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Top tips for solving clients' bad finance habits

26th Nov 2013
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Accountants need to educate clients and provide them with the “robust systems” they need to enable them to cross-collaborate, according to the chief executive of Principa.

In the final edition of our video conversations with Exact, Principa’s Ric Payne provided potential solutions to some of the issues raised in the first two series and is joined by practitioner Paul Scholes and chief executive of homeless charity Emmaus Bristol Richard Pendlebury.

The first conversation focussed on how accountants can work with SMEs to remedy bad finance habits, also touching on the subject of risk and mitigation.

Payne advised, that in addition to educating clients about ways of working with accountants and providing the relevant systems - i.e. cloud accounting - to do this, practitioners do also need to be firm with non-compliant clients.

“Accountants need to make if very clear to clients who won’t work with them, that they won’t continue to be clients if they want that type of relationship.

“The value that accountants bring to the table, in a very large measure, is going to be as a result of collaboration between the client and accountant. Educate your clients, provide them with robust systems that will enable them to get the work to you on time and in the form you need - or let them go,” he said.

He added that recent developments in technology, such as the boom of cloud-based accounting software and applications, are going to provide a “significant” improvement in the client-accountant relationship.

Thinking forward, looking at accounts as a basis for framing strategies as well as providing services “way beyond cashflow projections”. Meeting on a regular basis with clients and being part of their businesses are invaluable ways of working, he concluded.

“There is an opportunity out there for accountants and business people - that through collaboration, everything can change very rapidly.”

Scholes added that while accountants do need to be firm with clients, it is a practitioner’s responsibility for creating situations where there is no change to the way a client-accountant relationship progresses.

“A lot of accountants I work with tend to continue to practice the way they do for 10 years, because they have always done it. Cloud opens up huge possibilities but some firms are using it the way they have used their LAN practices before - that’s because they’ve got their head in the books rather than looking up at where they’re going,” he said.

In short, Scholes' advice for accountants was: Don’t rely on clients to demand everything and take the lead before they do to steer them where you want them to go.

As an SME owner, Pendlebury said that accountants can play a big part in educating clients such as himself about accounting processes.

“I believe that most SMEs are not educated in accountancy, they need easy-to-operate systems,” he said.

And in terms of risk and mitigation, for a not-for-profit like Pendleburys, one of the biggest risks is getting things wrong in terms of the legislation that governs them.

In its first year of business, Emmaus was audited four times - once, by regular auditors and the other times for VAT, PAYE and the charity commission.

Payne added that helping SME clients with mitigating risk, accountants should look at two areas: That of educating them in having good internal control processes and making sure they understand the need to be better leaders, or face losing employees and clients due to poor management.

“And who better to do this than their most trusted advisers?”

To join in with the conversation and view the full video, visit our Exact hub and leave your views in a comment beneath the video.

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