In a world where time is money, it can feel like a double-edged sword when efficiency is deemed the only measure of success.
For all accountants, providing compliance services is still a necessary part of the job, and will be up until the day we no longer need to lodge tax returns. It is a required service, and one that accountants should charge for. However, as technology continues to speed up the rate at which such tasks can be completed, the issue of perceived value comes into play.
For many accountants, they believe that because it takes less time to do, they should be charging less for the service. Wrong. It is still a valuable service.
On the flipside, SMEs whose relationship to their accountant is limited to having a tax return done at year end begin questioning the value of getting said tax return ‘lodged’. Surely, based on an hourly rate, the service merits a reduction in fee, right? Wrong.
SMEs looking for fee reductions simply don’t understand where the value in compliance service exists. But that’s often because their accountant has omitted to ever explain it to them. And that issue brings the true role of an accountant to the fore.
Accountants aren’t just number crunchers, they are relationship builders.
Moreover, accountants are usually humble beings who struggle to communicate what their value proposition is. But every accountant will agree, there is plenty of value in keeping your clients compliant with the ever-increasing number of tax laws.
The situation we see now is very different to the previous move from paper to computer prepared tax returns; back then not every accountant had access to technology so readily. Accountants now, though, have greater access to automated systems, and technology is an everyday part of the industry.
So, whilst there is talk of the profession ‘adapting’, the speed at which it is happening is one hundred times faster than was previous. And rapid change creates uncertainty. But there is no need to fret just yet.
To leverage the automation onslaught, accountants need to look at it from a few new angles:
Firstly, equip yourself with the best tools available. You need to be streamlining the internal workings of your business to ensure you can prepare tax returns as efficiently and accurately as is possible. In reality this will not actually be the technical part of completing a tax return – the legislation is not getting any smaller. Instead, significant time can be saved during the ‘before’ and ‘after’ parts of preparing a return, whether that be individual or business:
- Be organised. Use programmes such as Box, Dropbox or Google Drive to collect data and share folders, and encourage your clients to do the same by introducing password encryption on confidential files.
- Use Xero files. Encourage your clients to do the same with relevant end of year documents, such as loan contracts, invoices for asset purchases, etc.
- Use receipt management apps like Receipt Bank for all clients.
- Encourage clients to use apps, such as MyProsperity, to load all their tax data, and do much of the legwork work for you.
Reward the clients who get on board with a discount. That way, you can offer a fee reduction without damaging your perceived value. And use the time saved to either provide other value-add services to that client, or even take on more tax returns with the same level of input.
At the other end of the workflow the focus is on streamlining the client approval and lodgement process. You need to be using an electronic or digital signature service for your clients to approve and sign the returns for lodgement.
With regards to filing saved returns, finding a solution that integrates with your tax software and e-sign software to auto file the authorised copy of the return will also save significant time. If you can save anywhere between 10-20 minutes per lodgement, across 1000 lodgements that equates to a significant time saving.
And lastly, comes payment. With multiple payment options now available, trust accounts are being used less frequently as the administration burden can outweigh the benefit. If you’re not collecting your fees via a trust account, be sure to use online invoicing and make it easy for your clients to pay you. You don’t want to be waiting months for a $200 fee nor spending resources chasing it. EFT, credit cards, PayPal and Stripe are all common payment options these days. And if possible, choose a payment gateway that links to your accounting system so that invoices are automatically reconciled when paid by the client.
By streamlining the compliance workflow, you’ll be in a great position to cope with any downward fee pressure. You can also educate your clients on the efficiencies of your processing system, and illustrate that their fee is being paid for quality client experience and expertise, rather than menial ‘lodgement services’. Likewise, for business owners, they will understand they are paying for your knowledge and skills in minimising their overall group tax position.
A little investment of time goes a long way in business, for both you and your clients. And from a long-term perspective, it will help with client retention, as well as cement your current revenues.