The internet has changed consumers’ expectations. So accountants should consider leaving behind their devotion to time-based fees, argues practice consultant Mark Lloydbottom.
When did you last buy anything without having first agreed the price? Do you know any website that does not make a supply without requiring payment in advance?
Now, let me ask you to recall every creditor schedule you have ever prepared or reviewed and ask yourself, “Who was the last creditor to be paid?”
There’s something wrong about the way most accountants manage their finances
When you recognise that the last creditor to be paid is the accountant alarm bells should start to ring. Clients expect to pay for costs incurred in the year’s trading during the year, give or take 30-60 days. So, why do accountants think it is appropriate to be the exception to standard practice?
Do you really wish to prepare cash flow projections with a spreadsheet formula that allows for lock-up of 30% (debtors and work in progress)? Your funding costs will just keep on rising and you become banker to your clients.
Mark Lloydbottom specialises in management planning and strategy for accounting firms. His latest programme, ‘Deeper - Advanced practice management strategies’ is based on developed over the past 25 years as a practitioner and consultant. This article is an extract from AccountingWEB’s 2013 Strart-up in practice guide.