Nick Sinclair, Founder, The Outsourced Accountant
Jack Blayney, Account Management Team Lead, Receipt Bank
The Outsourced Accountant is committed to improving the accounting practice. As part of our Growth series, we aim to fulfill several objectives:
- Link technology and people
- Make specific processes more automated
- Have the right people do the right work
The webinar’s main thrust is to provide expert insights on how bookkeeping and improved accounting practices can address key issues plaguing firms.
The Outsourced Accountant is focused on growth as a direct response to feedback from our clients and our target market. The insights obtained from these responses are then used to support accountants so they can improve their practice, scale the firm and, hopefully, improve work-life balance and their overall quality of life.
“If you aren’t set up for the major changes that are happening, like the privacy legislation, then it may be too late by the time these things are implemented.”
Nick Sinclair, CEO of The Outsourced Accountant
Topics covered in this webinar include:
- Key issues affecting accountants
- Automation and its impact on bookkeeping
- What leading firms are doing
- Future of automation
- Bookkeeping structure (traditional and cloud-based)
- Building a bookkeeping division
What Are The Key Issues Affecting Accountants?
They are crushed with workflow and capacity
Accountants are busiest during this time of the year because we’re a few months away from tax season. That means more work. Add that to the compliance work that bogs them down on a regular basis.
Accountants are neck-deep in emails and calls, according to data we’ve acquired. Add that to other issues like meetings, calendar management, reporting and handling client issues, and you’re left with time-strapped accountants who can’t focus on client-facing activities.
We’ve uncovered the three reasons why clients leave:
- Reactive advice. Firms don’t have their workflow under control and that results to accountants always “being too busy” they don’t get to talk to their clients. They avoid ringing up clients in fear of getting additional work.
- Poor responsiveness. Compliance work can make accountants too busy to respond to client’s enquiries, which is not good because clients demand more; they want real-time accountants who can address their concerns when they need it.
- Trusted referral from a competitor. Today, due to technology, clients can easily switch accountants if they feel their demands are not being met. A competitor who’s doing better in terms of proactiveness and efficiency.
Important: 89% of businesses consider client experience to be a primary differentiator. Are you actually delivering something that differentiates you from your competitor?
Watch: Changing customer expectations.
Our findings show that most accountants are sitting in front of their computers responding to emails and calls and issues, and they are not actually doing work that is based on their charge out rate. They are not adding value to their clients.
Accountants have really low contact time
Accountants spend too much time on compliance. Low contact time leads to inefficiencies. Compliance work can produce a domino effect, which ultimately results to accountants being unable to add value for their clients.
We found that partners and firms are so swamped with work they no longer have time to do client-facing tasks. These tasks are what actually drive profit.
Accountancy firms are spending a significant amount of time just reconciling transactions. They are occupied with managing and processing the finances and chasing clients for paperwork.
These figures show that firms are stuck with compliance work instead of client-facing activities. We aim to implement processes that take the burden of compliance off the accountants so they can pay more attention to adding value.
“Compliance is really necessary but it’s not sexy.”
There is plenty of technology available for accountants that can help them automate their tasks and, eventually, strip off significant amount of time spent on compliance.
The problem is many firms are swamped with too many software it’s unclear how their IT stack can help them. There are hundreds of them out there it’s become overwhelming.
Firms need to take a look at their current IT stack and identify how they’re actually utilising it.
Based on our findings:
- 25% to 30% are overwhelmed by their IT stack
- 36% said they know what they need but haven’t implemented them yet
- 10% said they have a seamless IT stack
Firms that can successfully identify these key issues and find ways to go around them stand to benefit from the following:
- Reduced partner hours
- Improved revenues
- Enhanced efficiencies
- Improved cash flow
- Additional services offered (business advisory)
- Increased referrals
- Improved staff engagement and retention
Bookkeeping And Automation
Bookkeeping has evolved from being a mere transaction reconciliation process to a valuable core service that’s used to provide vital insights to financial advisory.
- Bookkeeping is the first part of a process and firms need to own it from start to finish
- Cloud technology has made the transition a lot easier
- Technology has made traditional reactive accounting services more proactive
- Both parties can see client data in real-time
- Accountants can make forecasts with pinpoint accuracy
- Firms can easily transition clients to a mobile and paperless process
- Bookkeeping comes before accounting and, now, more firms are adopting it because it makes the end-of-year work faster and easier
- Firms that add bookkeeping to their services
What Do The Leading Firms Do?
