How to improve your practice’s workflow – one process at a time
What is workflow? Well, it’s the way work gets done in an office. These workflows are orchestrated and repeatable business activities.
Your practice’s interactions and activities...
For accounting practices, workflows represent all the activities that take place in each practice area, as well as the interactions that the firm has with its clients. Understanding all these activities and recording them helps a firm analyse processes and ensure it’s running smoothly.
But to stay competitive, firms need to ensure high productivity and be able to rationalise resources needed for a process. Workflow automation technology can help achieve efficient and compliant productivity.
We know work never stops, so to ensure maximum focus on each practice area while reviewing processes, the best approach is to review and improve one process at a time.
How to improve a process...
- Start with low hanging fruit – areas that appear to be most in need of help because of broken processes, high operating costs, low client satisfaction or paper-intensive operations.
- Appoint an in-house champion to coordinate the effort and work with the practice heads to understand the workflows and look for ways processes can be optimised.
- Use the opportunity to introduce digital automation technology that will help you move to a paperless environment, enhancing client satisfaction and employee experience.
- Choose a workflow automation platform that will accommodate your custom workflows, be easy to implement for each process and can integrate well with your existing systems.
- Choose a technology partner that can work with you to review, map and then move you to the digital environment. This can save costs on additional IT consultants.
- Last but not least, choose an automation platform that charges by process and not by number of users. This will reduce costs and allow you to deploy the workflow automation technology across internal as well as external users.
One Paper Lane is helping accounting firms of all sizes digitise workflow and automate their practice areas and client management work – one process at a time. You get more than cutting edge technology with One Paper Lane, with our willingness to work alongside firms, help them review and map processes and bring in custom solutions as needed.
Who we are and what we do...
We are One Paper Lane, the digital process automation and collaboration platform of the future. We are launching in the UK at Accountex on stand 490.
Our technology will enable you to streamline, automate and improve your processes. It can work together with your existing software, apps and tech tools. Our specialists also help you implement these improvements.
We have already helped accountancy and other professional services firms increase productivity and improve both the client and team member experiences.
Visit us and our UK partner, practice advisers Foulger Underwood, at Accountex. Alternatively, for more details, contact Julia Whistler at [email protected]
The secrets of SEO for accountants
Every time a prospective client searches for accountancy practices near them, they see the following types of results:
- Advertisements: These are placed by businesses using Google Ads. This is known as SEM (search engine marketing) and it is an easy way to promote your website so that it appears whenever someone searches for specific keywords.
- Map of the area: If Google knows where you’re searching from, a map will pinpoint some local accountancy businesses. Try a Google search for “accountant near me” and you’ll see an example.
- Organic results: These are the websites that Google considers to be more relevant. You’ll want your business to show up at the top of this list. Some of the first results might be directories of accountancy practices so it’s important that your practice is also listed in those sites.
In order to appear at the top of the list of organic search results, your SEO needs to be up to scratch. It enhances your probabilities of being among the first organic results and, although it takes time, it is highly effective when done right. Below is a summary of four steps to follow to start optimising your website:
1. Set up a high-quality Google My Business profile
If you haven’t already set up a ‘Google My Business’ profile, do it now. Every small business should have one these days.
2. Fill your website with highly relevant content
One of the most effective ways of optimising your page for search is to look at the keywords people are using in your area and including them in your website. If you start a Google Ads campaign you will gain access to their Keyword Planner. Find more tips on relevant content in my blog.
3. Ensure consistency across directories and social media
Search engines also refer to directory websites such as Yelp and Yellow Pages to confirm details about your business. Be sure to have the exact same business name, address, and phone number in listings on all the important sites of this type.
Finally, look up your business on ‘Moz’ and check that your listings are verified, identify any duplicates you might find and get recommendations.
4. Seek great links, ratings and reviews
Never underestimate the power of great reviews - Google loves reviews because searchers love reviews. Politely ask your clients to share their opinion about your accountancy practice on these pages, and even send them direct links to the review pages to make it even easier for them to leave their feedback. See my blog for ideas on how to encourage clients to give positive web reviews which will boost SEO.
