There are just some conversations that accountants and bookkeepers don’t like to have with their clients. And, according to Ignition’s "2022 State of Client Engagement" report, not having those conversations is not helping.
According to 95% of accounting professionals surveyed in the report, by putting off awkward client conversations, 40% say their mental health has suffered as a result. And if that is not enough, unrecoverable out of scope work is costing US firms on average $76,636 each year.
The "2022 State of Client Engagement" report is helping shine a much needed light on the financial and human cost to accounting and bookkeeping firms by avoiding or delaying awkward client conversations. Conducted by YouGov, the study interviewed 506 key decision-makers in accounting and bookkeeping firms with one to 50 employees in the US.
We sat down with Matthew Kanas, head of AMER at Ignition, to get a deeper dive into why mastering awkward conversations can make a difference across the board.
What are some of the takeaways from the study that accounting professionals should pay attention to?
Awkward client situations are a mainstay of the professional services industry. In the US, 88% of accountants and bookkeepers said they have delayed or avoided having an awkward conversation with a client.
For 94% of accountants and bookkeepers, chasing clients for late payments is the most common awkward client situation that they encounter almost once a week on average. This is closely followed by clients not being billed for unrecoverable, out-of-scope work with the majority (90%) of accountants and bookkeepers encountering this.
Avoiding or delaying awkward client conversations is the norm. No one likes to feel uncomfortable, particularly accountants. The “2022 State of Client Engagement” revealed that two in five (38%) respondents have written off all or part of an invoice to avoid having an awkward conversation with a client in the last 12 months.
With top barriers to having an awkward conversation include:
- 39% are concerned about the clients’ negative response or reaction
- 34% lack the information needed about the agreed-upon scope
- 34% lack the skills to negotiate with clients
The report also highlighted the high and irreversible human cost of avoiding or delaying awkward client conversations. As a result of avoiding or delaying awkward client conversations, many accountants and bookkeepers report it has contributed to poorer work-life balance, high levels of stress, and even burnout in the workplace.
Two in five (40%) respondents said it has had a negative impact on their mental health and other staffs’ mental health in the practice.
What can firm leaders learn from these takeaways?
Although the "2022 State of Client Engagement" report revealed surprising statistics about accountants and bookkeepers avoiding awkward conversations. It is important for accountants and bookkeepers to know that there are tools, like *Ignition, to help champion them to overcome these awkward and sometimes challenging moments.
An example of this is Marie Phillips, CPA and co-founder of Connected Accounting. Since implementing Ignition to engage clients and automate billing and payments when she launched the business in 2019, Marie has put an end to awkward conversations about getting paid.
Today, Phillips has grown the business to 14 employees with no accounts receivable.
Overall, it is critical for all business leaders to educate themselves on the tools that are readily available that can help streamline and automate unnecessary and time-consuming elements of work.
When it comes to client engagement, how can accounting professionals get better?
With new ways of working and technology, there are new ways for accountants and bookkeepers to streamline their processes and focus on client engagement.
A few tips that could help professionals as they engage more with their clients include:
- Take the time to listen — Invest the time upfront to understand and clearly scope your client’s requirements
- Anticipate change — Make provisions for out-of-scope work to set expectations that it will incur additional costs
- Communicate regularly — Regularly review and address any changes in scope with the client early on.
- Implement tools to help streamline processes — With the right tools, accountants and bookkeepers can get on the same page as their clients right from the start and face these eliminating and drastically reducing awkward situations like out-of-scope work head-on.
Where can professionals improve when it comes to areas like having awkward conversations?
It’s important to start the client relationship on the right footing to minimize surprises and set both the client and business up for success. This means using industry-vetted templates, setting clear expectations on deliverables, value, and service, communicating and checking in regularly with the client to identify areas of potential conflict, and eliminating friction in the payment experience.
What can accounting firms do to prevent issues like low morale, being overworked, etc.?
Set clear expectations. Don’t start work without a signed engagement, so you and your clients are on the same page on the deliverables and value from day one.
This will avoid a lot of headaches for both the accountant and the client and creates confidence in both parties for expected deliverables.
Automate processes where available and necessary: Use technology to create a cohesive and organic work process. Eliminate the friction of antiquated processes and time-consuming tasks to help get accountants back to what they love doing: furthering their relationships with clients and getting paid.
How important is it to pay more attention to the mental health side of the profession?
Mental health is just as, if not more important than financial. Poor mental health can be devastating to workplace morale, productivity and the bottom line.
As a result of avoiding or delaying awkward client conversations, many accountants and bookkeepers report it has contributed to poorer work-life balance, high levels of stress and even burnout in the workplace.
The "2022 State of Client Engagement" revealed that two in five (40%) said it had a negative impact on their mental health and other staffs’ mental health in the practice. In addition, 30% of respondents confirmed that staff had quit and they had difficulty retaining staff as a result.
When it comes to enhancing the proficiency of these day to day responsibilities, what advice can you offer today's accounting professionals?
As the report shows, with 90% of firms absorbing out-of-scope work, accountants and bookkeepers have to focus on increasing the efficiency of their day-to-day responsibilities and workflow. Tools like Ignition can take the responsibility for daily administrative tasks like tracking payments, reviewing invoices, and more.
And it works. Through implementing tools like Ignition, Phillips has not only frontloaded her payments, ensuring she is getting paid on time, but has streamlined time-consuming processes and recouped up to 20 hours a month.
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