Setting a Goal for True Client Collaboration

Transcription

1 Setting a Gal fr True Client Cllabratin Hw t build a better client accunting mdel By Darren Rt, CPA, CITP, CGMA Managing Partner, Rt & Assciates, LLC CEO, RtWrks, LLC

2 Table f Cntents Intrductin... 3 Building a Better Mdel First Steps... 4 Key Terms... 4 The Ideal Mdel - Cllabratin is the Gal... 5 Putting the Pieces Tgether... 6 Step 1 Start with a Client Inventry... 6 Step 2 Select the Right Technlgies... 6 Step 3 Getting t a Defined Mdel... 8 Step 4 Refine Yur Mdel... 8 Executing Yur Mdel... 8 Cnclusin

3 Intrductin The client accunting mdel has evlved a great deal ver the years. In fact, ver the span f my 30-year career, the prfessin has transitined frm a cmpletely paperbased mdel t ne that supprts a highly efficient digital wrkflw. Hwever, smewhere alng the way, the accunting firm has lst cntrl f the prcess. Tday, there is a better client accunting mdel ne that supprts maximum efficiency and puts the accunting prfessinal back in cntrl. Let s lk back fr a mment. Years ag, the client accunting prcess typically included such items as cash register receipts, paper sales tickets, handwritten checks, and black binders that hused jurnal entries and the general ledger. Yu might als recall that financial statements were typically banged ut n an IBM typewriter. Jurnals and ledgers were generally maintained in the accuntant s ffice, while clients were respnsible fr generating surce dcuments. Despite a slw and paper-heavy prcess, this mdel allwed the accuntant t cntrl the general ledger therefre cntrlling the client accunting prcess. In the 1980s this all changed with the advent f persnal cmputers in small businesses (SMB). SMB-friendly applicatins like QuickBks made their way int mainstream American businesses, allwing wners t handle accunting tasks. What evlved was a generatin f SMB wners (thse withut the necessary accunting skills) wh tk cntrl f their general ledgers. Write-up services ver the next 20 years cmpletely changed fr accunting firms. The accunting prfessinal went frm having cntrl f the general ledger and perfrming after-the-fact data entry t receiving data files frm clients that required a great deal f clean up. Many traditinal write-up clients felt that the infrmatin they created within their accunting applicatin was substantial. Tday s firms are all ver the bard in relatin t prcess. Sme clients drp ff backup data t the firm, ther clients use a firm s prtal slutin t exchange data, and still ther clients have their accuntant cme t their ffice and make adjustments while n site. Once data is received, sme firms re-key data, rendering the client s data file bslete. Other accunting prfessinals make adjustments t live data and return the file t the client, and thers will make adjustments t data and then return adjustments t the client. With any f these scenaris, the prcess is inefficient and carries great risk fr errr. 3

4 This evlutin in prcess cntrl has created a majr challenge fr accunting prfessinals, and a reslutin is required. This white paper ffers infrmatin n building a better, mre sustainable client accunting mdel. The fllwing areas will be addressed in detail: Building a Better Business Mdel First Steps Putting the Pieces Tgether Executing Yur Mdel Building a Better Mdel First Steps Over the past 20 years r s, many changes t the accunting prcess have been histed n the prfessin and as a grup, we have nt adapted well. This is nthing new, hwever. Accuntants are very busy, and simply dn t have time t step back and create a strategic business mdel and then execute it t an entire client base. It s an nging struggle. What firms require is a well-dcumented and tested mdel, which is utlined in the remainder f this white paper. This is nt t say that establishing a strategic client accunting mdel wn t take time and effrt; it will. Hwever, with a better understanding f hw t mve frward, the transitin will be easier. Key Terms Befre diving int the prcess steps, it is first imprtant t understand a few key terms t ensure that everyne is n the same page: Bkkeeping A service where the accunting firm initiates the surce transactins fr the client: typically accunts payable, payrll, general ledger, financial statement preparatin, and tax cmpliance services. Write-Up A service where the client initiates the surce transactins and has the accunting firm (typically mnthly r quarterly) manage the general ledger, prepare financial statements, and prvide tax cmpliance services. The accunting firm usually prvides payrll services in cnjunctin with the write-up service. Annual Business A service where the client maintains accunting recrds year rund and the firm annually prvides clean financial recrds, and smetimes financial statements and tax cmpliance services. 4

