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How automation helps accountants serve clients better


John Stokdyk offers a summary of how automation has helped accounting practices cope with the disruption of Covid-19, and offers a few practical ideas to prepare firms for the challenges ahead.

17th Mar 2021
Editor at large AccountingWEB
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The past year has demonstrated the paramount importance of having a close relationship with clients. 

The pandemic challenged businesses and their accountants in so many different ways during 2020, but firms that had automated their systems were better equipped to make the transition to remote working.

Known benefits

Most accounting firms are familiar with cloud accounting, which has demonstrated a range of efficiency and client service benefits:

  • Looking over the client’s shoulder and intervening if needed to fix mistakes or correct bad habits before they grow into bigger problems.
  • Smoother seasonal workloads as live data makes it easier to compile tax returns in good time.
  • Less time analysing numbers and entering data leaves more time for interpretation and advice.

While cloud accounting has gone mainstream, so far only a small proportion of practices have used the technology as a platform for “real-time” accounting services that genuinely allow them to step in and offer timely, proactive business advice to clients.

When she set up her practice in rural West Wales in 2018, Sarah Wynne was determined to implement a new way of working using automated cloud tools. One of the key pillars of her strategy is to educate clients about the benefits staying on top of their numbers. 

Because clients have been trained to keep their records are up-to-date, the Wynne & Co team can sit down with them and review their management reports on a quarterly basis and discuss their tax arrangements ahead of the year end. 

This article will show how proactive accounting firms like Wynne & Co are tracking client status in real time and using these insights to address problems or opportunities that might otherwise have gone undetected. Each section will include a few additional ideas to experiment with in your firm.

Covid challenges: Triage and tailored responses

The Covid-19 pandemic speeded up the adoption of new technologies during 2020, as Sarah Wynne explained: “Where some clients had resisted in the past, Covid accelerated the use of data capture tools and our online document portal when it became clear that for health and safety reasons we had to eliminate paper receipts and documents from our workflow.”

The experiences shared by entrants to AccountingWEB’s Covid-19 hero awards reinforced this message, but also illustrated how real-time data environments helped practices respond to the emergency.

Three of our five finalists tagged client records in their practice systems to indicate the kinds of support they would need; which ones needed emergency rescue treatment right away; which were likely to access the various furlough schemes; and which clients were entitled to self-employed income support.

Several of our Covid-hero firms then used automated email systems such as MailChimp or online tools such as WhatsApp and Facebook communities to share the latest guidance with different client groups.

Client relationship ideas
  • Expand your client records to include key characteristics such as VAT registration and reporting cycle, employment status, high personal net worth, company car use and so on. Each of these criteria can be used as the basis for automated email updates or check-in messages.
  • Segmenting and grading clients within a CRM database according to their required service levels, value or fit with the firm’s ideal client profile will give you an additional tool to optimise your growth plans.

Taking the next steps

Martin Tregonning, a Shetland-based sole practitioner who took part in our recent practice automation podcast, subscribes to the view that automation “is a journey, not a destination” and is always looking forward to the next step he can take.

“The temptation is to have a target that you’re heading for, but when you achieve that, you think you’re done. You might have hit that goal, but it’s not the end of the story. The journey is the stuff you didn’t think about when you started off.”

To pick up another concept from an earlier article in this practice automation series, the digital accountant should think more broadly about inputs, outputs and data flows through the practice than about digitising a set of discrete processes.

Focus your attention on building a robust digital infrastructure and educating clients and staff on the benefits of plugging into this environment. If you can devise and implement systems where data collection, preparation and reporting are more automated and robust, then your users and clients can find “self-serve” answers to their queries or run their own reports.

Tregonning doesn’t underestimate the importance of client education to achieving this vision: “No matter how good their tools are clients don’t always keep their information up to date. It’s still comes back to educating them so they understand the importance of what they’re doing.”

It’s a daunting challenge, but remember, you’re looking after their business. Once you can get them to understand why they should take responsibility for keeping accurate, up-to-date information and show reports based on the data they provide, they’ll see where and how you can help them improve their business. 

If you are able to reach this positive state, then you can think about what else you could do to improve your processes and devote your time to intervening when clients need you – just like Martin Tregonning and our other Covid-19 heroes.

Advisory service ideas
  • If you aren’t already doing so, use software that allows you to generate regular cashflow forecasts from clients’ up-to-date accounting records. In the current environment, this is one of the most powerful things you can do to help their businesses survive.
  • Work with clients to identify their business drivers and translate these into key performance indicators (KPIs) they can report on and track. This exercise forces both parties to really dig into how the business works.
  • KPI metrics might be non-financial, but if you can source them from automated systems (Google Analytics, for example), you can bring them together with financial data in simple spreadsheets or online dashboards to give the client live feedback on how they’re doing.

Workflows and job monitoring

Effective digital firms are early adopters of visual aids and automated alerts. When you bring these tools together, they allow firms to monitor client status and respond more effectively without massively increasing the workload. 

With just a little forethought and forward planning, simple, pre-deadline reminders can be sent to clients (by text or email) when tax data needs to be sent. Or alerts can be programmed to warn when a specific condition has been passed that requires attention, for example if a client suddenly incurs a bad debt from a big order placed by poorly rated customer.

Workflows and job monitoring will become even more essential for coping with the increased workload that will come when the next phase of Making Tax Digital comes into play from next year, warned practice software consultant Kevin Salter

With less time available to check on individual clients on a regular basis, building your own practice dashboard gives you a means to monitor which clients have issues that need to be addressed. For example, if a client manager spots a surge in the number of sales invoices outstanding, debtor value or debtor days, that’s a cue to contact the client to discuss whether they might benefit from implementing direct debits or automated debt chasing products.

Workflow ideas
  • The client overview dashboard is an essential aid to effective service. These show tailored to-do lists, deadline status indicators, bookkeeping progress markers and business health scores to let you see how things are going within the firm and its client base, or spot exceptions from the norm that need attention.
  • Automated workflow processes can be applied from the initial prospecting and marketing phases right through to delivering specific services. Your tax information-gathering workflow, for example, could dispatch information-gathering checklists to clients to submit the data needed for their next tax returns to an online document portal.
  • Client onboarding is a specialised workflow that bundles the proposal, KYC checks, engagement letter and client setup admin into a set of prescribed actions that are carried out automatically. Sending back a welcome note (along with billing instructions and how-to guides explaining how the services work) and scheduling in-house reminders to give clients a follow-up call reinforces the impression of your firm as attentive to their needs. 

In the recent practice automation podcast, Sage’s product marketing director for accounts and tax, Chris Downing, acknowledged how accountants had come through one of the hardest years and tax seasons they have ever faced.

On the one hand no one wants to go through an experience like that again, but looming just over the horizon two years away is an entirely new personal tax regime.

“Some practitioners are still a bit raw, but MTD for income tax will be 10 times as intense as the VAT version,” Downing warned. 

The secret to reducing the pain and shock of the transition is to plan ahead and have the right people, technology and processes in place, he continued. Digital-first practices and clients will already have accurate data flowing into their ledgers that can be used for quarterly reporting to HMRC.

“Make sure 2021 is the year we make ourselves ready,” Downing advised. “If we can do that, we can smooth out the annual workflow and ultimately experience fewer of those 31 January headaches. In five years, accountants could be experiencing less pressure with fewer hard deadlines to meet, a better work-life balance and more success.”

Sage is on a mission to automate data entry and speed up admin for every accounting and bookkeeping practice in the UK. Start streamlining workflows and spend more time helping your clients succeed. Get started today

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