By Julie Lubetkin, VP of Strategic Partners
Are your clients struggling with in-house, paper-based bookkeeping? If you do not know or have not asked, you could be missing a great opportunity to expand your practice as well as strengthen your quality of client services.
Oftentimes, small and medium-size businesses may not be aware of just how much time and money go into handling their own bookkeeping. Paper-based bookkeeping is traditionally considered a high-labor and time-intensive activity, and most business owners have not fully tracked its impact on their company’s resources. Outsourcing bookkeeping can yield high-priority benefits for your clients for accounts payable, accounts receivable and cash flow management—especially when you introduce them to cloud-based technology.
However, let’s take one step back. Encouraging your clients to outsource their bookkeeping to your cloud-based environment not only helps them but also offers your accounting firm multiple benefits. Adding a new practice to your firm allows you to bring in more money. It also sets your firm apart with diversified services while allowing you to retain and grow existing client relationships. Finally, it positions your firm as a true technology leader that can introduce new important technologies that help clients gain greater insight into their business performance.
With the benefits evident for both your firm and your firm’s clients, here are three ways you can help clients migrate to outsourced bookkeeping.
1. Address the Challenges
When business owners consider the numerous steps involved with in-house bookkeeping, the time constraints and labor requirements are somewhat staggering. Issuing and reconciling bills can mean sorting through files (or documents to be filed) for contracts and relevant information. Paper-based invoicing, which depends on printing and stuffing and adding postage to envelopes, can drag an accounts receivable process into long windows of time. Even check approval involves multiple steps from requesting approval on payment to check runs and beyond. The entire process is absolutely littered with administration-heavy tasks that eat up valuable time that could be focused on higher-yield activities.
Not only is bookkeeping a time stealer, but the costs around it can be oppressive. One study estimates that the average cost to pay a single bill across an organization is $92*. This takes into account everything from labor to postage. How many bills do your clients pay? Based on this number, what is it costing their businesses to keep this process in-house?
There are ROI calculators that can show clients exactly what level of savings they can attain by utilizing business-specific requirements such as wages, the number of checks processed each month, ACH transactions per month, the number of bank accounts, and payment runs per month. After analyzing the information, they can calculate current costs and how much can be saved with outsourcing. A useful tool such as this can be invaluable in pointing out the constraints around bookkeeping and open the door for a conversation about outsourcing.
2. Assess the Opportunities
Now that you have your clients’ attention about the challenges of in-house bookkeeping, it is time to help them understand the opportunities that exist when bookkeeping is outsourced. And these advantages yield the largest benefits when your clients not only outsource bookkeeping but move from paper-based bookkeeping to cloud-based bookkeeping.
Simply by eliminating or reducing paper, a plethora of opportunities evolve including streamlining processes, promoting collaboration, enabling mobile access, and reducing costs.
For accounts payable, your clients will have the ability to go completely paperless and introduce automation. They can upload bills and paperwork to a centralized, cloud-based repository. By storing contracts and bills in the cloud, they can eliminate the time wasted in digging through filing cabinets. Additional financial information—such as due dates, cash flow projections, and the tracking of approvals and bill payment based on the company’s schedule—will also be stored and accessible online. Automated notices will remind them of when a payment is due. They will also have immediate insight into the approval status of bills.
For accounts receivable, invoices will now be mailed or emailed on a company’s behalf. All of the sudden, the hassles and costs of printing, postage, and mailing are eliminated and replaced with a few approving clicks. Migrating payments online will give clients more options including receiving payments online, via credit card, through PayPal or directly from a bank – meaning no more filing and trips to the bank. Automatic due date reminders are delivered straight to vendors. Most important, these process enhancements will allow clients to collect receivables two to three times faster than with paper-based processes.
Share these real opportunities with your clients and it will help pave the way to onboarding new revenue-yielding services.
3. Accomplish Results
Congratulations! Your clients have agreed to outsource bookkeeping to your accounting firm. But, as with any “win,” the real value is evident with careful follow-up and measurement. Encourage your clients to evaluate the results of moving to outsourced, cloud-based bookkeeping by the following measures:
- Time and cost savings: How much time and money have clients saved by outsourcing bookkeeping and going paperless? Has the timesaving allowed them the bandwidth to focus on other activities? Help each one take a long look at the process before the cloud and after. The results will be obvious and impactful.
- Convenience: After migrating to the cloud, ask your clients what improvements they have seen in terms of convenience. For example, by adopting the cloud, conveniences such as mobile access, collaboration, and automated workflows will certainly be apparent.
- Important financial insight: Has outsourcing bookkeeping and eliminating paper provided a more comprehensive picture of the company’s cash flow and overall financial health? Cloud-based features such as a collaborative, centralized hub of information can yield important high-level and real-time reporting on such issues as cash flow, business performance month-to-month, strengths and weaknesses.
By educating your clients on the challenges of in-house, paper-based bookkeeping and the opportunities provided by cloud-based technology, you will inevitably help them save not only time but money. And those are two very important components of successful growth. More important, you are positioning yourself as a technology leader and building strong ties with clients. By working with clients to outsource their bookkeeping, you are not only reinforcing the strength of their businesses, but also your own.