What is onboarding?

What is involved in the nebulous term 'onboarding a new client' for accounting firms?

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Greetings and salutations one and all, your friendly tech editor calling.

After an illuminating conversation with the peerless David Winch, I'm taking on the challenge of compiling a list of activities involved in the nebulous term 'onboarding a new client' for accounting firms. I appreciate it very much depends on what type of firm you are and what services you offer, but so far I have:

  • Making a decision to accept the client
  • Confirmation of the services to be supplied
  • Letters of engagement
  • Initial fee-setting and payment arrangement
  • Collection of information
  • Professional clearance (with previous accountant)
  • Initial contact with HMRC (64-8 etc)
  • Confirmation of client ID
  • Initial AML risk assessment
  • Information entered/sluiced into practice software 
  • Client/work allocated to a partner/manager/employee within the firm

Have I missed anything? And what tools/software do you use for the various parts of this process, and why? Feel free to add your thoughts below.

All the best,

Tom

Replies (30)

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By Ruddles
02nd Aug 2023 11:50

I think that you have listed all the relevant points but, in the words of the late Mr Morecambe, not necessarily in the correct order.

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Replying to Ruddles:
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By DJKL
02nd Aug 2023 12:12

I concur- the take on decision can take quite a lot of conversation /work/data gathering to understand what is really involved rather than what one is told is the position- in some cases we would visit and look into a client's accounting systems and how they kept them prior to quoting (I recall years ago visiting a prospective and spending 3-4 unpaid hours looking at ther SL/PL/NL bank recs etc before quoting (we took that one from Deloittes halving their fee))

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Replying to Ruddles:
Tom Herbert
By Tom Herbert
02nd Aug 2023 14:57

Thanks Ruddles. I tried my best to put them roughly in order, but I guess with bits of paper/emails/information flying around it's tough to nail this down exactly.

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Replying to TomHerbert:
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By Mr_awol
04th Aug 2023 12:59

The most obvious is the MLID which appear after prof clearance etc. Ideally it should be done early/at the initial meeting (get them to bring/provide it just in case they appoint you). I appreciate in practice it sometimes follows after appointment (or after an annual review where someone finally realises it never got done!)

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Red Leader
By Red Leader
02nd Aug 2023 11:53

It's like waterboarding, only drier.

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By Justin Bryant
02nd Aug 2023 11:58

Yes; a similar torturous sensation of drowning in paperwork rather than water.

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By tom123
02nd Aug 2023 12:36

I resolve to use the word "sluicing" in a work context now..

Funny how these terms (eventually) become accepted - When I joined a Canadian company, about 12 years ago now, I came across onboarding for the first time - along with a whole load of similar phrases that sounded a bit ugly to me - such as AP/AR etc, and general ledger.

After a while, you no longer notice etc.

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By DJKL
02nd Aug 2023 13:00

Nothing wrong with General Ledger- in the 80s there was reference to both General Ledger and Nominal Ledger, I seem to recall there was a subtle difference between them really now lost (they seem to be fully interchangeable terms these days)

The other one lost is the Private Ledger, I have one of these for an Edinburgh firm of Tea Merchants covering 1935 to 1967(Exhibit for my future Museum of Accounting- 2 visitors a year in a good year)

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Red Leader
By Red Leader
02nd Aug 2023 16:14

Oh yes, I remember the private ledger at a business in the City many, many years ago. Lots of directors lunches, etc. going through. The bound ledger was kept away from the accounts office.

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Replying to DJKL:
RLI
By lionofludesch
02nd Aug 2023 21:39

DJKL wrote:

Nothing wrong with General Ledger- in the 80s there was reference to both General Ledger and Nominal Ledger, I seem to recall there was a subtle difference between them really now lost (they seem to be fully interchangeable terms these days)

The other one lost is the Private Ledger, I have one of these for an Edinburgh firm of Tea Merchants covering 1935 to 1967(Exhibit for my future Museum of Accounting- 2 visitors a year in a good year)

Does it have a lock on it or is it a cheap one?

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By DJKL
03rd Aug 2023 18:16

A lock but no key, however it is open.

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By taxdigital
02nd Aug 2023 13:04

May be you want to add about offboarding'/'offloading' as well!

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By DJKL
02nd Aug 2023 13:11

Heaving- or is that what one does when a farmer's books get delivered to the office in very savoury bags.

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By Tom+Cross
02nd Aug 2023 16:15

I had a nurseryman from the 1980's and whenever I received his books and records, I just knew I'd be covered in sand and grit, from his composting.
I have one client, these days, who's a heavy smoker and that does make me gag, when I open his records.

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By SkyBlue22
03rd Aug 2023 13:15

My favourite was the client that made fish bait... I used to have to wash my hands vigorously after touching them.