5 Befre implementing a strategic client accunting mdel, it s critical t evaluate yur verall client base. By reviewing yur clients, yu get a clear picture f current services ffered and hw they are being perfrmed in yur firm. Think f this step as taking inventry f yur clientele. Once yu understand wh yu are serving and their needs, yu will be better equipped t implement a prper mdel. The Ideal Mdel - Cllabratin is the Gal I want t be clear that it is the accunting prfessinal that shuld design the client accunting mdel. And fr mst firms, this is nt the case. In fact, if yu really lk at the services yu are perfrming, it s mre likely that yur clients select their wn accunting sftware and prvide yu with data at their discretin data that is all t ften in disarray. This des nthing but create chas fr firms, yet mst firms allw this prcess t cntinue. It s time fr a prper mdel ne that supprts a cllabrative prcess and puts the accunting prfessinal back in the driver s seat. Ideally, we want t cllabrate with ur clients in a cmmn data file. This means n mre passing data files back and frth. Instead, firms have 24/7 nline access and the ability t wrk within the client s data whenever needed. This als eliminates waiting n clients t prvide the data required t cmplete wrk. Cllabratin with Clients As we think abut ur service fferings, we begin with the cmmn gal f designing services t supprt cllabratin with ur clients. This means selecting the right technlgies t supprt this gal. M. Darren Rt, CPA, CITP, CGMA Managing Partner, Rt & Assciates T take this a step further, the ideal mdel als ffers immediate access t a client s surce dcuments. Imagine hw easy this wuld make adding fixed assets t depreciatin schedules r lcating needed items such as lan infrmatin in real time (instead f waiting fr the client t fulfill the request). Finally, cnsider the value f delivering the client s financial statements instantly via prtals n the firm s website, ffering elevated client service and cnsistently prmting the firm s brand. A majr flaw f tday s accunting prfessinal is a desire t be all things t all clients. T run a highly efficient practice, this is nt pssible. As the accunting prfessinal, it is ur duty t lead clients in the directin they shuld g, and that includes supprting a client accunting mdel that allws the firm t define a standardized prcess. If yu are t apply the mdel ffered in this white paper, yu must accept the rle f leader. 5

6 Putting the Pieces Tgether It s nw time t review the individual pieces f the mdel. This sectin ffers a step-bystep apprach t the client accunting mdel used within my wn firm, Rt & Assciates LLC (Rt). Step 1 Start with a Client Inventry At Rt, we started by taking an inventry f ur business clients. T rganize, simply create a new Excel spreadsheet. List all business clients in the first clumn (be sure t leave rm at the tp fr headings). Als, separate bkkeeping, write-up, payrll, and annual business clients int individual sectins. Acrss the tp f yur spreadsheet, create headings that represent the slutins yur clients are using and where that slutin is lcated. Fr example, if the client is using QuickBks n their wn cmputer, be sure t nte this infrmatin. If the client is maintaining paper cpies f their dcuments in file cabinets, nte that as well. Step 2 Select the Right Technlgies Based n the cre tenet f leading ur clients, ur firm researched several slutins and technlgies that wuld allw us t easily cllabrate with clients, while maintaining the leadership rle. The fllwing are the technlgies researched and selected t be part f the Rt system. Hsting and Clud-based Slutins We identified that mst f ur small business clients used QuickBks, which wrks well if managed by a trained prfessinal. By ffering QuickBks in either a hsted envirnment r using QuickBks Online (the Clud versin), bth the client and accunting prfessinal have immediate, real-time access t data and can easily cllabrate n wrk. Take Yur Time Putting the Pieces Tgether Time, effrt, and patience are required when implementing a new client accunting mdel. Fllwing a structured set f steps will help keep yur firm n track and ensure prper fllw-thrugh. M. Darren Rt, CPA, CITP, CGMA Managing Partner, Rt & Assciates Mving client accunting sftware t a hsted envirnment r t the Clud is a game-changer. It means that firm staff can access and clean up client data when needed instead f waiting fr backups. It als allws staff t access current infrmatin t perfrm tax prjectins. And the list f benefits ges n. 6

7 Paperless Dcument Strage T ensure immediate access t client data, dcuments must be tied t the client accunting system in use. We identified that ur dcument strage applicatin had t be in the Clud and seamlessly integrate with the client accunting slutins in use. The fllwing are three f the prfessin s leading Clud-based dcument strage systems that are part f the Rt mdel: QuickBks Dcument Attach Feature allws yu t directly attach dcuments right in QuickBks. SmartVault supprts full integratin with select client accunting systems enabling ur firm t access client dcuments frm within either system at any time. Bill.Cm supprts a paperless accunts payable and accunts receivable prcess fr clients. Tight integratin with the client accunting sftware supprts a true paperless wrkflw prcess. Paperless Payrll System With s many technlgically advanced payrll slutins available, payrll represents a lucrative revenue stream that requires little supprt t execute. As such, Rt added payrll t ur list f cmprehensive, client-required services. When selecting a payrll slutin, cnsider the fllwing attributes: Data Gathering is a feature that enables clients t lgin and perfrm such tasks nline as entering payrll hurs, applying emplyee changes, and adding new emplyees. Paperless Prcessing is a functin that allws seamless transfer f data, eliminating manual re-keying. Other imprtant functinality that will supprt a standardized wrkflw includes direct depsit and paycards. Dcument Delivery is a functin that supprts seamless delivery f files, including emplyee paystubs t secure nline emplyee prtals and reprts t the client s separate prtal. Prtals Delivery is a critical cmpnent f the client accunting mdel, supprting efficient, effective cmmunicatin with clients and driving them back t yur website time and time again (building brand lyalty). Prtals supprt realtime, nline distributin f client files. Depending n the prtal slutin yu chse, functinality ranges frm simple dcument delivery t secure file exchange and integratin with payrll sftware fr nline time entry. 7