Why smart staffing is central to your accounting firm's future
Practices are finding it increasingly challenging to recruit, manage, develop and retain their employees - and also to provide a good working environment with a positive and clear culture.
Smaller practices may struggle to manage the day-to-day ‘HR’ issues alongside the challenges of delivering value to their client base. Larger practices can forget to manage and invest in their talent, resulting in it walking out the door to a more appreciative competitor.
Frequently, the resulting recruitment activity is ‘cavalier’. With the war for talent so strong, the recruitment process is often informal, poorly planned and executed.
In many cases, no detailed role profile is evident, no resource partner carefully chosen (or fees negotiated upon), no inclusive recruitment process agreed, and in a few cases, individual references are not are not taken at all.
Why are practices happy to pay extortionate recruitment fees to replace employees, but not to invest that same money into the development and nurturing of those same employees – making it a much harder decision for them to leave? Nurture = loyalty.
The MTD effect on roles
Making Tax Digital (MTD) is bringing us increasingly to the assessment of individuals. We see MTD as a catalyst for reassessing individuals’ roles and indeed dictating future employment profiles for new employees.
Processes and staffing will have to be reviewed/redeployed and, in our view, this is not a situation that is going to sit naturally and easily with most practices.
Speak to us
HR is one of only a few key pillars which fundamentally support a progressive and growing practice. As is highlighted by the paragraphs above, being able to successfully manage talent, innovation, collaboration and engagement across your practice, is quite often directly linked to the leadership given by a small handful of people within the practice.
We focus much energy and resource on leadership, helping our clients to develop their leadership capacity and leadership capital, helping people define themselves as leaders and supplying some practical skills knowledge that will support them in their journey as a leader. Our offering includes:
- Bespoke senior management and partner development
- Ensuring aspiring partners and junior partners understand their role and responsibilities
- 360-degree appraisal and benchmarking
- Arranging feedback from your employees and teams, without this you aren't best equipped to devise strategy
- Coaching and mentoring
- Managing, introducing and implementing team appraisal systems
- Staff and practice skill-set analysis to prepare for MTD and an increasingly digital age
If talent management and leadership are issues for you and your practice, please do come and meet the Foulger Underwood team on stand 490 at Accountex, on 1-2 May. If you’d like to speak beforehand, please email Julia Whistler at [email protected].
Foulger Underwood are a team of M&A and strategy consultants focused on the accounting, legal, trust and corporate service and wealth management sectors.
Evolve into the digital practice event
Nomisma accounting software group is hosting a seminar event entitled Evolve into a Digital Practice.
A spokesman for the company says: "We will be looking to guide through the sense of overwhelm that you may be feeling, when it comes to developing a digital strategy.
"There is so much talk in the accountancy media, about what you should be doing to embrace the cloud, so this morning session, will enable you to see the haze and start understanding how you develop your business."
Speakers at the event on Thursday 21 March at the Jumeriah Hotel, Kensington, London: Sign up HERE
Sumit Agarwal: Founder and chairman of the DNS group .
Dermot Hamblin: 20 years' experience of the UK accountancy scene. From the introduction of software into the sector through the numerous changes since.
The morning event is for accountants in practice, firms of up to 20 employees, who are looking to grow.
Up for discussion:
- The digital world we live and work in.
- What does a modern accountancy practice look like.
- Using Nomisma in your growth plans.
- How to evolve into a smart digital practice.
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Opportunity knocks but most accountants aren’t at home….
As fees for compliance work become more commoditised and clients get fussier about what exactly you are doing to “earn” your fee because their best friend is paying half as much as they are for “the same” work, you can feel somewhat deflated and begin to wonder if there is a future for you in accountancy.
Opportunity abounds out there for those accountants willing to move out of their comfort zone and consider upskilling whereby they can earn higher fees with less client badgering over those size of those fees.
One area that has tremendous potential is advisory work, but what kind of advice should you consider to move into dispensing?
