Accountants Hit Problems

20th May 2021
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With businesses having stretched themselves wafer thin to stay afloat this passed year, bought more hand sanitiser than anyone thought could ever be needed and with staff back from furlough, now is the time you need to take a cold hard look at what is not pulling its weight as an expense on your P&L, and any sneaky hidden fees you didn’t know you were paying. It’s time to spring clean your costs, payments and partnerships, and make sure they’re all working as hard you are for your practice. 

In this blog, we take a look at the top 5 things every accountantcy should be taking extra care of, and keeping a close eye on, these days, and sharing our ideas for how to keep on top of the essentials. 

We’ll take you through: 

  • Time – how to take that back 
  • Fraud – how to stay safe 
  • Clients – how to keep them 
  • Liquidity – how to stay smooth 
  • Costs – how to keep them down 
  1. First up, something you’re likely to poor in, and your most precious commodity: Time

In a recent survey, we discovered that SMEs were spending nearly 10 hours per week on payments administration for their clients and their own businesses. It’s understandable then that 42% of business owners say that managing accounts and payments is the worst part of owning a business, and 45% say they regularly have to work overtime to complete business admin or development. The year of lockdowns has only added further strain with 42% saying managing the financial aspect of their business has become more challenging.

And the good news is, there are now easy to use off the peg services out there that can take most of this admin away, and give you the edge you need to keep ahead with your practice, or just take that time back to spend how you choose. 

Open Banking enabled services like Ordo mean payments come automatically reconciled into your accounts, just as you want them, available for your own practice and for your clients’ businesses. Some Open Banking services are compatible with Sage, Xero and QuickBooks, so all the info you need is connected, meaning you don’t have to spend time fishing around for paperwork. 

All payments are notified to you in real time, along with other activity such as ‘invoice read’ and ‘invoice paid’, just like your other vital communications send you notifications like new messages, notifications come with payments now too. So no more feeling awkward chasing a client only to hear they’ve already paid – and all easily trackable at a glance. 

2. Whilst lockdowns kicked us into getting better at electronic solutions, so did the fraudsters do their homework and excel: Fruad 

Fraud went on the increase in 2020 and reached eye watering losses of over £1.262 billion. Yes, Billion. £479 million of that was due to APP (Authorised Push Payment ) fraud. I recently tried to put these numbers into context….and found it incredibly difficult. In the first half of 2019, what seems like now, a mere £207.5 million, was lost to APP fraud, and I suggested you could buy One Hyde Park, and get change, or the Rangyai Island in Thailand and get even more change, or the Seven Seas yacht and still get change, or 41,500,000 tins of Quality Street (no change). Well, from 2020’s figures….there’s no change once fraud losses have been absorbed by mostly UK businesses, APP fraud has more than doubled, and businesses and clients are all paying the price. 

And the good news is, the new Open Banking technology solutions available today are a match and better their 2020 fraudster rivals and continue to do so. 

Sending out invoices by email is fraught with risk. Criminals have got umpteen robots searching with more umpteen algorithms for phrases like payment, invoice, payment requested, demand, bank details, remittance, Bacs etc, and they hack into those emails, change your account details to their own, and when your loyal client makes their payment, it’s the fraudster that profits. This leaves two innocent victims: (i) you and your practice that will never receive due payment for good work done (unless you want to ask your client to pay twice), and (ii) your client, who still paid and is out of pocket. 

And then there’s the indirect consequence, that long shadow that is then cast over the both of you: 

your practice – why would my accountant use such an insecure method for collecting payment; you’re accountants, you’re meant to look after money not cause it to be directed into the hands of fraudsters, you’re meant to demonstrate best practice being our trusted advisor and you’re regulated, how could you not be abreast of the latest systems that would protect clients when requesting bills, surely that’s the least you can do, being our business partner. I can’t trust them anymore” thinks your client; and

your client –did they really pay, are they on difficult times and don’t want to tell me, is it really likely my invoice was intercepted, surely that’s a bit far fetched and doesn’t happen that often, I can’t trust them any more” thinks you. 

And you’d be wrong, because that £479 million of APP fraud has got to play out somewhere, and could just as easily be on the next invoice you email out.  

The result? Two parties that used to work well together for years, who no longer trust each other. 

Save yourself, and your clients, the hassle and worry of whether, or rather when, things are going to go wrong for you, and use a secure service for sending your invoices in the first place. That technology is available today; Open Banking technology means requests for your bill to be paid and your invoces are sent across secure platforms rather than the internet. They collect minimal data, come with bank grade security, and they have to be authorised by the FCA with their people being passed as fit and proper persons, business models and security reviewed and approved, and ongoing monitoring and compliance. Is it worth the risk not to?   

