SELLING ACCOUNTS PRODUCTION SERVICES

From AccountingWEB in association with

A NEW APPROACH TO FINAL ACCOUNTSAccountants receive lots of messages about selling services to clients. Quite often in practice development circles the conversation turns to “value-added” services and advice, which are positioned as the best defences against eroding margins on compliance work such as accounts production and tax return filing.

The problem for many practices is that these compliance services represent their bread and butter work. It‘s what they do best and it’s what they do most of the time, for most of their clients. The challenge therefore is to help those firms to sell and deliver compliance services more effectively.

Accounts production is a case in point, as it is a core service provided by most firms, yet price-sensitive and undervalued by clients. Legal and regulatory changes in accounts filing, iXBRL and reduced reporting requirements for the smallest companies and the new cash accounting for sole traders only add to this pressure.

THE ISSUES• Client education: the lack of or variable quality of client records can make accounts

production work unprofitable, while clients fail to appreciate the value of the service their accountant provides.

• Failure of firms to communicate the value of accounts production, why quality matters, and therefore why this is a service worth paying for.

• Managing workflow and receipt of client records.

• Fee pressure and competition from unqualified accountants and bookkeepers. We can’t be cheaper, quicker AND better, but we should be able to provide a high value, timely service that includes benefits that unqualified accountants and bookkeepers cannot deliver.

Nigel Harris explores the accounts production challenge and gives his insight into how firms can retain compliance services as a cornerstone for their business.

SELLING ACCOUNTS PRODUCTION SERVICES: MAKE COMPLIANCE WORK PAY

ESTABLISHING AND COMMUNICATING VALUEHelp the client understand the value of quality compliance work, and to see it as a platform for a better business.

• Make sure you value accounts production. Don’t be tempted to just mention it in passing or trivialise it at your first meeting with a client, perhaps before moving on to try to sell more exciting ‘value-added’ consultancy services. Stress the value of the accounts as a management tool, the opportunity to set and review budgets and the benefits of monitoring KPIs and benchmarking the company against others in the same industry. There is much talk in the profession of accounts production being perceived by clients as just a commodity, so sell the benefits of your service. For example, a quick turnaround provides timely data for management decisions and tax planning and professional accounts and tax filing gives peace of mind over compliance concerns. The accounts production process also gives you insights into their business from which you can offer proactive advice.

• Make it an on-going process. Many firms have moved away from accounts sign-off meetings in the interest of speed and efficiency, but a face-to-face meeting at least once a year gives you an opportunity to stress the value of the accounts and draw out salient points of value for the client. Even if the points you make are the same as last year, don’t assume clients will remember what you said previously!

• Clear and creative pricing practices: stress the benefits to the client, not the cost. When quoting, provide a detailed work schedule describing all the steps required to prepare accounts and returns and repeat this each year. Most clients are unaware of the extent of the work you do to prepare accounts. Experiment with a three-tier fixed fee pricing structure so that clients can opt in or out of some services, but are always aware of what they are missing if they choose a cheaper package. Consider including high value (to the client)/low cost (to you) benefits within packages to enhance the perceived value.

• Lack of effective workflow procedures.

• Burden of online filing for small companies.

• Bunching of work around annual deadlines.

• Availability of low-cost accounting software enables clients to do their own accounts.

THE SOLUTIONSWhat you can do to reduce the time and effort your practice needs to undertake to deliver compliance and value.

• Establish an efficient accounts production system. This should save time and ensure the quality of legal and disclosure compliance.

• XBRL/iXBRL tagging and output should be fully automated for speed and quality assurance. Wherever possible, data should be shared electronically to save time and avoid errors – for example between bookkeeping/management accounts and final accounts production, and then between final accounts and tax return production and filing. This can be achieved by integrated software, or through outsourcing to a recognised, professional iXBRL tagging service provider.

• Client portals are increasingly important as a secure and effective way to exchange data with clients and simplify the approval of accounts and tax returns.

• Encouraging all clients to adopt the same accounting software or cloud solution can significantly reduce your staff’s time on accounts production.

• Cloud accounting opens up opportunities to work collaboratively with clients and offer proactive tax and business advice, and should at least be considered by all firms. They can be sure that many of their competitors are already doing this.

• Offering an outsourced bookkeeping service to clients, using either cloud or traditional accounting software, enhances your ability to provide pro-active advice (for example monthly/quarterly management accounts and follow up meetings), and ensures the quality of accounting records. It also helps to spread workflow and puts you in control of your client’s records from an early stage, reducing the risk of late submission and incomplete records.

• Client education and training: offer training as an additional service. Some clients will appreciate the annual savings in accountancy fees to be achieved from a one-off investment in improving the quality of their internal accounting. This might include a decision not to accept rubbish from your clients. So fees for ‘shoe box’ or ‘carrier bag’ clients should include a separate, itemised fee for sorting and collating their paperwork. Make it clear to them that they could save money just by keeping better records (or by keeping their records better).

DataTracks UK is a part of DataTracks Services Limited (www.datatracksglobal.com), a global leader in preparation of financial statements in XBRL and iXBRL formats for filing with regulators. DataTracks prepares more than 12,000 XBRL statements annually for filing with regulators such as SEC in the United States, HMRC in the United Kingdom and MCA in India.

Contact us:

(020) 3468 6382http://www.datatracks.co.ukenquiry@datatracks.co.uk

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SUMMARYAccounts production and other compliance services aren’t going away any time soon. Firms need to understand where these services fit into their portfolios and how to communicate their value to the client. Perhaps the first step should be to really think about what you want to say the next time you tell your client about their final accounts.

Nigel Harris, partner, Burton Sweet, leading accountants & business advisers in Somerset & South West UK and a regular contributor to the www.accountingweb.co.uk website and the author of three software guides published by the IT Faculty of the ICAEW.

ABOUT THE AUTHOR

• Offer final accounts production and filing of company accounts to local bookkeepers’ clients. This can be a very effective partnership, enabling you to focus on the higher value technical work rather than the detailed number crunching.

• Create bespoke packages for specific sectors to solve their particular needs, and therefore add value they will appreciate – for example farm accounting and monthly VAT for farmers; sub-contractor invoicing, accounting and CIS for construction industry – all of which also lead to annual accounts production and filing, but also provide regular work over the year.