8 Step 3 Getting t a Defined Mdel After identifying the right technlgies t supprt yur internal wrkflw, g back t yur Excel dcument and create a new set f clumn headings that indicate the slutins yu feel best serve yur client base. With this added infrmatin, yu nw have the big picture, ffering cnslidated infrmatin n all yur business clients by type, an inventry f slutins clients are currently using, and a draft f the slutins yur firm requires. This serves as the initial draft f yur new business mdel. Step 4 Refine Yur Mdel The next step is t implement yur newly develped mdel. Dn t expect everything t run smthly right ut f the gate, hwever. Knw that it will take time and effrt t get yur firm running efficiently. Over the next few mnths, yu will need t evaluate yur mdel, identify issues, and wrk t apply needed reslutins. Take the time required t wrk ut the kinks befre executing yur client accunting mdel t yur entire client base. Executing Yur Mdel Designing a business mdel is the easy part; executing the mdel is where the rubber meets the rad. At this pint, yu have yur mdel defined, have wrked ut the kinks with yur staff, and are ready t execute. It s best (and easiest) t start with new clients, s as yu meet with prspects, articulate yur new mdel and the value it ffers. One key bstacle t mentin is price. Despite the lng list f benefits yur new mdel ffers clients including anytimewhere access, regular data backups, and the cnvenience and efficiency ffered via an nline prcess ultimately, clients will ask: What des it cst? With this in mind, be sure t think thrugh yur pricing strategy befre executing. Cst is where mst firms fall dwn. Befre speaking with clients, assess the cst f adpting yur new mdel and build that cst int a fixed service fee. Articulate t clients that the nline slutin is free, while the fixed fee cvers the cst f accunting services prvided. Clients wn t say n t free! Dn t Lead with Cst When executing a business mdel, take the cst f adpting yur mdel ut f the equatin. Dn t prvide the client with the pprtunity t say n. M. Darren Rt, CPA, CITP, CGMA Managing Partner, Rt & Assciates 8

9 Here s a little mre n adapting yur pricing mdel accrdingly. Within yur fixed fee, yu must include the csts f executing yur business mdel. Fr example, under a set fee, yu ffer the current versin f their client accunting sftware. Additinally, the sftware is hsted in a secure data center and supprts 24/7 access and the ability t cllabrate in real-time with an accunting prfessinal. Als indicate that the client will have access t their wn private, secure prtal where they can access sftware and financial dcuments such as financial statements, tax returns, and payrll infrmatin whenever needed. D nt expect every current r new client t willingly adhere t yur new mdel. Ultimately, yu have t identify thse that are nt a gd fit with yur mdel and eliminate them. Yu cannt lead yur clients if they refuse t be led. While I realize this is a hard cncept fr many accunting prfessinals t accept, it is critical if yu are t be successful in running a highly efficient firm where all clients fllw a unifrm prcess. Once yu have a handle n executing the new mdel within yur new client base, yu can begin transitining yur existing clients. Dn t expect this t happen vernight. It may take anywhere frm tw t three years t get all clients mved ver. Als, dn t limit yurself t just ne set f clients (e.g., bkkeeping). Apply yur new mdel t all yur clients, including write-up and annual business clients. Remember, a standardized mdel applied acrss the bard enables yu t cntrl the prcess ffering such benefits as getting a jump start n data clean up, preparing tax returns much earlier in the seasn, and mre. Be sure t cntinue t revisit the spreadsheet, which is where this all started. In my firm, we cnsistently went back t the spreadsheet t track prgress. Trust that nce yur transitin is cmplete, yu will lk back with great satisfactin. I can assure yu f this because I did it in my wn firm. 9

10 Cnclusin By fllwing the steps prvided in this white paper, yu can begin yur transitin t a mre efficient and prfitable client accunting mdel. It will take effrt and a significant time investment; hwever, nce yu ve cmpletely implemented yur new and imprved mdel, yu will begin t see the value in the way f efficiency, revenue, and client satisfactin. It all starts with planning. Take yur first step tday. Abut the Authr M. Darren Rt, CPA, CITP, CGMA As the president and funding member f Rt & Assciates, Darren has mre than 25 years f practical tax and accunting experience. His frward thinking has kept his firm at the frefrnt f the prfessin applying leading technlgies and best practices that supprt a highly efficient and streamlined business. Darren is als CEO f RtWrks, a membershipbased cnsulting firm dedicated t educating small and mid-size firms n technlgy, practice management, marketing and branding, and mre. Darren c-authred The E-Myth Accuntant with business guru Michael Gerber and was named t the Tp 25 Mst Influential Thught Leaders list in 2011 and He als serves as Executive Editr f CPA Practice Advisr and is a regular guest lecturer at Indiana University s Kelley Schl f Business. Darren hlds CPA and CITP (Certified Infrmatin Technlgy Prfessinal) credentials. He is a frmer AICPA CITP Credential Cmmittee Bard member, and has served n the Bard f Directrs fr the Indiana CPA Sciety. 10