- CEOs act as leaders and are not on the tools
- Promote work-life balance
- Have effectively mapped out their people strategy
- The process, IT stack and people are all sorted properly
- Enjoy three to six times revenue on their staff unlike others that only get twice the revenue for a higher cost per employee
- The right people are doing the right job at the right costs
- Accountants have enough time to spend with clients
- Real-time access to data for both parties
- High staff engagement
- Increasing NPS scores and inbound referrals
- Low client attrition rate
- Increased profits
The Future Of Automation
- Robots cannot replace accountants.
- Simple, repetitive tasks can be automated for improved productivity.
- Accountants will always be required for face-to-face contact with clients.
- Receipt Bank aims to make their partners custodians of data: responsible for ensuring data integrity, improving efficiency and automation.
The Bookkeeping Structure
There is not much different between workflows of the traditional bookkeeping workflow and cloud bookkeeping workflow. The same things need to be done. The difference, however, is in the manner in which it is done.
What happens when you move to cloud bookkeeping?
- Information becomes digital
- Technology will automate manual tasks
- Firms are able to create smoother workflows
The Outsourced Accountant Case Study
We conducted a survey and found that less than 20% of our clients are actually using Receipt Bank. This is concerning because it means these firms are not maximising the staff they have, which also means they are not supercharging their businesses.
What are the accountants’ concerns with automation?
Accountants and bookkeepers that charge per hour are worried that technology will get the work done quicker, which means their hours are reduced. Reduced hours mean reduced income.
These days, the bookkeeping ratio (number of clients per bookkeeper) is low. This can be traced back to not using cloud technology.
- It’s currently around 1:10 million
- Receipt Bank partners are aiming for 1:30
- The best so far is 1:52
As processes become more efficient, with the help of tools like Receipt Bank, we want the number to start rising because that will be a key indicator of growth: more clients and more revenue.
Technology enables accounting and bookkeeping firms to really add value at a higher scale for clients. This will mean the firm will become extremely profitable because they have extremely satisfied clients.
A couple of key takeaways:
- Have an offshore team complement your local efforts
- Combine technology and people
Assessing your proactiveness with clients
We ran a poll during the webinar to determine a firm’s proactiveness. The results showed that approximately 80% of the attendees are highly reactive.
This is a result of issues with workflow and capacity.
Identifying The Trusted Advisor
Accountants should be the trusted advisor. However, in the current landscape, the bookkeepers are emerging as the ones clients trust most. Here are the reasons:
- Bookkeepers have access to client data 24/7
- Bookkeepers are frequently in touch with clients
- Bookkeepers acquire valuable data and insights
- Bookkeepers are starting to provide management reporting
- Bookkeepers are embracing technology and using it to move to a more advisory-style business
These present an opportunity for accounting firms: start bringing in bookkeeping services in-house.
Benefits of having your own bookkeeping division:
- You can further enhance the trust with clients
- You can control the relationship because you’re doing both the bookkeeping and accounting
- Clients will have no reason to leave
Building Your Own Bookkeeping Division
- Utilise technology and what you already have from your client
- The average fee per person generated is really low
- You can save 30% to 50% of time on annual tax and compliance work
- Bookkeeping revenue is always twice or thrice more than what accountants get for compliance work
- With the help of technology, you can get 30+ clients per employee
- You can use it as an effective lead generation method
- You can generate a revenue of five to ten thousand per bookkeeping client
- Having a bookkeeping division will strengthen and improve client relationship
To enhance workflow, improve efficiency and drive revenue to your firm, it’s important to consider important factors:
- Key issues that affect accountants
- Technology and its impact on the accounting practice
- Traditional bookkeeping and cloud-based bookkeeping
Understand that clients leave for various reasons:
- Reactive advice from accountants
- Poor responsiveness
- Trusted referral from a competitor
Bookkeeping has already evolved to become a core accounting practice that drives revenue. And there’s no reason for accountants to fear automation because robots cannot replace accountants. Accountants will always be required for face-to-face client interaction.
Just the same, bookkeepers play a vital role in the practice because they:
- Have access to client data 24/7
- Acquire valuable data and insights
- Are already providing management reporting
- Use technology to shift to an advisory-style business
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The Outsourced Accountant is the leader in dedicated outsourcing for accounting firms. We help firms become more efficient and scalable through insightful content like webinars, podcasts and articles.
To learn how to build a successful global offshore team and improve workflow, download our ebook here. If you’re experiencing capacity restraints and looking to scale your firm, call our offshoring specialists today at 1300 896 522.