Should you fear your accountant?
In a study of the most feared professions, accountants and bookkeepers rank the second highest, just behind chefs, waiters and bartenders in the hospitality industry. Gordon Ramsey has got a lot to answer for. And yet at the same time, accountants are one of the most trusted people in society. However, based on the statement above, this could naturally be fear masquerading as trust.
And why shouldn’t you trust your accountant? After all, accountants are the gatekeepers to your business’ finances and figures, they’ve passed numerous qualifications, belong to governing bodies and have adhere to strict codes of conduct. If you can’t trust your accountant, we might as well all pack up and call it a day.
Accountants have had it good for a long time. But those days are over
The problem is that accountants have had it good for a long time. Although we have had the rise of the internet, it’s not really until the last 5 years or so that the web and technology has started to have a dramatic affect on how accountants operate and earn fees. The days of charging high fees for a standard accountancy service are over. Why? Because technology can do a lot of the heavy lifting that has in the past had to be done by accountants.
Accountants are still trying to swim against the raft of technological advancements
What’s baffling when we speak with potential clients is that actually this world of paper ledgers, boxes of files and just paper in general, still very much exists. Accountants through fear, ignorance, arrogance or all of the above, choose to do the heavy lifting because it’s the way they’ve always done it and it’s a way of generating income.
If an accountancy firm is failing to fully embrace technology, not only is that firm running the risk of being extinct in a few years, the knock on effect is that the client misses out on all the extra service and added value that could be given had the accountant decided that there were quicker and better ways of doing particular tasks.
Why would a business owner really have reason to believe that things could be better?
This is where the problem lies. With trust or perhaps fear of their accountant or bookkeeper, business owners are in full belief that their accountant is right and they’re wrong. A business owner could have been with a particular firm for 5, 10, 15 years, paying £2,000-3,000 a year because that’s what happens and the way it is. Why would a business owner really have reason to believe that things could be better?
I met with a potential client yesterday who was looking to move to a new accountant. She wanted to use Quickbooks to manage her finances in a more efficient manner. Her current accountant would only “allow” Quickbooks to be used as a tool to manage her finances on the basis that year end work was printed out and delivered to the firm.
It’s bizarre for a few reasons (I mean, why not just email the year end files? Why not just use Quickbooks? Why create more work?), but surprisingly it’s a story that’s not uncommon.
45% of accountancy firms believe practices need to go digital to survive. Let that sink in. More than half of accountants are happy to stick with their boxes of files and paper ledgers. In fact, 18% of accountancy firms are still using paper ledgers today.
Just to be clear, it’s an absolute pain to work in this way! And if it’s more difficult, it means the time it takes to complete a piece of work is being passed onto the client. Furthermore, it should be the accountant suggesting to move to Quickbooks, rather than the client.
Accountants should be working with their clients to deliver a faster service, more value and cost savings. When clients leave these firms who are late adopters to technology and the cloud, they’re not recognising that the reason is because they are behind the times. From an accounting perspective, these accountants may be chartered and technically sound, but it doesn’t detract that the service offered is dated and actually from a client’s perspective, these aspects don’t really matter.
Business owners shouldn’t fear their accountant (dare I say they shouldn’t trust them too?!). If you feel like there’s a better way of doing something, it’s most likely because there is. Challenge your accountant – it makes for a far healthier relationship. However, if you find yourself querying your accountant regularly I would question whether you have chosen the right advisor!
The only reason you should be fearful of your relationship with your accountant is if you recognise that they’re late adopters to technology, because as a result your business is being held back. Like any profession or industry, there are businesses that lead and our sector is no different.