 3. You’ve spend time and money marketing to them, and maybe years servicing them, don’t let them leave: Clients 

You’ve become their go-to, the tursted advisor and confidant, the one they call in a panic with a deadline and are expected to perform super hero turn arounds and feats to get them out of their pickle. In that moment they utterly and entirely value you and what you bring. And then it’s back to the running of their own business, they too trying to find new clients and being the trusty go-to for their customers, and suddenly, reading and answering your emails, and paying your invoices are not their top priorities any more. You had their attention, you impressed them with your service and your clever solution to get them out of a fix, and that time passed and they moved on to other things, with emails falling down the inbox, post getting lost in the malaise and invoices piling up. 

Plus, we recently discovered that, over lockdown, people gave themselves a ‘Financial MOT’ and the results were startling:

  • 80% of people are worried about money and are cutting back; 
  • 40% of people had or were going to start cancelling direct debits; and 
  • 50% of those wouldn’t be putting thoe DDs back. 

So you need to do all you can to make sure your bill gets paid. 

Here are our top tips for getting paid:   

 (i) make it easy for your clients to pay you a few clicks are all people have tolerance for these days,  

 (ii) remove all barriers – have your invoice pop up on something you can guarantee they’ll always hve with them…. their smart phone, 

 (iii) make it quick – use a system that negates clients having to look up amounts and refereces, use a service that sets up the payment for them so they just click, and 

 (iv) minimise mistakes – use services that don’t rely on your client keying your bank account details, that will go wrong some day.  

And the good news is, all this is possible if you use an Open Banking enabled solution. These are services provided by FCA authorised companies, which mean you’re in control of inputting the amount, the account you want to be paid into and reference; it then appears to your client as a one time use secure tokenised link in an SMS text or email. They will know it’s from you because it can come from your email, and they’ll recognise the practice, amount and bill and will be expecting it. There’s no sign up, registration or downloaf needed, within 3 taps, your client can have paid. 

4. Keep the cash flowing no matter whether it’s lockdown easing, back to tier 3 or the countdown to freedom – Liquidity 

Whilst physical use of cash has plummeted during the crisis, the cash available in your bank account is still crucial, and liquidity and agility for any business is key. You’ve done the work, the client is happy, you probably took a hit on fees to help your clients out in hard times and you may have waited a respectable amount of time for the work to be processed before sending your bill. But now it’s time to be paid and you deserve it. You do not deserve delays from your client, delays from payment processors or payment systems or your payment facilitator hanging on to your hard earned income. 

Whether it’s clients paying by Bacs and this taking 3 days, using payment processors that require they hold amounts in case of chargebacks for up to 6 months, or just taking several days to pass the money to you, that is not and should not be your problem, except with these traditional methods it often is. 

And the good news is Open Banking technology is instant payment, direct to your bank account, the moment your client pays, straight from their bank account. Your payment does’t slosh around a payment system for a few days, it doesn’t sit with banks or processors earning them interest or acting as their cash buffer, it is credited directly to your business account, in cleared funds, ready for you to do what you will with. It’s your money, it should sit with you. 

And finally, 

5. Your bottom line – that all important number that keeps you in business – Costs

The key to keeping your costs down is knowing how much you’re really paying for services. Once you know the actual cost, including any add ons, any subscription fees, hire fees, monthly fees you’ve forgotten about, or percentages of transasctions fees you may pay for some of your payment services for example, then you can evaluate whether you still need that service, whether that service is still worth that cost and if so, are you getting the best value on the market. 

In a recent survey, we found that 1 in 5 business owners don’t know what they’re charged, for example, for payment services. In an industry where, out of those that do have that knowledge,  nearly 10% of businesses pay 2% or more of their hard earned cash over to payment processors, it pays to be on top of your payments and find out if you’re letting any hidden costs creep through. 

And the good news is the writing is on the wall for cards, payment facilitators and processors, as Open Banking is a much lower cost money transfer mechanism, and it’s eating away the profits of those that want to profit from you for no good service. One of the lowest cost options on the market is Ordo at a maximum of 20p per payment request, no matter the amount being requested. Is getting your bill paid quickly and easily, and definitely into the right accunt for certain worth 20p, or are you going to leave it to chance with the fraudsters? 

Accountants are trusted advisors, you’re expected to handle money well and make wise decisions whilst demonstrating best practice. An easy way to get a win for you and your clients is to take advantage of Open Banking services, like Award Winning Ordo, that save you time and money, increase your security and protection of clients, all with a few clicks from a desktop or smart phone. Ordo is the official Open Banking partner of Sage, is fully integetated with Xero and QuickBooks as well, meaning you have all you need at your fingertips. Book a quick demo today and get those problems lurking in your books dusted away. 

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