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Can software unpick the onboarding puzzle for accountants?


New tools are emerging that promise to take the pain away from the onboarding process, but can they cover everything involved in this most nebulous of concepts, and what should firms be looking for when choosing the right software for the job?

3rd Aug 2023
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Generally business jargon exists for a reason – often to provide a time-saving short-hand for a principle or process where the definition is generally accepted within a certain group of people. 

However, the term “client onboarding” doesn’t quite fit this particular mould. While it’s thrown around the accountancy profession with near-ubiquity, in reality, this heady cocktail of data management, anti-money laundering compliance, professional clearance, client service, marketing, sales and other sub-sections of accounting work means a different combination of tasks for almost every practice.

A recent LinkedIn post from anti-money laundering (AML) expert and forensic accountant David Winch, director of MLRO Support, highlighted the range of possibilities associated with onboarding, and AccountingWEB has summarised some of the main tasks raised on the thread below.

  • Making a decision to accept the client based on conversations and data
  • Confirmation of the services to be supplied (to avoid confusion and potential scope creep)
  • Initial fee-setting and payment arrangements
  • Letters of engagement to cover professional and data protection responsibilities
  • Collection of client information
  • Professional clearance with previous accountant (if applicable)
  • Initial contact with HMRC (form 64-8 etc)
  • Confirmation of client ID for AML purposes
  • Initial AML risk assessment
  • Information entered or pushed into practice software 
  • Client/work allocated to a partner/manager/employee – the initial setup of jobs and workflows that get a client to the point where a firm can start working for them.

Then there’s the softer side of the coin, the work some firms do to reaffirm to new clients that they’ve made the right decision – perhaps in the form of a gift basket, additional free service or personalised welcome note.

‘You can’t reinvent the wheel for each new client’

With all of the above in mind, perhaps it’s understandable that some hard-pushed practitioners come to the conclusion that it’s not worth taking on any new business until things calm down, and they’d be better off just raising their prices

But as David Winch wrote in a follow-up to his post, the software around this area is constantly evolving, presenting an opportunity for a new breed of tools to take the pain away from accountants and assist firms with automating their systems.

“It’s important to have a proper system as you can’t reinvent the wheel with each new client you take on,” Winch told AccountingWEB. “Software has the potential to systemise and it also provides a row of coat hooks for me to put things. For example a scan of a client’s passport, a place for a client’s PEP [politically exposed person] search. This will enable me to find these things quickly should I be asked by my AML supervisor.”

While improved record-keeping is a motivation for firms to look at their onboarding capabilities, efficiency is an increasingly important factor, pushing practices to improve their setups, particularly with the current challenges around staff recruitment and retention. The client onboarding process can take more than a month (excluding the wait for HMRC codes) as those responsible piece together the information jigsaw, with much of the work centring around manual chasing and data entry.

Tech solves different parts of the onboarding puzzle

“Onboarding software is less of a tech category in and of itself and more of a process which is covered (currently) by several bits of software,” Jordan Vickery, global director and head of EMEA for accounting tech consultants Journey told AccountingWEB.

According to Vickery, there’s plenty of technology out there for accountants that solves different parts of the onboarding puzzle. For example, tools such as Ignition for proposals, letters of engagement, invoices and payments, practice management apps such as AccountancyManager, Client Engager and Pixie that help to automate the client onboarding journey and manage subsequent workflows, and finally AML components such as Xama, Veriphy and AMLCC. 

With the onboarding software market moving fast, several solutions are looking to build more comprehensive onboarding tool sets for smaller firms – for example, GoProposal by Sage is about to launch new AML tools to complement its pricing and engagement offerings.

However, commenting on LinkedIn, Jacques Malan, founder of Xama, stated that the number of variables across accounting firms makes it almost impossible for one piece of software to serve as an all-in-one solution.

“The opportunity is in vendors concentrating and excelling in their area of the onboarding journey and making connectivity easier and flexible,” said Malan. “This will allow accountants unlimited choice, rather than being made to conform to one vendor’s idea of onboarding. The key is to make those integrated systems easy to access, implement and understand without having to employ an IT person to make it happen.”

Xama aims to fill in the gaps left in the onboarding process via deep integrations with practice management tools such as Client Engager and Pixie, allowing firms to run AML checks from within their software.

Mid-tier to larger firms struggle to keep pace

While parts of the onboarding tech ecosystem have expanded, mid-tier to larger firms have often found themselves left behind. 

Those with a more complex client base such as international clients have struggled to access a full range of functionality from new AML products, while much of the new technology aimed at smaller firms has also struggled to integrate smoothly with the legacy practice software used by many larger practices.

There have been recent developments in this area. Tools like Summa Tech have been developed in part to assist larger firms with speeding up the onboarding process, while larger software houses have also looked to establish a partnership strategy with smaller vendors – for example, IRIS’s recent tie-up with Ignition.

What questions do firms need to ask?

For accounting firms starting out on their onboarding tech search, or those looking to refresh their tools, where should they start, and what questions do they need to ask?

For Journey’s Vickery, this depends on the volume of clients you’re planning to take on. “If you’re planning to sign up two a month, weigh up the time you spend doing the process manually versus the cost of software,” he said. “Most likely the manual way will be more cost-effect than a full tech stack.”

Johann Goree, managing director of OnPoint Accounting Group, has taken an iterative approach to improving the process. “It’s up to the firm to make it as efficient as possible internally,” Goree told AccountingWEB. “We’re always evolving – we’re on to the 20th version of our onboarding process since January this year. It’s never big changes but just small tweaks and improvements.” 

Vickery advised firms to find the issues in their practice where accountants were spending most of their time. “If it’s chasing letters of engagement and direct debit mandates, then an onboarding tool like Ignition offers time-saving automation. If it’s sending out communications and status updates, then perhaps a practice management tool like Pixie.”

Looking longer-term, Vickery also counselled practice owners to examine what their potential system may look like when the firm has grown – what does it look like as a complete system? And how do the apps interact with each other?

“You don’t want five different apps all working independently of each other on different parts of the process,” he said. “You’ll end up with another laborious process, just one that uses software.”

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