5 Reasons Why Accountants Never Have the Time and, what you can do about it

Introduction

When I was an accountant in practice, it’s a phrase that I always heard from small business owners. And often in response to a suggestion on how to improve their business. Now, it’s one I hear from accountants almost every single day; at meetings, on workshops, at events, “Ah yes Aynsley, it’s easy for you, but you don’t understand. I just don’t have the time!”?

The reality is that we are never going to get any more time! It’s that simple! It is always about how we choose to spend the time we have. And yes, it is a decision! Are we focusing in the right areas, doing what we need to do to move closer to where we want to be? Or are we always up against it, dealing with the urgent, but unimportant, issues? Are we constantly distracted or bombarded by information from every media source out there? Or, are we unable to say “no” and constantly having our precious time drained by time vampires or driven by other people’s deadlines?

What’s the reason you don’t have the time?

Why accountants never have the time

In your accounting firm, in addition to the above, there are probably five main reasons why you don’t have the time. But, in simple terms, you are probably doing the wrong stuff with the wrong clients (and maybe in the wrong way?)! And, if you have ever seen that wonderful clip of Bob Newhart, you’ll know what to do about it. If not, google “bob newhart psychologist” and you’ll get the picture.

In reality, we are in a time-for-money business; whether we bill by the hour, have a subscription revenue business, value price, menu price or any combination thereof. We need to stop trading time for money and start trading money for time.

1. Spending too much time on too many grade “E” clients

We all have them. Those difficult or unprofitable clients. They are always querying fees and their direct debit/credit card often bounces, or they pay late. You are always chasing them for information. Their records are a mess and they drop everything in at the last minute and expect you to turn it around in record speed. They don’t understand or value what you do. You may hear them say things like, ”My records are great, all you’re doing is creating a set of accounts. It won’t take you any time!” But they do actually soak up a lot of the team’s time, can be quite curt, and everyone groans when their name is mentioned.

How many grade E clients do you have? And how much of your time is taken up with them? Do you really know? Have you undertaken a client grading exercise (with your team) within the last twelve months? If you want a copy of our Client Grading Matrix, please get in touch.

2. Over-engineering compliance work

There is a difference between preparing a set of accounts and preparing a set of accounts. Some accountants take their clients numbers, put them into accounts production software and press “go”, on the basis that they are “prepared from the client's records”. Others review the balances and entries, make obvious corrections, contact clients about those not so, review for tax adjustments, make sure everything is claimed, look at accruals and prepayments, revenue recognition, work in progress, stock, write off obsolete or slow moving items, write down or scrap any relevant fixed assets, provide for doubtful debts. All the while minimising the client’s tax position and mostly unbeknown to the client. And of course there are many combinations in between. Which set of accounts are you being paid for???

We know that, in reality, unless you are doing an audit, the client pretty much bears all the risk. They are obliged under company and tax law to keep accurate records and prepare accounts on the basis of those records. And we know that, as accountants, we are not required to audit those numbers and can accept representations and statements from clients, without checking. We are not obliged to seek adjustments to make to the underlying records. Of course, we do have regulatory and reputation issues to consider. However, most accountants completely over-engineer the process and over-work the file with too many steps, tests and working papers. Is the client aware of this, and are they paying for the extra work??

When was the last time you really looked at your accounts/payroll/bookkeeping process (from the ground up) to make sure that you are doing what is really required; in a way that is efficient, effective and leveraging technology; and ensuring that clients are paying for any additional work? What systems do you have in place to ensure that these processes are continuously improved??

We have created simple checklists and processes to ensure you are not over-engineering the compliance function. Do get in touch if these might be helpful?

3. Scope creep and pricing

Accountants are pleasers. And they generally hate, and avoid, confrontation. You know the sort of thing that happens. A client phones up for advice, which isn’t in their fixed fee agreement, but are given the advice there and then on the 1 hour, plus, phone call. The bank doesn’t reconcile with the statements and the team spend extra time reconciling the bank to the penny, without going back to the client first.

Do you grade your clients records before you start the job, and, ensure the quality of those records matches with what was initially scoped/agreed? What do you do if they don’t match? Do you fix the records and tell the client afterwards? And how do you stop your team spending time fixing issues with client records, unbeknown to both the client and you??How do you stop the client asking for extra work (outside the original scope) and not paying for it? How do you manage engagements, where certain things are not delivered and then you (or the client) decide something else is required instead? What do you do when the client is always late with their records and the team have to work overtime to ensure deadlines are met? What do you do halfway through the engagement, when the the original scope was “way off”? How do you price? Do you then amend annually or during an assignment, if necessary??

