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What business clients really think

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5th Oct 2015
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Most accountants recognise that good record-keeping doesn’t just help with compliance; it’s good for the business too. Yet a third of clients (33%) still tend to ignore compliance until they absolutely have to.

That was one of the key findings in a survey of 300 accountants and small business people that AccountingWEB and its sister site BusinessZone conducted with KashFlow. The objective of the exercise was to understand the accountant-client relationship and resolve communication gaps to help both groups work more effectively.

The other major discrepancy that emerged from the survey was the disparity between the number of clients looking to their accountants for pro-active business advice in the next year (61%), and the percentage of accountants planning to do more of this work (19%).

But compliance phobia among clients emerged as a major stumbling block. The good news is that in the run up to 31 January a majority of practitioners and their clients recognise the need to collect information and submit returns early; 57% of practitioners send clients regular reminders through the autumn until all the necessary information is supplied, and 54% of business clients said they complied

But one-fifth of the profession (and the same proportion of clients) are still mired in the last-minute rush to meet the self assessment deadline, leading to peak workloads for practices during December/January. Most disturbingly, 13% of the business respondents said their accountant asks for information in advance, “but I’m still always late”.

Another, smaller group of accountants (12%) prepare monthly accounts and feed pay data into owner’s tax return. Just one in 10 of accountant respondents go the whole way and collect accounting records when they are available via an online portal.

When asked about what they wanted from clients in the next year, 42% of accountant respondents focused on compliance and said they wanted to see faster turnaround on tax and accounts information; 19% wanted to get more deeply involved with client businesses.

Are they hearing you?

Significant opportunities exist for practitioners who are willing to get more involved with finance and funding, strategy and technology advice. But the KashFlow survey did uncover some discrepancies between the conversations that occur between accountants and their practitioners on certain advice-related issues.

For example, with auto-enrolment looming for the smallest firms, 65% of accountants said they had asked about company pension arrangements. But only 32% reported having such conversations. Other communication gaps included:

  • Accountants offering management accounts or virtual FD services: 47%
    Client response: 33%
  • Accountants who asked about investment/funding needs: 35%
    Client response: 31%
  • Accountants who asked about strategic objectives and KPIs: 34%
    Client response: 30%
  • R&D activities 33%
    Client response: 19%
  • Clients who asked clients about technology requirements: 29%
    Client response: 21%

Some of these gaps could be the result of sampling differences between the two camps - illustrated, perhaps, by that 13% group of unclaimed clients who are late with their records despite accountants’ promptings. For significant numbers of survey respondents, however, where accountants feel they have raised an issue with clients, the client hasn’t heard them. An occasional query along the lines of “Have you thought about your longer-term business goals?” is not enough to position the accountant as a pro-active adviser. The services need to me framed much more coherently, and explicitly presented to the client - preferably with an explanation of the value that could be delivered.

The AccountingWEB/KashFlow survey did find evidence to suggest that some practices are getting the advisory formula right. Fifteen per cent of businesses said they were happy with how things are with their accountants - a similar figure to those who responded that their accountants are “really interested in my business and what it has to offer”.  

In answer to another question about the nature of the accountant-client relationship, 38% of business respondents said, “They’re like my business mentor - they advise me on most things.”

But even this comforting conclusion comes with a caveat. Through the years accountants have been trained to assume that they are the natural “trusted advisor” for businesses. But that privileged relationship is under threat from the internet. Accountants still came out on top as the first port of call for business advice with 31%, but were only a few percentage points ahead of Google (24%) and online sites like UK Business Forums (24%). Another 20% of business people seek advice from family, friends and business mentors.

Over the next six months, KashFlow will be publishing a series of advisory guides to help practitioners anticipate business problems and address them with timely, proactive advice. The series kicks off this month with a guide to auto-enrolment.

Replies (8)

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Kirsty image
By Kirsty McGregor
06th Oct 2015 10:15

Brilliant!

