October 18, 2016

How to Win More Referrals from CPAs

How to Win More Referrals from CPAs

By Kit Dickinson on October 18, 2016

Aerial view of the New York skyline on a sunny afternoon

I was recently at a meeting in New York with one of our payroll partners and a CPA firm. At one point, the CPA turned to me and said, “I’ve been having this discussion with payroll providers for five years now, but having you sitting here and explaining what you do is exactly what we need to provide a complete solution to our clients.” We were able to lend more credibility to our partner because we understand the top concerns and needs of CPA firms.

There’s been a big push recently for HCM reps to offer incentives to CPAs for providing referrals to their clients. Because clients rely on their CPAs to provide smart options they can trust, an accountant’s referral for who to use for payroll, time-and-attendance, or HR is significant and incredibly valuable.

But offering a CPA a nice referral percentage won’t help you sustain the partnership. Instead, you need to understand their motivators and provide value they can’t refuse. This article will give you the tools you need to win (and keep) a referral partnership with CPAs.

What You Need to Know About CPAs

To win a CPA’s partnership, you’ll need to understand their biggest motivators and pains. Some HCM reps come in and throw around high revenue share offers—20%, 30%, or more—with no sensitivity to the accountant’s role or concerns. It’s the fastest way to find the exit door.

CPAs’ top 3 concerns: Trust, Trust, and Trust

The most important thing to understand about CPAs is that their reputation is on the line with their clients. They don’t want to enter into an agreement that could go poorly or tarnish their image. Their client’s trust is paramount.

An accountant is a trusted advisor in every sense of the word—they even have access to the company’s most sensitive secrets. That bond is extremely strong, and it is not to be jeopardized by simply trying to sell technology. It’s one of the most intimate professional relationships you can find, simply because an entire company is trusting the accountant with their money, their account numbers, and their future financial health. Each CPA gets to know his or her clients as individuals, and it becomes a personal relationship.

So when you’re going into a meeting with an accountant, you must have that understanding, and show due respect for it. Otherwise, you’ll never gain their trust or their willingness to promote you.

Conservative by nature

CPAs are also conservative by nature. They’re in the business of minimizing financial risk for their clients—and themselves. Accountants usually aren’t looking for technological solutions to problems, and they won’t be impressed by a tool simply because it’s high-tech. CPAs are much more pragmatic than that, and need to see real value that addresses their pains. So you’ll need to have a strong value proposition of how you will improve their service to their clients just to get in the door.

Inefficient add-on tasks

A lot of CPA firms deal with companies that have unique pay policies and business rules, which they often throw over the wall to the CPA firm. Because the accountant values the client, they go back to their desk and hammer it out. They get a handful of spreadsheets from their clients, who say, “Just pay my people and get my financials right.” That’s the environment that many accountants work under. But it often means spending time figuring out how to do the task properly and creating calculations from scratch. It’s labor intensive and operationally inefficient.

You have the opportunity to show that you can come in and handle their most basic to most complex accounts and offload what they’re pounding out manually. That will help differentiate you as someone they can trust and benefit from.

How to Sell a Partnership

Understanding CPAs’ pains will go a long way toward winning their partnership. But you’ll also need a smart strategy as you go into the meeting. Keep these things in mind as you prepare.

Show value, not percentage cuts

A nice referral percentage won’t get you a partnership. You need to approach it from a service and capability angle—show them that referring you will be in the best interests of the accountant’s clients as well as the CPA firm. Demonstrate that you can make their life easier because you can shoulder a lot of the burden and work in concert with them to be successful.

Show flexibility

CPA firms generally focus on a diverse mix of a few different industries. So you’ll need to show how your solution is flexible and scalable to handle the breadth of clients the CPA has. If you’re a one-trick pony, you won’t be as valuable to them.

Keep them compliant

Demonstrate your ability to help the firm—and their clients—stay in compliance. Present yourself as an advisor with resources who can make the CPA look good in front of their clients.

Their focus is mostly back end accounting, but what feeds the back end is time collection and payroll practices that need to be compliant and accurate—which allows them to get the general ledger and financials correct. It is key to show how your solutions address the entire life cycle from punch to paycheck, and into financials.

Communicate a local presence

CPA firms are usually regional, so they want to have comfort that the people they work with will also have a local presence. They want to work with people who walk and talk like they do, who understand what’s going on in the area. So even if you’re a national or global organization, show that you have a local presence and account reps who will be dedicated to their organization.

This came into play during my New York meeting. The CPA firm had offices in two boroughs, and they wanted the same rep to work with both of their offices. Their message to the rep in the meeting was, “We trust you and we know you. If our other office can’t also work with you, that will be a problem promoting this partnership.”

Walk before you run

When trying to establish a partnership, focus on getting some shared wins to demonstrate your capabilities. Instead of trying to ink a complex, long-term contract, start small first. Get some wins and then work towards a bigger arrangement.

Have an ace in the hole

Because of some of the unknowns that won’t be communicated in your initial discussion, be prepared with an option you can lean on—a partner who can complement and address some of the challenges that your solution doesn’t cover.

Often, because the CPA shoulders so much of the burden of getting payroll and financials right, these companies don’t feel the need to embrace new technology. If your system can’t do something that they’ve been doing manually for years, they won’t be impressed. Explain that whatever isn’t addressed in your core application, you have a partner whose business is built around complementing HCM systems in specific industries, and for companies with unique rules.

That’s what made the difference for the CPA firm in New York. They said, “All these big-box companies can do 80% - 90% of the work my clients need, but not everything—and that’s what they look to me for. So unless you can get me that last 10%, why should I switch my recommendation from your competition?”

With IDI as your partner, you can confidently say that you have that last 10% covered.

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