Merger & acquisition (M&A) is a field that most accountants only find out about because one of their biggest fees and largest clients is leaving them due to be being acquired. Unfortunately the accountant has been largely cut out of the process from an earnings standpoint because the client simply didn’t think that the accountant “cut the mustard” beyond compliance.
M & A is often related closely to “corporate finance” and is a busy and crowded field but a lucrative one for accountants who put in the time and energy to focus and grow their expertise locally, regionally or beyond.
It takes on many formats, from grooming firms for sale to acting for buyers, either performing due diligence, searching for acquisitions or assisting with raising finance for deals.
A skilled negotiator can make a name for themselves, especially if they build up expertise in a particular sector where it can be easier for one’s name to spread.
It’s not easy money and it can take time to get your feet under the table but it does generate large fees that clients don’t’ quibble over, because they have a feeling of gratitude to you for assisting them in their achievement as opposed to simply knocking out statutory accounts that adds little value to their lives.
A good starting point is online networking on a platform such as LinkedIn or approaching brokers and agents who may be looking work hand In hand with a firm of accountants to boost their offerings, whether it is number crunching or driving business their way.
Some accountants join a business-builder-cum mentoring type of network or franchise that will give them training as well as exposure to firms that are growing and/or seeking an exit route.
A word of caution. Income can be uncertain and lumpy especially in the early years so don’t give up your day job yet, but build it up as an adjunct to your current practice. Do it right and perhaps you’ll end up selling your own practice to concentrate on the lucrative advisory business you have built up.
The big questions on value pricing ... answered!
Gordon Gilchrist, speaker and writer at 2020 Innovation Training was presenting in Manchester recently and a number of delegates approached him on the subject of value pricing, questioning how best to value price coud based services with their clients...
If you review accountancy firms’ websites and see how cloud-based services are being priced, you will see a number of firms are fixing a Bronze, Silver and Gold tiered service level at varying prices.
What is interesting is that, from a clients’ perspective, the service range looks very similar although the price range is incredible! Prices go from as low as £42 per month up to £8,000 per month, for what appears to be the same service.
This suggests that the client will more likely accept the price that an accountant quotes because the client trusts accountants more than any other professional adviser.
Because accountants have always behaved with the utmost integrity and honesty, we know that clients do accept their analysis and estimate of the fee.
Monthly subscription
The smartest firms seem to be those that are not fixing a fee from the outset for their cloud-based services (whether Bronze, Silver or Gold) but are inviting clients to run the service for three or four months and after that period, there is a monthly subscription quote that is transparent and acceptable to all parties.
Once the process has been run with individual clients for three or four months, the price will vary depending on the clients’ ability to capture data, organise their bookkeeping etc.
More and more firms are now taking their pricing models for their cloud based services off their websites. This is because it is almost impossible to adopt a fixed fee “one price to suit all” pricing policy for this type of service.
2020 have written a Value Pricing Guide to help educate and train accountants on this important subject.
Find out what 2020 has to offer and the benefits of membership
2020 Innovation provides innovative training and marketing solutions for progressive accountants and tax professionals. Members receive support in Business Advisory, Practice Development, marketing, Making Tax Digital, and new technologies, plus comprehensive CPD training in audit, accounts and tax related subjects. 2020’s priority is to help firms grow their client base, expand their service offerings and prosper in the changing environment.
Free webinar with top accountancy adviser Steve Pipe
BrightPay are co-presenting a webinar with the world’s most highly rated adviser to accountants, Steve Pipe.
This fast-paced session on Wednesday, 6 March, at 11am, will show you how to earn enough extra money from payroll to pay off an average size mortgage in five years.
For the first time ever, this brand-new workshop will show you how to make payroll one of your most profitable and strategically important service lines.
It will also give you – completely free of charge - a powerful new step-by-step system for using payroll to win really high-quality new clients and get many more of your existing clients buying payroll services from you.
And it will give you all the other insights you need to make payroll really fly in your practice.
When you attend you will:
- Discover how to make payroll one of your most profitable and strategically important services
- Get a complete step-by-step system for making a lot more money from payroll
- Learn where you can get all the other free tools, resources, training and support you need to transform your reputation, profits and work-life balance
A dynamic speaker, former UK Entrepreneur of The Year and founder of the “Get and Give A Million” movement, Steve’s books including “The world’s most inspiring accountants”, have been described as “masterpieces”, “ground-breaking” and “desperately needed”.
