Gone (thankfully) are the days of clients dropping in dozens of plastic shopping bags containing the year’s outbound and inbound invoices in no particular order a few weeks before the submission deadline.
In recent years, this annual ritual has been replaced thanks to the widespread adoption of online bookkeeping and accounting platforms.
The theory goes that, every morning, your clients will dutifully sit at their desks inputting their invoices and receipts onto these online platforms.
When period end or year end comes, waiting for you is an accurately-filed and up-to-date set of financial records whose information you can use to complete HMRC and Companies House submissions.
That’s not the case however most of the time. Sorry for stating the obvious.
Three types of client, one shared perception
Some clients rarely update their online bookkeeping platforms meaning that, in essence, you and your colleagues are involved in a similar scramble to complete submissions on time like the old days.
With other clients, they have kept their records up-to-date to a fashion but entries are misclassified in many cases and getting the entries to reconcile with the bank account takes hours of your and your colleagues’ time up.
Finally, with a handful of clients, the quality of their bookkeeping is thankfully nearly there and the amount of work you and your colleagues need to do is minimal.
The problem is however that each of the three types of client believes that they have taken a lot of the donkey work away from you because you sold them an online bookkeeping platform as part of your service, regardless of whether they regularly use it or whether they use it correctly.
Nature abhors a vacuum.
Clients expect you to replace that time by providing extra value to them even though, in some cases, the amount of work you have to spend in time and wages sorting out a client’s shoddy financial recordkeeping might be more than is greater than the fee income you receive from them.
If they don’t perceive the value in the services you deliver them, then they’ll happily drop you for another accountant providing their services for £50 a year less.
This has led to a race to the bottom for fees and no-one wins when this is the case.
The problem with online bookkeeping platforms
As accountants, we do save varying degrees of time spent on most clients’ accounts because the vast majority of clients do use the bookkeeping platforms we sell to them albeit not particularly well.
As a result, the early promises made to us by the online bookkeeping platform salespeople did not come into full fruition.
More often than not, these platforms are built for the benefit of the small businesses and not their accountants.
When we as accountants log into client’s online accounts, they’re not always the way we need them to be for us to do the work we need to do.
Many of us found this out too late though.
The supposed extra time we would benefit from through clients’ use of these platforms led to many of us rapidly doubling or trebling the number of clients we served because we thought we’d have the extra capacity to do so.
We didn’t and, as a result, this led to an unexpected and unwanted decline in the standard of service we provided to clients because there just weren’t enough hours to complete the work we needed to complete.
Particularly at those times of year where there are spikes in workload, it’s very difficult to manage an estate of 100-500 clients even with bookkeeping software because we’re working to immovable deadlines.
The opportunity with online bookkeeping platforms
However, online accounting platforms actually hold the key to successfully charging more per month for our services as well as giving us the time to find opportunities for additional work.
The key is automation and workload management.
Whether you have 100 or 500 clients, you should make a checklist of points of concern or points of opportunity for each. From that checklist, decide what it is that you need to see when you log into your clients’ accounts which would qualify as a point of concern or a point of opportunity.
Share the points of concern and opportunity with your members of staff.
Set a timetable for you and your colleagues to log into each client account once a month – more if possible but once a month at least. If you have 500 clients and 5 members of staff, each member of staff would only need to check 5 client accounts each day during the month.
Areas to look out for include:
- changes in transaction volumes,
- when the last invoice was issued,
- changes in average invoice value,
- last bank reconciliation and the number of unreconciled transactions,
- high credit card or overdraft levels, and
- size of bank balance.
Your staff can check whether there is a problem with an individual client by using the guidelines you set for each one and by running a handful of reports on the online accounting platform.
The 21st century accounting business model
Taking this approach solves a number of issues.
For clients, this is the added value. 28% of clients look for a communicative accountant – a professional who knows them and their business well.
By examining client accounts for problems or opportunities once a month or more, reasons to communicate regularly with the client present themselves.
And through that communication, you deliver what clients want the most – business strategy, budgeting advice, and more.
Your client gets the chance to talk with you or your colleagues about themselves and their businesses. Through these conversations, you get to better understand what they want and you can adjust the definition of “problem” and “opportunity” accordingly when later logging into their online bookkeeping platform to check the health of their businesses.
In addition, by helping clients better use their online bookkeeping platforms, the amount of remedial work you’ll need to do at period end or year end will be far smaller and the results you deliver to clients when measured by tax saved will be greater.
For members of staff, you vary their workday and you have the opportunity to train them.
Behind the financial records of a business are the hopes and dreams of a client. Teach members of staff not only what these numbers mean from an accounting perspective but from a business perspective.
You and your members of staff can share ideas during these client conversations and ask your clients for feedback.
36% of accountants admitted they were unhappy with their working environment, reports the ICAEW.
42% of unhappy accountants said they were unhappy because of a lack of opportunities for development.
For junior members of staff, behind every accountancy degree is a £21,000 price tag in tuition fees.
Encourage your junior and senior staff to look past the numbers to see the person and, by doing so, you’ll demonstrate the true value of the work they do for clients.
Share your knowledge, be generous with your experience, and make sure as much as you can that your staff do not feel neglected by giving them a wider variety of work to do and the knowledge they need to do it well.
For you, the change will be profound.
Yours will be an accounting practice which takes a bookkeeper’s approach. You’re not just there at period end or year end, you’re there once a month.
Unlike other firms, you and your team will truly be in command of your workload – not the other way around.
Certainly, there will be pressure points, particularly in January, but, because there has been active management of each client’s account, it will be a much less intense time.
Value, for the owner of a small accountancy practice, is not just measured in the money you pay yourself or the number of clients you have.
The real value in running a business is freedom.
By installing a system which keeps you and your colleagues up to date with every business on your books and which delivers opportunities for your colleagues to make meaningful, regular, and helpful contact with each client, your business will not need as much of your time and effort as it did before.
You won’t have to compete on price either – you can be the accountant which chooses to model their business around looking after 200 clients superbly for £750 a month rather than barely coping managing 750 clients for £200 a month.
You’ll have a well-motivated and well-trained team your client base values – they won’t see speaking with one of your colleagues as being fobbed off speaking with a junior.
This is the 21st century accounting business model which makes for higher paying and more loyal clients, a settled and happy workforce, a supremely-manageable workload, and an owner who can lead more effectively but have the option of stepping back every now and again.
This is how an accountant can help a client’s business succeed and their own business succeed.
The app supporting the 21st century accounting business model
We believe in the potential offered by online bookkeeping and accounting platforms but we’re not blind to their problems either.
We built Hindsight – Hindsight logs into each of your clients’ Xero accounts automatically and flags up what you deem to be potential client problems and opportunities automatically.
As well as saving you and your colleagues the time needed to access each client account and quickly run reports, it also provides users with prompts on how to speak with the client about the issues or opportunities uncovered.
You can divide responsibility by client and by issue/opportunity raised between you and your colleagues and, at all time, you’ll have full visibility on how each client and each issue/opportunity is being managed.
To find out more, please click here.