Spot on! This research combines perfectly with the recent article in The Times Business also published on Monday 5th about the Big 4 entering the small business market.  Small firms only have themselves to blame if the larger firms 'steal' their clients.  Only 35% of accountants ask about investment/funding needs?  Only 34% ask about strategic objectives?  And yes, I see it every day across the industry - as I said in The Times article....smaller firms need to 'up their game'.  That's EXACTLY why I set up The CFN because I saw this happening 10 years ago.  What is depressing though is how hard it has been to change the accountancy profession's approach to their service.  It's happening, but it is so slow (as the above research clearly demonstrates). I long way to go yet!

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By AndrewV12
06th Oct 2015 11:24

Google

Extract above

'Accountants still came out on top as the first port of call for business advice with 31%, but were only a few percentage points ahead of Google (24%) and online sites like UK Business Forums (24%). Another 20% of business people seek advice from family, friends and business mentors'

 

My take on the above, the clients that call Accountants first are sometimes, lazy, do not wish to pay anything for Accounting advice (they do not get charged for asking  their  Accountant for advice so they take advantage).   They do not understand anything to do with accounts, they come out with the most ludicrous schemes, they annually ask the same questions, they don't have a clue they get away with murder.  Though sometimes they just need a little assurance rather than technical advice.  But do we continually want emails, calls, meetings from our clients, sometimes yes and sometimes no.  send them some bills for advice and assistance you will see the calls and emails dry up then.  Though answering calls, etc can be good PR, but does the business suffer.

 

Those that Google have some idea and do not wish to bother or be sent a bill from their Accountant.  The trouble with google is, you gets loads of opinions, advice and assistance.....far far to much, and you get different advice, opinions and interpretations.     Though a reasonable opinion can be formed its pretty good

 

Advice from family, friends is normally hopeless we have all heard the phrase 'My mate says' (the mate is normally a knumskull with no accountancy knowledge). 

 

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Chris M
By mr. mischief
06th Oct 2015 11:30

It's not depressing it's an opportunity!

It's great.  When you are talking to a business owner with a reactive accountant it is easy to get asked to quote for the work.  Right now there is a massive opportunity to put lots of clear water between a proactive accountant and a compliance mentality accountant.

Every single client of mine affected by the dividend tax currently has a strategy in place to be actioned as soon as the tax becomes law, probably in February 16 but who knows how late in the tax year they will leave it?

So when my contractor clients are talking to their mates about the impact of the tax and telling them they have a plan in place, some of the mates are bound to think "How come my guy has not even mentioned this yet?"

Another example from 3 weeks ago, R&D tax credits.  The company's accountant, when asked about these, had said "Call PW or Ernst and Young".

I am currently under way with a £30k tax refund for this company, pretty straightforward R&D claim in my view.

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Adrian Pearson
By Adrian Pearson
06th Oct 2015 15:19

Mixed percentages or just the way it reads?

This is all good stuff but I am just not sure how to interpret the "communication gap" percentages - surely because the accountant/client relationship is a one/many relationship there will always appear to be a communication gap?

For example: Of 300 accountancy firms surveyed 150 say they talk to clients about AE (=50%). Of 300 businesses surveyed 100 say their accountant has talked to them about AE (=33%) BUT how many of the 300 businesses were clients of the 300 accountancy firms surveyed? Answer, less than 100% - hence the perception of the communication gap?

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By johnjenkins
07th Oct 2015 09:49

The easiest way

of finding out if there is indeed a "communication gap" is to find out (of the 300 Accountancy firms) how many clients they actually lost through non communication. My bet is on very few.

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By CalumStewart
07th Oct 2015 14:21

" Fifteen per cent of

" Fifteen per cent of businesses said they were happy with how things are with their accountants"

Am I missing something or is this the biggest issue in the entire article?!

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By AndrewV12
07th Oct 2015 14:30

Picture above 2 people facing each other, diff sides of the road

Hi John Stokdyk, did you base your picture above on a shoot out from a Spaghetti western. Two gunmen bolt up right facing each other.

https://picinmotion.files.wordpress.com/2012/07/ouatitw-7.jpg

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By johnjenkins
07th Oct 2015 16:18

er

a er a er dum dum dum.

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