Remember: in arrears is an excuse, in advance is an explanation. This is all about clear, upfront communication. And, of course, getting the pricing right in the first place; making sure you get paid what you are really worth, is key. You will not be right for all clients and not all prospects will be the right clients for you. We have a number of systems for handling scope creep and pricing. If you need any help, please just let us know.

4. Systems and processes

As a profession, we are trained to understand systems and processes - to audit, test and recommend improvements. Understanding systems is probably hard-wired into us and we were probably born that way! However, in so many accounting firms, we don’t have a formally documented system of “how we do it here”. How we do what here? How we do everything here……… think McDonalds! Does your firm have “meet and greet” systems? Systems for accounts preparation - standardised across the firm? Systems for holding meetings and follow up? Systems for improving systems??

I’m not going to get into the benefits of systems here, but know that you fundamentally believe that creating repeatable, consistent results is dependent on systems. And failures are not down to team, but systems. And if a team member is constantly breaking systems, a system is missing to deal with that!

In also worth highlighting that, in general, the system and process we follow as accountants is the maintaining the status quo ie do what we did before (last week/month/year). Most people spend time defending why something new doesn't work, won't work or couldn't possible work for us. Never asking 'if it could work, how would we make it work'. We don't inherently think of continuous improvement and that needs to be built into the culture of an organisation. But enough of that, for now. We are talking about the lack of time at the moment! Importantly though, from a client perspective and a short term consequence of that thinking is that, we need our team to look at the bigger picture and changes that have happened with/to the client (since last year).

If you are looking to get help with systems and how to create/document them, please let me know.

5.?Not knowing where “B” is

Too many accountants are doing the wrong things and either don’t know it or even why they are doing them in the first place. We often hear the term “SatNav for business”. You plot a route between point A (where you are now) and point B (where you want to get to), measure and monitor your actual results versus the plan, and make adjustments accordingly. ?

The problem is that many accountants (and small business owners) don’t know where B is, why they are going there and how long it is going to take! Think of a child in the backseat of a car….. "are we nearly there yet?”.?

Accountants often spend more time on their clients’ affairs than on their own; managing their deadlines and letting the client’s urgency “crash-in” on their own day. Do you know where you are going as a firm, as a team and personally? Do you know what you need to do to get there and how long it is going to take? Do you have a plan (financial and/or action plan)? Are you (or your team) doing stuff that is not helping you get from where you are now to where you want to be?

Quite simply, when you know where B is, it makes the decision of what you do with your time much easier. i.e. will this task get me to my B in the timeframe I want? If it doesn’t then I wont do it, maybe a team member will, but I will only work on the tasks that get me closer to my B.

If you need help finding out where B is, use the Clarity calculator or contact us to show you how Clarity can help you, your firm, and of course, your clients too!

What do you do about your lack of time?

By building a more profitable firm (including a better revenue mix), we can stop trading time for money and start trading money, for time, and eventually trading money, for money.?

It’s crucially important to understand where we are spending our time. And I mean, really spending our time. You should do an audit, and be honest! Contact us to get a copy of our time audit spreadsheet (yes a spreadsheet!).

Awareness is the starting point. When you are aware of something, you can decide to take action, or not. And hopefully you decide to transfer activities that you should not be doing. You need to start with the easy ones first, usually admin. It’s easier to systemise and get quick wins. Don’t immediately think you can employ an expensive "integrator" to help you achieve your goals. Start with the simple stuff first. And when you've created some time, get everyone on the team to do the same - to downward delegate. Don’t be tempted to buy your way out of trouble at the outset.?It usually ends in frustration - "they never do it the way I do".......

Once you have transferred wasteful non-valuable tasks, the next crucial step is to make sure you fill your time with the right tasks. Those that are going to help you get when you want to be. Remember, it’s a constant spiral. Don’t expect perfection immediately. You’ll need to work at it over time. Baby steps, one step at a time. It reduces the overwhelm and you can see progress towards the final destination. But be ruthless in protecting your time. Learn to default to "no" and only say "yes" when you know it's the right thing to help you achieve your goals.

And lastly, make sure you (and your team) are doing the right things with the right clients. Don’t let the 80% of your clients take the profits that the other 20% generate!

Conclusion

I am on a mission to help accountants (and their small business clients) eradicate the excuse “I don’t have enough time”, and ensure they create wildly successful and valuable businesses that generate the time, the money and the freedom they deserve.

Join me and my fellow mission commanders, Steven Briginshaw and Paul Dunn, to find out how we can help you do just that at our upcoming talks , web events or workshops . Alternatively, contact one of the team to arrange a quick 15 min call and see if we are the right fit.

Together, let’s create a world full of time!