As is often the case, the accounting practice’s own business priorities can be a little lower down the priority list than maybe they should be.
In all the clamour around looking after clients to ensure they’re MTD ready, it seems that this side of things have almost been forgotten.
Here are 5 ways that increasing workloads and the switch to MTD are costing practices money - and what you can do about it.
As legislation and client requirements change, so must the work involved. Firms have been dealing with these changes for a long time:
- Money Laundering / Proceeds of Crime Regulations
- Online VAT
- PAYE Real Time Information
- Auto Enrolment
- MTD for VAT
- MTD ITSA
…and those are just a few – no doubt you’d be able to add more to this list.
It’s easy to see how fees can fall out of sync with the work required, given that the work is constantly changing.
Despite all this, pricing and fee reviews remain a source of significant anxiety for lots of firms. Not to mention the fee inconsistency across portfolios in larger firms!
Apps like GoProposal are great as supporting firms with this issue.
As annual returns become quarterly returns, workloads grow because not all of the tasks divide down evenly.
You may only be working on a quarter of the year’s data, but it still takes the same amount of time to request records, assign jobs, complete working papers, raise invoices, chase payments, etc.
Any such processes which are currently handled manually can quickly become black holes for productive time or process bottlenecks - or both.
Automation is key to avoiding growing WIP lockups and mounting debtor balances.
As with the manual processing mentioned above – just because you’re doing the same work in four smaller pieces, it doesn’t mean that your costs to serve are reduced in all cases.
For example, if you’re invoicing more frequently, you’ll end up paying more processing fees for payment collection.
Assume you bill 500 clients annually – that’s £100 per year just on the 20p transaction charges from your card or DD provider.
Bill quarterly and that (obviously) quadruples.
Switch to monthly billing and it soars to £1,200 per year! That’s before the 1% - 2% charge based on the invoice value.
There are more and more ways to accept payment, including apps like Crezco, to eliminate some (or all) of these costs.
Compliance-only clients can sometimes be difficult to chase for money.
Many firms will have experienced the challenge of those clients ‘going dark’ until they need you again – usually their next return.
If you’re in this boat, it’s a good idea to clear up your debtor ledger before you need to switch to more frequent billing.
Adding to a mess is just going to make the situation worse.
Having clients with existing overdue invoices makes moving over to regular billing much more difficult – so take some time to focus on tidying up your debtors ledger.
Satago is a great tool to automate your invoice reminders and gently encourage payment in a professional way.
With more frequent filing deadlines comes the risk of less time available to step back and really assess what’s happening with clients.
This is, of course, important for maintaining great client service – but also essential for spotting opportunities to help your best clients and continue to grow your firm.
Consider adding tools which can extract data from across your practice and allow you to spot issues or manage by exception.
For a couple of suggestions - Satago can do this for your client’s debtors whilst hindsight can look across several data points in your Xero data.
Accountants have done so much to support businesses during the pandemic. It’s important to remember that you’re running a business too and – just like your clients – you also need to prioritise your cashflow.
For more in-depth tips on tackling these and ensuring you’re not losing, check out Satago’s video containing some of the best tips from around the accounting technology space.