BrightPay: Cloud innovation will be central to the future of payroll services
During the webinar, BrightPay will discuss cloud innovation and how it will be central to the future of payroll services. Be ready to offer a new level of payroll and HR related services by embracing cloud innovation. Find out how to use automation tools to become more efficient, comply with new GDPR legislation and grow your practice.
View webinar agenda | Register for webinar
Hey accountant... are you a trusted adviser?
How much do your clients trust you... and is it enough for them to always take your advice? We hear the phrase ‘trusted adviser’ bandied around a lot but is it representative of client-accountant relationships?
Trust is a sliding scale.
For a start, just because a client asks you to do their tax return, it doesn’t necessarily mean that they trust you. It's simply that you are the most convenient solution for them.
They may trust you as an accountant to do your job and to look after the compliance work, but not necessarily trust your opinion, your advice or even your motives.
Clients will trust you up to a point. The challenge experienced by accountants is that this point is far too often set to low.
Clients will act on your advice up to a point but not far enough for you to achieve the ‘trusted adviser’ status that you strive to be. We want clients to trust us more so that they become more willing to accept our advice and recommendations, good for their business and for ours.
Trust builds over time if we consistently demonstrate that we can be trusted, but frustration builds if there are results we want to achieve in the meantime that take the client beyond their trust point.
Can we accelerate the process?
Trust is built on three things:
- You being true to yourself. Through this comes an honesty, belief and integrity that buys trust from the client.
- You having robust solutions. Your advice and solutions should be able to firmly withstand questioning. Through this comes confidence that buys trust from the client.
- You show empathy. Demonstrating that you understand the client and have their position at heart buys trust from the client.
We can, therefore, accelerate the process of building trust by consistently demonstrating these three traits. Our behaviour and environment need to reflect these. Our points of client contact need to promote these. Our conversations need to be planned to demonstrate these.
Our marketing too needs to be built with these values at its heart. Take a look at your website, your newsletters and your marketing tools. Do these reflect the trust-building assets?
Don’t leave trust to Father Time. Demonstrate to clients your ‘trusted adviser’ status.
FRS 102: How to account for government grants
Government grants are dealt with in FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland in Section 24 Government Grants.
Section 24 of FRS 102 deals with the accounting requirements for all government grants.
The term ‘government grants’ is defined in the Glossary to FRS 102 as: “Assistance by government in the form of a transfer of resources to an entity in return for past or future compliance with specified conditions relating to the operating activities of the entity.
Government refers to government, government agencies and similar bodies whether local, national or international.”
Recognition and measurement
A reporting entity cannot recognise a government grant until the recognition criteria has been met. In order to meet the recognition criteria there must be reasonable assurance that:
- the entity will comply with the conditions attaching to the grant; and
- the grants will be received.
Accrual and performance models
An entity receiving (or expecting to receive) a government grant that meets the recognition criteria laid down in paragraph 24.3A of FRS 102 is required to recognise the grant based on the accrual model or the performance model. This is an accounting policy choice and must be applied on a class-by-class basis. Note – micro-entities reporting under FRS 105 The Financial Reporting Standard applicable to the Micro-entities Regime can only account for grants using the accrual model.
Accrual model
The accrual model of grant recognition will be the most familiar to accountants. This model requires the grant to be classified as either a revenue-based grant or a capital-based grant.
Grants which relate to revenue shall be recognised in income on a systematic basis over the periods in which the entity recognises the related costs for which the grant is intended to compensate.
Example: Capital-based grant
Autumn Ltd (Autumn) has purchased a new item of machinery for £100,000 outright in cash, which has an estimated residual value of £nil at the end of its useful economic life. The machine is being depreciated in accordance with the company’s accounting policy for such equipment, being ten years’ on a straight-line basis with a full year’s depreciation charge in the year of acquisition, but none in the year of disposal.
