With increased competition from virtual, café-style accountants and MTD on the horizon, established accountancy practices are under greater pressure to streamline procedures and processes, so they can improve efficiency and add value to the services they provide to clients.
At the same time though, they also need a clearer understanding of how they can make the best use of the finite number of hours they have available so they can maximise their fee recovery rates.
Sounds simple enough in theory, but many practices are still underperforming when it comes to charging thresholds and are in danger of writing off thousands of pounds of additional potential income every year.
Whilst many argue fee increments are unsustainable with price-sensitive clients, part of the answer lies in upping the perceived value that you are providing rather than focusing on hourly billing.
Digital record keeping
With MTD, accountants have the perfect opportunity to act in an advisory capacity to thousands, if not millions of SMEs. Indeed, according to the ICEAW a whopping 75% of businesses do not currently use accounting software tools for record-keeping.
Similarly, there are thousands of accountancy firms out there that are still reliant on paper-based files and Excel spreadsheets to tackle labour-intensive tasks that might be easily automated.
On both sides of the fence, there is massive scope for digital transformation, but where technology can really make a difference for the accountancy firm is in liberating your people resources so they can be channelled into areas that will be recognised and appreciated by both new and existing clients.
Take the example of chartered accountants Wagstaffs, based in Hertfordshire, who serve clients both locally and internationally. They moved from a paper-based system to a cloud- based workpapers management solution and achieved an impressive 5% better fee recovery rate on their year-end work.
Technology has also helped them to more easily present top-line information to clients on a regular basis, rather than leave them drowning in reams of data that provide no useful business metrics or are out of date by the time they receive them.
With the latest real-time accounting software and on-line collaboration tools, accountants are better equipped to save precious time and be more proactive. By maintaining regular contact and providing advice and information that has a direct impact on clients’ balance sheets, you can surpass clients’ expectations and increase your overall value and stickability.
The payback speaks for itself: a fee recovery improvement of between 5-15% translates into uplift in annual fees of between £40,000 for a smaller practice, and clients have achieved up to £400,000 for their mid to large firm.