Data driven client relationships

I don’t believe that I’m being particularly contentious in saying that bookkeeping has historically been a troublesome area for accounting firms. Getting the majority of clients to take their bookkeeping responsibilities seriously has always been an issue. It ranks low in their list of priorities and, as accountants, we’ve often struggled to change that.

In the past, bookkeeping was a much more laborious process than it is today and the time and cost involved in educating clients to change their behaviour and opinion has always been a barrier. Such a barrier, in fact, that it has been easier for the accountant to live with the pain of trying to sort out incomplete, error-strewn, late records.

This weakness with bookkeeping is one of the main reasons why we have stayed a reactive profession. By the time we’ve turned poor records into meaningful accounts, there has always been little budget, time or appetite for anything more constructive. Consequently, the client relationship has revolve around historical compliance.

Digitalisation should have changed this. With a simplification and automation of the bookkeeping process, the old reasons for failure should have been left behind. The fact that, for some, they haven’t, is now more a case of the accountant failing to drive the change. Few of us like change, and will avoid it if we can when there are other matters still pressing. The onus is on the accountant to now make this happen.

And happen it must…for two reasons.

The first, hopefully obviously, is the digitalisation of the tax system. With tax authorities around the globe moving towards more automated tax processes and real time taxation, accountants will no longer have the time to sort out continuing client record disruption. Here in the UK, the rollout of MTD should be a clear alert to accountants to address any remaining clients reluctant to not just go digital but to do it in an organised, efficient and accurate way. 

The accountant’s choice is simple: either educate/train the client or charge to outsource but the ongoing failings cannot continue.

The second reason is arguably even more powerful. Whilst the first may be about lowering stress levels and avoiding costly chaos, the second is almost existential.

As accountants, our role is changing, or should be. I don’t buy into the ‘compliance is dead’ argument, I believe it remains a core product, but it will come under increasing pressure from competition and alternative client solutions. As accountants, we need to maintain our relevance to clients and having access to real-time information on their businesses gives us the opportunity to do just that. 

Whether or not you see yourself as ‘advisory’, having access to accurate client data in real time allows you to use your core financial management and financial analysis skills to pinpoint areas for improvement in your clients’ businesses like never before. No longer do we have a two week wait for management accounts, we have the business performance and issues laid out in front of us for every client meeting and conversation.

Our relevance is reaffirmed.

In amongst all the talk of advisory, it’s important to recognise that the biggest single change to potentially drive our profession, and our firms, forward, lies at the other end of the scale and is far more basic. The future is about bookkeeping. Get that right (and there are no longer any excuses) and we have a firm foundation to build a very proactive client relationship upon without the need for learning new ‘advisory’ skills. Just be a good accountant!

Would I sack a client who still refused to ‘upgrade’ their bookkeeping?....Without a second thought!

Your firm cannot grow with dinosaurs onboard.

Good luck.