Summer applied for a government grant towards the cost of this asset and the government have confirmed that they will meet 20% of the cost of the equipment in the form of a grant (i.e. a grant of £20,000). This has been received by the company two weeks’ after the purchase of the machine.
The entries in the books of the company in respect of the new machine and the grant are as follows:
Purchase of the machine
Dr Property, plant and equipment additions £100,000
Cr Cash at bank £100,000
Being purchase of new machine
Dr Depreciation expense (profit and loss) £10,000
Cr Accumulated depreciation (balance sheet) £10,000
Being depreciation of new machine in year 1
Government grant
Dr Cash at bank £20,000
Cr Deferred income £20,000
Being initial receipt of the government grant
Dr Deferred income £2,000
Cr Profit and loss account (other income) £2,000
Being 1/10th of the grant released to profit or loss
It should be noted that paragraph 24.5G of FRS 102 specifically prohibits the value of the capital-based grant from being deducted from the cost of the asset (i.e. Dr Bank, Cr PPE additions) and hence recognising the grant in profit and loss by way of reduced depreciation charges.
This is because such an accounting treatment is incompatible with company law as the statutory definitions of ‘purchase price’ and ‘production cost’ make no provisions for deductions from such amounts.
Performance model
The performance model works by allowing a company to recognise a grant immediately in profit or loss; however, there are certain criteria that have to be considered as follows:
- A grant which does not impose specified future performance-related conditions on the recipient can be recognised in income when the grant proceeds are received or receivable.
- A grant which imposes specified future performance-related conditions on the recipient is recognised in income only when the performance-related conditions are met.
- Grants which are received before the revenue recognition criteria are satisfied are recognised as a liability.
Example – Performance-related conditions met
Winter Ltd has set up a new branch in a deprived area of the country and has an accounting reference date of 31 March each year and chooses to apply the performance model of grant recognition. In order to entice businesses to set up operations, the government have introduced a scheme whereby they will provide a grant to the company once certain conditions have been met. The conditions are as follows:
- The company must be trading to full capacity by 31 December 2018.
- The company must have successfully employed at least 150 people on a full-time basis by 31 January 2018.
- The company must take on at least 25 people under the age of 25 on an apprenticeship scheme.
The company successfully achieved all the conditions imposed on them by the government and the grant was duly received on 26 March 2018.
The financial controller is unsure whether to recognise the whole grant in profit or loss or defer it in the balance sheet.
The company has complied with all its performance-related conditions imposed on it by the government where the grant is concerned. Provided none of the grant is, or may become, repayable in the future, the entire grant can be recognised in income for the year-ended 31 March 2018.
How to build the perfect accounting practice
In 2008 I embarked on a 10-year research project to study what makes the best accountancy practices so successful. That research will result in three books:
The UK’s Best Accountancy Practices (published 2011).
The World’s Most Inspiring Accountants (published 2016).
The World’s Best Accountancy Practices (to be published 2019, when the research is finally finished).
The firms we have studied come from every corner of the world, from sleepy backwaters to city centres. They range from start-ups to long-established practices that can trace their roots back to the 19th century. And they represent independent accountancy firms of all sizes, from sole practitioners to multi-partner firms (although we deliberately haven’t studied the Top 50 firms, as we wanted to discover what works for ‘normal’ accountants).
The 15 drivers of excellence
Diverse as the firms we studied were, what united them was that they were all shining examples of what is possible and how to make it happen. And what we discovered was that what makes them so much more successful than most practices are that they have:
- Better intent: They don’t make excuses or moan about what the world is doing to them. Instead, they take control of their own destiny. Their success is planned and not accidental. They decide what they want, make whatever changes are necessary to ensure that they get it, and persevere when the going gets tough.
- Better decision making: They make conscious, rational decisions, driven by their goals, and informed by facts rather than guesswork or pre-judgement. They do not run away from the need to invest time and money in creating success for them and their clients.
- Better measurement systems: They don’t just rely on traditional accounting measures. Instead, they work out what really matters – what drives their success – both financial and non-financial. They find ways of measuring all those success drivers, set targets, use the results to inform decision making and make people accountable for performance and results.
