handled by an assistant

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client manager . An assistant client

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manager is not as experienced

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as the senior client manager , so

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he or she handles the communication

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with the C and D class clients and

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they're in training . I guess , if you like to

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become a senior client manager clients and they're

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in training . I guess if you like to become a senior client manager . Now , that's

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not the same as the top right hand person , which

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is the senior production manager . The

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senior production manager is much more senior

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than the assistant client manager . Yeah , however

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, that's as far as I can , because they don't have

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the communication skills to

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become a client manager . They

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they can do the work , they can check

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the work , they can push the work down

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to the accountants and bookkeepers

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or I call them to the grinders

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to get it done , and they can

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manage the team and check

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the work and review the work , but they

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don't have the interpersonal skills to progress

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to a senior client

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manager or an assistant client

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manager , although they've got a lot more

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experience than the assistant

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client manager . The assistant client manager

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has the potential because

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they've got the potential to have good

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communication skills so they need to be trained

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up . So they need to be trained up with

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the way they communicate with the clients . So you

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start them off with C and D class clients . But

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they also got to do the work because

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they're not experienced enough . So the

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senior production manager helps

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train them in doing the work

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, because in order to be able to sell

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the sizzle , you would have had to have

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made a few sausages in your time to

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know how to sell sizzle . Have

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made a few sausages in your time , so know how to sell sizzle . So the senior production

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manager is helping them with a lot of their production . The

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assistant client manager is fairly still fairly hands-on

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, but they handle the cnd class cars

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, for example , eye returns . So

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they take on the eye returns . They

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either do it themselves or they push

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the iReturns to a production person

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in the bottom right hand corner where

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you can see the blue triangle , which has got

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accountant bookkeeper and that

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could be someone you know in

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overseas on a lower cost

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. So you can push the work down to them

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, get the work done . Or it could

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be someone who's less experienced

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, but in training the work

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gets done . Comes back to the assistant client

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manager . The assistant client manager

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finishes the iReturns off

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and then calls the client . So

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that's the two people working together

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to service an

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individual return . The reason

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why an individual return doesn't go

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up to the senior production manager is because

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you don't want too many hands touching

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that job , because it

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is a low cost product . Otherwise

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, if you have too many people touching

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that job , the profits will disappear

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from it . So the best way is

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for c a nd d class clients is the

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assistant client managers to manage

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someone you either in their

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own team or overseas , at

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a lower cost to get the work done . And

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they do all the communication with the clients

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. So you're investing in your balance sheet

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by training people up and

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bringing them through . Now

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that leaves the senior

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client manager with the communication with the a

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and b class clients . So

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they then need

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to work very closely with the senior production

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manager , which is the one on the top right hand

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corner , and together they work

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in a team . So the senior

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production manager he just gets

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the work done , he reviews it , pushes

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the work down to the accountants to

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get the work done , dots the I's , cross

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the T's , hands it to the senior

9:52

client manager who's communicating

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with the clients and he or she goes

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and calls the

9:58

client up , either has a meeting with them or

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has a face-to-face meeting with them or

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a Zoom meeting with them and explains

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the results to them . And in

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order to build this team , you've

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got to hire the right people with

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the right skills and you've

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also got to match them up with

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the clientele . So you've got

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to match the personality of the

10:21

client with the personality

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of the senior client manager . Sometimes

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, if you don't get the matching right , then

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you could lose a client . So it's very important that't get the matching right , then you could lose

10:30

a client . So it's very important that you get the personalities

10:33

right that suits the client . And

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often I'll say to the client look , we've

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got three teams here , we've got three senior

10:40

client managers here , and if

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you're not getting along with someone , let me know

10:44

. They just leave , let me know , we can try

10:46

somebody else . So I say

10:48

that to them right up front in all our communication

10:51

we also say that to them

10:53

. So that's the gist

10:55

of how it's run .

10:57

You know that's really great Thanks . Hopefully that

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clears up a lot of things for people who are

11:01

still kind of getting to grips with the terminology

11:03

and the mechanics of the Deeper Narrow team . It

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is the key to production , so it is really really

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important to get this right in your own firms and it's not necessarily easy

11:15

in terms of getting people in those roles , but it's really worth persevering with

11:17

. But thanks very much for that , E ed .

11:20

Thanks for tuning in . If you liked this episode

11:22

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11:27

W ize tips on how to build a business that

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runs without you . Head over to wizementoring . com/

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podcast to download a free copy

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of the Accountant's 20-Hour Workweek

11:37

Playbook . We've included a

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link in the show notes below . See

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you on the next episode .