This post is excerpted from our free white paper, "Five Warning Signs From Your Accounting Clients". Download your free copy today.
In the midst of all of your day-to-day responsibilities as an accountant, it can be difficult to find time to think about more strategic questions. Where is my accounting firm heading? Are we offering sustainable value to our clients? But perhaps the most difficult question to ask yourself is: do I have the right mix of clients, and the right relationships with those clients?
Below are five warning signs that your client accounting practice may not be moving forward as efficiently and productively as you’d like. How does your practice measure up?
X You’re constantly chasing clients for their accounting data.
The process of getting data from clients usually involves plenty of reminding and waiting, as well as a mountain of paper documents. Worse still, by the time you get that data from clients it’s often already stale, which limits your ability to provide meaningful business insights and advice to them.
X You and your staff spend more than 1/3 of your time fixing client errors.
In 2011, AccountantsWorld surveyed more than 5,700 accountants – one of the biggest surveys of its kind in accounting history. We asked about some of the most frustrating challenges accountants and their staff faced in client accounting. And 69% of respondents said they spend a significant amount of time cleaning up errors that clients make in QuickBooks and other systems like it, while only 11% disagreed with that statement. It’s an astonishing waste of time and valuable resources, because these types of tasks are not adding professional value (and are often not billable).
X Your office supports more than five different versions of accounting software.
At AccountantsWorld, we’ve spoken to thousands of accountants who manage multiple different versions of software for their client accounting work. Some firms have told us they maintain and support 10 or even 15 different versions of the same solution simultaneously! The conventional thinking says “if even one of my clients wants to use an older version of QuickBooks or any other package, I need to support it at my office too.” This is obviously a huge IT problem – but it’s a business process nightmare, too.
X You compete primarily on price.
Business mentor Jack Bernard has shepherded hundreds of small businesses during his career, and he’s often asked about the best way to market a business. "There are essentially three variables: price, quality, and service," Bernard says. "Frankly, the worst way to market your business is almost always by price." Why? Because low prices usually tarnish your image and brand. What clients really want is good value, not the lowest price. And every engagement where you focus on price is one you’re not focusing on better understanding and servicing your client’s most critical fiscal needs. And that leads us to…
X Your service offerings are undifferentiated from those of your competitors.
Most accountants tell us that they would like to spend more of their time providing strategic advice to their clients. But of course, solving logistical and tactical challenges (like client errors and data transfers) gets in the way, and those challenges probably take up the majority of your staff’s time. That’s low-level “value” that any accountant could deliver, and that lack of differentiation is the single greatest threat to your practice’s growth and profitability.
So what can I do about these warning signs?
If you’re experiencing these warning signs in your practice, it’s time to address the root cause: the fact that you’re not in full control of your client accounting engagements. Think about how client accounting is typically done today.
Your clients buy QuickBooks, or another similar package. Since many of your clients don’t know much about accounting, they’re likely to make a bookkeeping mess, while you sit on the sidelines waiting for those messy accounting data files. There’s no proactive role for accountants in this scenario. It’s only reactive and problematic. It costs you hours, it causes you frustration and it marginalizes your practice. You’re passionate about giving your clients a service they really value – but today you’re reacting to a piece of software.
The best response to this serious issue? A truly Accountant-Centric solution. An Accountant-Centric solution (like Accounting Power from AccountantsWorld) puts accountants back at the center of client accounting where they belong. Here's a look at how Accountant-Centric works.
By putting you and your clients at the center of accounting, Accountant-Centric enables you to work collaboratively with your clients (instead of reactively after them). That's the most essential tenet of the Accountant-Centric paradigm.
Ready to learn much more about how an Accountant-Centric solution eliminates these key problems in your practice?
- Download our free white paper “Five Warning Signs From Your Accounting Clients”.
- And please view the 5-minute demo for the Accounting Power solution.