As explored on Any Answers last week, clients doing their own bookkeeping can often lead to errors. So how can accountants avoid spending unpaid hours rectifying client mistakes?
“Pretty much the only reason that clients do their own bookkeeping is to avoid the cost of a competent person doing it for them,” began Philisophic1 on Any Answers.
The AccountingWEB member spends far too much time and effort fixing bookkeeping errors when clients are not paying for that service. Frustrated, Philisophic1 suggested a solution to this vexing problem.
“Perhaps this needs to be turned on its head and, when a client wants to do their own bookkeeping we should actually be charging the same, or more, as we would if we were doing it for them,” proposed Philsophic1.
With the chances of bookkeeping errors only exacerbating once Making Tax Digital takes hold, the AccountingWEB member's popular proposition shows how firms are exploring different ways to ease any unexpected workload or to recoup losses if correcting the bookkeeping takes over an hour per quarter.
Managing and educating client expectations
The challenge the cloud team at Raffingers is facing at the moment is not a million miles away from what this Any Answers discussion touches on: what clients are prepared to pay and how can practices manage their expectations.
“It's educating clients on what they are getting for the price,” said Lee Manning from Raffingers. “That is a huge issue at the moment.”
Two years ago, as a full force MTD loomed, the 2016 Practice Excellence medium firm award winners assembled a cloud team. Starting with just one person, the team has now grown to eight people. The remit of the team is to sweep up all the cloud bookkeeping work and of course, any client training that may fall under that.
Manning told AccountingWEB that where in the past the firm was speaking with clients two to three times a year, they’re now talking with them weekly. But the cloud team are coming up against a range of client needs from those who want to do the bookkeeping themselves to those that want to be trained.
“It's that client expectation of what they want and what they are willing to pay for, which is the challenge I am facing at the moment,” said Manning. “They want everything done and they expect that because it is cloud and the software does everything for you, surely you'll price will be a lot lower.”
But as the Any Answers thread shows, that is often not the case.
“If anything the price has gone up because they are getting so much more value and information in real time than they ever have done before,” Manning said.
Clients still push back, assuming that the software does everything – but this is where pricing and education come in. The Raffingers’ cloud team keeps track of their clients and feedback quarterly how they’re getting on. At the same time, the team quarterly reviews fees and the completed work to make sure they’re delivering the service expected. It’s an ongoing process.
Training for success
With firms still arm wrestling clients about price and value, nothing has yet been able to substitute client training as a useful deterrent to the DIY bookkeeping errors.
But often accountants overlook the importance of training. “Generally I think we are poor at teaching our clients how to do bookkeeping,” AccountingWEB regular Andy Partridge said on the Any Answers thread. “We concentrate on the mechanics of what to input and where. Instead, we should have the perspective of what the end result should demonstrate.”
AccountingWEB member DJKL agreed: "An effort regarding education pays dividends; if you tidy their books quarterly make a list of errors corrected as you work and discuss these with client each quarter, that can eradicate the repeat ones and lead to better firm profitability."
As part of the client cloud bookkeeping onboarding, the Raffingers's cloud team conducts face-to-face and Skype training – and then follows up with a session to make sure clients have clicked. It is through this minority report deduction that they can see which clients get it, and which will be a nightmare.
Can the cloud solve the error burden?
Half-hearted client bookkeeping has been the norm for decades, but what’s changed is the accessibility and ease accountants now have with training to steer clients in the right direction.
“The problem was always that, even if we made an effort to train them, or point out where they kept going wrong, we and they just did not have the time during the year to supervise their bookkeeping,” said AccountingWEB veteran and cloud pioneer Paul Scholes.
But that all changed for Scholes when these clients adopted cloud accounting, and as a result, the average time it now takes him to prepare the year end accounts is 20-30% of what it was six years ago. “Key to all of this is that you can train far easier in real time, watching what they are doing and if they get stuck or make a mistake, it's dealt with at the time and they are far less likely to repeat it.
“Compare that to the 30 mistakes you'd find with a set of books you hadn't seen for a year and having to feed that back to the client in the hope some of it would sink in, by which time they were into the new year and destined already to have made another 15.”