Here are our conclusions on seven concepts which are worth considering:
1. Electronic Document Management
The introduction of the paperless office, coupled with at least two computer screens per fee earner, is an essential ingredient in the drive for efficiencies reducing the need to print documents. Research carried out in the USA in the last few years has indicated that an accounting practice operating within a paperless environment and providing at least two computer screens per fee earner will see an improvement in efficiencies of more than 30%.
My own observations are that such initiatives will lead to at least a 20% improvement.
2. Online Accounting
Firms embracing the online accounting solution and encouraging clients to move to this methodology are proving to be more efficient and effective. Many accountancy firms are providing complimentary online accounting tools for clients on top of the regular services. The improvements reported back to 2020 are astounding. In some cases, margins on jobs which had previously been breaking even or making losses improved by over 15%.
3. Scanning Bank Statements
A number of clients insist on delivering bank statements to their accountants in a manual format. Fortunately, modern technology allows you to efficiently scan any number of bank statements, with a view to this technology identifying the entries and posting these accordingly to the correct nominal ledger.
Firms that still have clients delivering manual statements will consider this to be a significant step forward.
4. Turnaround Time
Many accountants agree that if a set of accounts or a tax return has been completed, even to a draft stage, a fee note is justified. If we focus on turnaround as the key management technique, we have observed that this has helped firms improve their efficiencies, their effectiveness and indeed their cash flow.
Targets such as four weeks for accounts preparation and one week for a tax return are sensible, although they may take a few years to be implemented.
5. 30% Budget Rule
The amount of time that is charged to a client is often in excess of the actual bill.
In order to establish the true position of work-in-progress, we need to implement a culture of charging all time to clients, irrespective of whether this time is billable or not. The 30% budget rule should also be implemented – once 30% of the job has been completed and it is known that it will go over budget, the situation should be brought to the supervisor’s/partner’s attention.
At this point in the process, the client should be informed about potential fee increases before the final set of accounts are produced i.e. before it is too late!
6. Before, During and After
Before a job is commenced, the person who is to do the work should discuss with the manager/partner what the job entails, including the timeliness and the fee.
Upon completion of this planning process, the person engaged to do the job should telephone the client and agree the timescales (see point 4, ‘Turnaround’). They should also agree the proposed fee with the manager/partner.
Now it becomes a responsibility of the fee earner to ensure that the job is done on time and within budget.
The ‘during’ aspect would be to contact the client once or twice to inform them of the job progression.
After the final accounts have been completed and discussed with the client (and often the partner), the person responsible for the job should contact the client and ask whether their expectations have been met. This constitutes excellent client service.
7. The 15 Minute Review
This is a guaranteed no-brainer! No file is allowed to be reviewed without a meeting between the reviewer and the reviewee.
The effect of this is that it makes the reviewing process more efficient. The reviewee learns more quickly as to how to prepare files in the future.
There are many more ideas which we could debate, but these seven ideas could be hugely beneficial if implemented. You and your clients could enjoy a more profitable and satisfying relationship because of these improvements.
Gordon Gilchrist is marketing director at consultancy and training organisation the 2020 Group