What is wrong with your accountancy practice – part 1

Problem number one – poor systems and processes

When I started my practice back in 2012, I had no set or predefined systems or processes. I had a good idea of the work that needed to be done but I put the processes together as I went along.

This happened because I hadn’t planned this side of running a practice before I started. I had spent the previous 12 years working in industry, not an accountancy practice.

Work practices, processes and technology had moved on.

As I got busier, I realised these processes needed to change, they needed to improve. So, I started to make a series of changes to systems and processes which saw a massive improvement in efficiency and productivity.

I focused on:

i)                   The right software for doing the work

ii)                  The right approach to doing the work – where, when and how

iii)                Educating of and communicating with clients

iv)                Avoiding inefficient and unproductive meetings

v)                  Utilising technology

The right software for doing the work

Rather than working with clients regardless of the type of accounting records they use – paper records, spreadsheets, desktop software, other cloud software I decided to go Xero only.

This meant only taking on new clients who were either already using Xero or agreed to convert.

And over a period of time (it actually took 2 years) converting any existing client not already using Xero.

Taking the decision to tell existing clients that we needed them to convert to Xero (or we couldn’t support them going forward) was a great move. By doing this we lost no clients.

Yes – ZERO.

We explained our reasons – which focused on us delivering the best service we could to clients – and that meant using Xero.

The right approach to doing the work – where, when and how

It’s very easy to become reactive. A client tells you he/she needs work doing, you do it. A client needs their accounts next week to get a mortgage, then another does and another.

You work flat out in December and January, seven days a week, 12+ hours a day, just to make sure tax returns are done before the submission deadline.

Why? Because you’re allowing clients to dictate when work is done and how.

I identified that I needed a system and a process whereby I was in control of when work was done and how. Cloud software has meant that we can decide what work is done and when, we are not reliant on the client.

I schedule work each month, identifying what needs to be done and when. Repeating tasks such as bookkeeping, payroll and vat are straight forward. It’s the completion of year end accounts and tax returns which requires planning. Knowing in advance which jobs you want to complete and then requesting information from clients to enable the work to be completed on plan.

I now know, 90% of the annual accounts work which will be completed in the next 3 months. The missing 10% is jobs which will either be delayed or brought forward; depending on client’s needs.

Educating of and communicating with clients

This is crucial. All the best internal systems and processes will fall down if you don’t communicate effectively with clients.

You also need to spend time educating them. If you introduce them to Xero, make sure they understand the basics and that you check with them on a regular basis to make sure they’re happy with it. It’s pretty demoralising when you start what should be a straightforward year end job only to find your client has made mistakes all through the year that could have been easily avoided with a few minutes training.

Avoiding inefficient and unproductive meetings

This can be a killer. Clients asking for face to face meetings, worse still – at their premises, you agree, only to find that you could have dealt with the issues over the phone, by email or in an online meeting.

Before agreeing to meetings, ask what your client wants to discuss and set an agenda and a time limit for the meeting. This isn’t being rude; it’s just being organised.

And, if it’s a meeting which is outside of their service package, make sure you charge for it. Notifying clients that there is a minimum charge for ad hoc meetings avoids each of you wasting time.

Utilising technology

I’ve already mentioned cloud accounting software. There are a huge number of business applications which can be linked to Xero to improve efficiency, business operations and profitability.

You need to have an understanding of the apps that are out there, but just be careful that you don’t fall into app overload and take out so many subscriptions you lose focus on what it is you’re really trying to achieve.

Find out what are the essential apps which you think most businesses will find useful – AutoEntry, Receipt Bank or Hubdoc for automated data entry being the obvious ones.

Beyond this, perhaps segment your client base and for example, see which apps e-commerce clients are using well and suggest those to other similar clients. Xero has an app eco system of more than 700+ add ons – there is no way you can be expected to know them all.

A big caveat here though – don’t get sucked into using unnecessary products just because the software vendors tell you ‘all the cool kids’ are using it. Work out what you really need, what will be useful for your clients and what make your operation more efficient.

Continuous improvement

Once you’re happy with the systems and processes you have, don’t stop. You should always be focused on reviewing what you do and how, to see if there are better ways of working. Technology is moving at such a pace that you need to keep looking at ways you can work better, quicker, more efficiently and provide a better level of service to clients.

Next steps

If you’re ready to start or are already running your own accountancy practice, here are 4 ways I can help you run the practice you want, the way you want:

1.      Get in touch and arrange a free 30-minute discovery call.

2.      Read my e-book about how I transformed my practice.

3.     Join one of our Mastermind Groups.

4.      Work with me on a 1-2-1 basis.