Compliance is dead – long live added value! This new mantra is being promoted by software developers, commentators and accountancy gurus alike.
The new wave of bookkeeping will mean that, apparently, basic compliance will become a thing of the past for accountancy practices as businesses and micro taxpayers settle for the trading figures as provided directly from the software. This means that, in order to survive, accountants must provide this supposed new thing – added value.
So what exactly is added value? Frankly, it’s something every practice I have been involved in throughout my career has been doing. Added value is getting involved with your client’s business to the extent that you understand that business: from how it operates to the principals involved in the business, to the products or services it provides and, of course, the basic accounting systems it uses. It means getting involved with the owners of the business to understand their motivation, their goals and aspirations, the timescales they have established (if any) and their family and background. These really matter to the owner and may well be the reasoning behind their decision making.
Frankly, any accountant worth their salt will not need me – or any business guru – to tell them any of this because it is that basic. Only by genuinely understanding your client can you help them in any way beyond the obvious compliance; namely, a correct set of accounts, a correct and timely understanding of their taxation liabilities and adherence to laws, rules and regulations that affect their business.
How you, the accountant, develops the relationship beyond the compliance norm depends on the clients themselves and the set-up and qualities available to you in your practice. There are myriad tools out there to help you and, of course, our accountancy training provides us with the ability to extract untold reports, ratios and information from accounting records. We were tested on them at various stages in our qualification process and we have them stored in our mind for whenever we need them. We can use ratio analysis to help us in our work; we can use charts to help de-mystify some of the science behind our work to make it more understandable. But whatever we use or produce, it must be client-specific and of use to the business.
A report full of lovely colours and beautifully designed that nobody reads, understands or more importantly wants is a waste of time. An accountant who routinely sends out reports and charts to their clients simply because they have software that pulls them together at the press of a button is not only NOT adding any value to their clients, it is actually turning them off the use of quality reports and schedules that could be of use as they cannot discern the wheat from the chaff. Every bookkeeping package provides a seemingly endless list of reports that can be extracted by the software from the records the software has. The new generation of specialist software that ‘added value’ gurus are promoting is adding even more and at the same time using graphics and animation to make them visually stunning – and so it goes easier to understand. All of which is useful and may well be of help in some cases.
Where this is of no use is if the client doesn’t want or need them, doesn’t recognise the message you are trying to promote, and sees them as simply a way the accountant is trying to increase, or worse, still justify their fees.
We must never underestimate our client’s knowledge and ability and providing them with wonderfully designed reports that add nothing at all to their understanding only adds to their feeling that YOU, the accountant, doesn’t understand them or their business. Providing countless reports every quarter or (worse still) every month simply because the march of the cloud and AI has given you the ability to do so can actually cost you a client – even if you think they look incredibly cool.
Please don’t get me wrong, I am not for a moment saying that we do nothing, but what I’m advocating is that we can only add value where value is actively being sought. The march of AI, good quality cloud accounting and HMRC’s digital agenda will mean that for many of us compliance work and bookkeeping especially will become easier, cheaper and more up-to-date. This will enable us to provide a greater range and better quality service, but a report that nobody reads or wants is not the way forward.
Know your client first and foremost. If you want what’s best for them everything else will fall into place – including added value.
• Tony Margaritelli, Chair, ICPA
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