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By adam.arca
02nd Aug 2023 14:28

I dislike the term ‘onboarding’ and much prefer the old-fashioned ‘signing up a new client.’ A lot less snappy, granted, but also a lot less Americanised.

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Replying to adam.arca:
Tom Herbert
By Tom Herbert
02nd Aug 2023 14:52

My profound apologies Adam, but 'signing up a new client' wrecks the 50-character limit on AccountingWEB's headlines :-D

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By Hugo Fair
02nd Aug 2023 14:58

Quite ... especially as it's not a term exclusive to accounting practices (and therefore can have very different meanings).

For example, I first encountered the word when the big US software companies tried to enter the UK market for HR back in the '80s ... where in essence they used it as a label for their Recruitment applications.
They then moved on to claiming that it also incorporated all the post-recruitment activities ... or what we were used to calling 'new employee induction'!

Realising that if you can't beat 'em then you best join 'em ... I (and a few others) identified a few things that fell between those two stools (basically preparing for induction once an offer had been accepted - such as creating an ID on corporate networks, pre-booking training courses, updating email groups, and so on) - and rolled those into a superior offering.

So an Onboarding module in an HR system will now *usually* cover all this ... but not always (which is why such a generalised term can be misleading)!

But (apart from disagreeing with the order of items presented by Tom), this ramble may point you at some other missing components.
In particular, where are all the (potential) aspects of admin ... such as ensuring that all of your review/reminder systems (not just in-house ones) are updated?

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Replying to Hugo Fair:
Universe
By SteveOH
03rd Aug 2023 09:50

As an aside, I remember when the the HR dept was called Personnel.

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By Hugo Fair
03rd Aug 2023 13:47

Indeed, and before that (unofficially) the 'tea and sympathy team' - due to its origins in Welfare set up in York with the involvement of Boots, Cadbury, Chivers and Rowntree.

The CIPD as is went through many iterations in the last 100 years:
* 1913 - began life as the Welfare Workers’ Association (WWA)
* 1917 - Central Association of Welfare Workers (CAWW)
* 1924 - Institute of Industrial Welfare Workers (IIWW)
* 1931 - Institute of Labour Management (ILM)
* 1946 - Institute of Personnel Management (IPM)
* 1994 - Institute of Personnel and Development (IPD)
* 2000 - Chartered Institute of Personnel and Development (CIPD)

I recall the corridor huddles in the early '90s as the likelihood of a merger with the Institute of Training and Development firmed up ... was this the time to ditch all those 'old-fashioned labels' and embrace HR within the name?
Fortunately wise heads prevailed!

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Replying to adam.arca:
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By Southwestbeancounter
02nd Aug 2023 15:11

Quite agree Adam - 'Onboarding' is an awful term!

A bit like my clients now starting to say 'my bad' when they forget to send me something or forget to answer an email!

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By Catherine Newman
02nd Aug 2023 15:16

I never understand where "My Bad" comes from. It's horrendous.

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By CathyM1
02nd Aug 2023 17:17

It came from Buffy as a rough translation of Mea culpa.
(Showing my age here)
Cathy

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By Hugo Fair
02nd Aug 2023 18:37

O tempora, o mores!

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By tom123
03rd Aug 2023 11:09

We, in education, have the delightful "off rolling" - which is the (covert) practice of trying to persuade parents of a child that their needs might best be served by another school.

I hasten to add that my employer doesn't countenance this type of thing, but it is something OFSTED look for evidence of.

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RLI
By lionofludesch
03rd Aug 2023 11:31

So OFSTED dsapprove of pupils going to a more suitable school ?

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By DJKL
03rd Aug 2023 18:20

I was part off rolled- it was suggested at the send of S2 that I leave Latin and do something else- likely a wise decision.

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By bettybobbymeggie
03rd Aug 2023 19:35

You've missed the step near the end where you scratch your head and wonder why you answered the phone.

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By Tax Dragon
04th Aug 2023 16:22

It's interesting (or maybe not) to see how the courts have viewed the word. As you've asked in an accounting forum, I have considered only tax cases.

The earliest occurrence I am aware of is in 2017 (Royal Bank of Scotland) - FTT case. The use of "onboarding" was accompanied with an explanation ("an expression used to indicate the bank's due diligence and client acceptance process").

In no case since, as far as I know, has the court or tribunal felt it necessary to expand on the word. The most recent use (again, as far as I know) is the case of The King v HMRC (2023) in which The King was able to recover VAT, having onboarded Genmed, a supplier of managed operating theatre services.

However, Tom, if you find the word nebulous, use another one. "Take-on"?

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By Tax Dragon
04th Aug 2023 16:26

PS before people correct my case reporting... yes, I have used artistic licence. Ie not been precise.

I'm loosening up.

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