- Better action: They recognise that one of the timeless keys to success is to do what you said you were going to do, when you said you were going to do it. So they have systems to ensure that action plans are created, recorded, prioritised and implemented. They do not accept lip service, excuses or weasel words.
- Better measurement solutions for clients: They also recognise that profits are a consequence of doing the right things for the right people in the right way. So they start by making sure that their clients also get all the information they need about the numbers that really matter within their businesses, including their success drivers and benchmarking comparisons.
- Better improvement solutions for clients: As well as helping clients to measure the things that matter, they also help them create and implement improvement action plans in those areas. In particular, they help clients create and implement improvement action plans for their profit, cashflow, tax exposure, business value and personal wealth.
- Better alliances: They recognise that it is impossible for any independent accountancy firm to be able to do every specialist piece of work to the incredibly high standard that clients deserve. So they enter into strategic alliances with other specialists who will do the specialist technical work where necessary. Generally, the specialist takes all the engagement risk, and shares the fees generated with the practice in the form of a ‘payaway’.
- Better client meetings: They recognise that meetings are the equivalent of a penalty shoot-out in a soccer tournament – that is, the interaction that makes a profound difference to the outcome and how you are judged. So they make them more professional and dynamic by following carefully planned meeting systems, and using high-impact tools, such as tax planning software ‘live’ at meetings to illustrate key ideas and quantify potential benefits.
- Better proactivity: For them ‘proactivity’ is not an empty promise on their website and in their brochure. They have developed systems to ensure that genuine proactivity, of the kind clients really value, is part of the culture and habits of the firm. They have also discovered that the more proactive they are, the more additional services their clients want to buy from them.
- Better service: They understand what excellent service means to the type of clients they want to attract, and have focused their energy and designed their systems in order to deliver that. They focus on both the substance of service excellence (e.g. speed, accuracy, impact, etc), and on the experiential aspect (e.g. showing genuine interest, using plain English, ‘wow factors’, etc).
- Better clients: They understand that their time is a precious commodity, so they ration it wisely. Rather than try to please every conceivable type of client, they decide the types of clients they really want to work with, and build the practice around them. That way, they attract more of the right kind of clients, and can afford to get rid of the ‘wrong’ kind of clients. Typically, this results in them earning more money, doing more enjoyable work, and having a better life-work balance by working with a smaller number of clients, paying higher average fees.
- Better pricing and cash management: They recognise that the only sustainable way to provide a premium service is to charge a premium fee. They understand that clients hate surprise bills, and so rarely use timesheets for billing purposes. They also understand that, to clients, every bill is a value bill, since the client will not be happy unless it represents good value. So, wherever possible they use value pricing to make it crystal clear that the value far exceeds the fee. And where value pricing is not possible, they use pricing software to generate fixed prices that are acceptable to the client, and fixed price agreements to formalise the arrangement. They also use Extra Work Orders to ensure that extra work is translated into extra fees. And they collect most of their fees by direct debit, often by instalments and usually in advance of completing the work.
- Better team work: They understand that the partners cannot and should not try to do everything. They recognise that leverageable success comes by fully involving the team at every stage. Listening to them properly, and valuing their input. Sharing all the key numbers with them. Trusting them. Delegating most of the work to them, after first giving them the tools, training, systems and support they need to do a proper job. And treating and rewarding them well.
- Better systems : They do not leave things to chance, and they do not rely on their people remembering what to do. Instead, they create systems to ensure that everything can be done to the same high standard, every single time. Technology plays a key role in streamlining and automating these systems. And, of course, they also help their clients to do the same.
- Better marketing: They do not leave referrals to chance, either. Instead, they use referral systems that leverage their time. They don’t just look to clients and bank managers for referrals, they actively cultivate a much wider network of referral sources. They understand that in order to get people telling others about them, they have to create a game the client wants to play, and give them a compelling story to tell. They also test a wide variety of other marketing strategies to find the ones that work best for them.
- Steve Pipe FCA is a leading researcher. Contact him via [email protected] and at www.stevepipe.com