A brief accountancy guide to help improve client relationships

This accountancy guide is intended to assist both accountants and directors improve relationships and manage expectations. In an era of financial uncertainty, high levels of business debt and ever changing tax laws, it can be argued that an accountant is of shutterstock_384279127paramount value to any type of company, including SME’s and larger corporations. However, the expectation of an accountant from a client is changing, as exhibited by Intuit’s ‘Changing Role of Accountancy’ study that revealed that 67% of SME owners expect accountants to function in a tactical business advisory role, on top of their traditional services.  Moreover, 82% disclosed that they would want their accountant to provide value adding services, whilst the majority expect accountants to use cloud based software. 

One thing for sure is high levels of business debt in an era of financial uncertainty and changing tax laws will only have one outcome if you do not seek professional accountancy advice; company insolvency.

When a businessperson parts with a portion of their revenue to acquire the services of an accountant, they are doing so in order to ensure the long term financial stability of their company, and essentially pass over responsibility of keeping the company’s tax obligations, payroll commitments and bookkeeping in check to the accountant. As such, the value of improving your practice, efficiency, oversight and bookkeeping if you are an accountant is integral to ensuring that your clients remain in good stead with their finances and, in part keeps the company on the right side of insolvency. Regular advice may help protect directors from aggressive parties applying for winding up petitions against them in the future in order to instigate a forced company liquidation

There are a number of small alterations that you can make to make sure you keep your company solvent and cash-flow strong. One of the key early decisions is to obtain a top class accountant in the first place as this will ensure you stay ahead of the competition and you can always be confident your employees jobs are safe and HMRC are always catered for. Accurate cash-flow  and profit and loss projections will give you the confidence to grew in a consistent methodical fashion 

Below are some key tips to consider in order to be achieving this, so you can elevate your practice to the summit of your profession and demonstrate that you are being proactive.
Basics 

1) In order to ensure that your clients business does not overstretch itself financially, you could advise them about the best methods in which to calculate their expenses and utilise them to project how much income they will require in order to stay afloat each month. 

Simple measures, like asking them to record their expenditure on a day-to-day basis may seem relatively basic, but can have a huge impact when it comes to avoiding company overspending in the future. Rather than calculating rough expenditure on a fortnightly, monthly or weekly basis, ask your clients to record it each day, and pass it on to you at the end of the week so that you can alert them if they are at risk of overstretching themselves in the remaining weeks of the month. Moreover, having an accurate idea of all daily expenditure will make appeasing the taxman a great deal easier, and should prevent any unwanted letters from HMRC chasing unpaid tax in the future. This may be difficult at first to get clients into this discipline, but if they expect this from the outset they will not know any different.

2) You should also ask your clients for a comprehensive list of concrete outgoings that they must pay each month, including direct debits, resource purchases, employees payroll commitments, tax, utility costs and rent/ office costs, so that you can clearly ascertain the minimum amount of income that the business must take in each month to subsidise this. As income is typically a lot easier to project, setting a stringent target to earn at the start of the month would be excellent, as your client can then proceed with financial confidence after they have exceeded this amount which can form a strong and secure foundation for them if consistently bettered over a long period of time. Quarterly reviews of progress using Skype, for example,  will allow both of you to assess what needs to be achieved over the next three months. The use of Skype will keep everyone’s costs and time involvement to a minimum.

3) Bookkeeping is more than simply keeping note of expenses, financial commitments and money owed to a business. As a hired accountant, it is about evaluating that data and using its continents to provide beneficial advice to your clients ensuring they can pay their bills when due and do not become another insolvency statistic. If you notice that they have outstanding liabilities that they owe to partners and suppliers, but the books show they have continued to spend on similar commodities, then be firm with them and insist that they need to address their outstanding debt before spending any further. Conversely, if you notice that they have clients and suppliers who still owe them money, insist that they cut off provisions to the partner until they repay this debt, because the reality is that receiving regular and ordered income is essential to running a tight ship. One of the biggest complaints we get regarding accountants is: “My accountant didn’t warn me” about this, that or the other, so tell your clients when they are wrong, or simply what they must do in advance, where possible.

4) Make the most of your meetings with your clients, and prepare a number of far reaching questions for them to answer so that you can give them the most beneficial advice to keep their finances in order. Always enquire whether their business has any cash flow shortages and whether their gross margin is equivocal, or better to their competitors, as this will help you guide them on their expenditure and produce advice about where they can improve. Ensure they are meeting all of their debt covenants with banks and lenders on time, and ask them to give you a comprehensive list of when their outgoings are due, so you can chase them up on in it in the future. 

Moreover, read about their industry, and look at what the typical key performance indicators (KPI) used by companies within that niche are. You can then utilise cloud software in order to keep track of your representatives KPI performance, and can then provide them with valuable advice of where they need to improve or alert them where they need to pick up in order to keep their ship afloat. Demonstrating your understanding of their sector will be invaluable to proving your authority, and improving the perception your clients have of you as an accountant, and a financial expert. 

5) Utilising the latest software ideas such as the ReadSoft Online software to deal with supplier invoices can be an excellent way of improving the quality of service provided by an accountant who advises clients on how to deal with accounts payable. Essentially, using the software can substantially lower how long it takes to process invoices, hasten financial reporting and increase an accountant’s ability to assess the cash flow of a business. If used well, the ReadSoft Online service can have a monumentally positive impact on your client relationships, which is an essential thing to strive for if you are looking to be at the top of your profession. 

The software is hosted within the Cloud, and is essentially an automated invoice service that takes all essential information from an invoice and then places them into almost all mainstream accounting programmes such as Sage 50, Exchequer and Netsuite. It makes the accounts payable function supremely easy and will read and upload all the data regardless of what format it is in. It will also automatically remedy any administrative errors by cross referencing supplier invoices with order documents to see if there is any disparity between the two. Due to the digital landscape it functions on, the chance of receiving incorrect billing is hugely slim, and means that the company you represent stand to capitalise on all early repayment discounts available and avoid all late fees on invoice payments. 

The software can be acquired online, does not require huge levels of spending on hardware and backs itself up. Ultimately, it can save your clientele a great deal of money and time processing invoices, and will make the entire process of financial reporting so much easier for yourself, as all the essential information you would need to produce a high quality report will be simply presented and easy to access on the software. Ultimately, by making the somewhat laborious process of processing and managing invoices quick, easy and cheap, your relationship between your client and yourself should develop rapidly, and their value of your services should rise. With the number of positive client testimonials at your disposal ever growing, your levels of business should pick up, as your reputation expands to a new level. 

6) Use Cloud based software and encourage your clients to do so as well. As previously mentioned, recent studies have revealed that businesses expect their accountants to use cloud based software, and the reality is that their utilisation is now supreme in the financial ordering world. Programmes such as QuickBooks and Xero are excellent for recording data, identifying late payments, charging late fees, keeping books in order and accessing all relevant financial data with consummate ease. You can also set up faster payments from your clients debtors so that money is transferred in a more efficient manner, and this will have a significantly positive impact on relationship with your client. Ultimately, it is worth looking around for the best suited software for you, familiarising yourself with it and then teaching your clients how to use it as well. A co-operative effort between both parties will mean that the finances of your clients’ business will always remain in check, and will improve both yours and their bookkeeping and money management capabilities. 

Written by: Mike Smith

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