Five ways to convince clients to move to digital record keeping

Recent research from HMRC found eight in ten VAT mandated businesses are aware of MTD, hearing about it most commonly through a tax agent or accountant.

Awareness is just the first stepping stone in the digital journey. Businesses know the legislation is coming, but IRIS has found three in five (61%) of practices believe the greatest challenge is to move clients to bookkeeping software. So, what’s the best way to convince clients to move to a digital bookkeeping platform?

Regardless of whether businesses are VAT registered or not, bookkeeping software will be a fundamental tool in the future. Nick Gregory, chief marketing officer of IRIS Software Group, highlights five ways to convince clients to move to digital record keeping.

1. Don’t show the elephant

Introducing new software can feel akin to eating an elephant. It’s long trunk; large, floppy ears and wide, thick legs look too daunting to eat in one go. It can be equally as formidable for a business when being told of the impending legislation. So firstly, focus on a specific business issue.

Matthew Rawles, partner at GCSD Accountants found success showing receipt digitisation to a client. “Managing receipts is often a huge point of pain for businesses. Whether they are thrown in a shoe box until the end of the financial year, or you hear of the monthly chore documenting them, they cause anguish. Start the digital journey by show the client how to photograph a receipt. Once they are comfortable with receipt digitisation, move on to sales and purchase invoices.”

Industry apps such as IRIS Snap process the data into a format that can be published directly into bookkeeping software such as KashFlow. This could be the first or only step of digital record keeping but either way, both the client and accountancy practice benefits from the move.

2. Build on the bright spots

To focus on what’s working well for a client can be perceived as counterintuitive. Interactions with clients tend to focus on the problem and needs analysis which informs the best route for advice. It’s human nature to focus on the negative but sparking hope and showing what’s possible is a positive experience. So, spend time scaling success.

Replicating bright spots could include the introduction of a bookkeeping app to generate invoices. Evangelise the successes, highlight the efficiency gains and financial benefits, and the client trust builds.

3. Provide crystal clear direction

Change is easier when you know where you’re going and why it’s worth it. Talk to the client about the big picture – what will the business’s bookkeeping system look like when they’ve moved to a digital platform? How will it affect the finance person or department? What can the bookkeeping employee do following the digitisation?

The reasons why it’s worth it, I’m sure could be extolled by every accountant. Not just the time, accuracy and financial benefits, but also consider wider business discussions. Remotely accessing real time cash flow figures and P&L reports enables the accountancy professional to become a data storyteller. You can see where there may be future cash flow problems. You can see if the purchase of equipment is viable.

4. Make people care. Appeal to self-interest

Moving to digital record keeping is a logical, financially sound move from the accountant’s perspective, but businesses do not think in the same way. The florist is concerned about the quality of his flowers, not the time it takes to file invoices. The hotel chain is worried about room occupancy, not bank reconciliation. Convincing clients to adopt a new routine should include ways that influence emotions. As Mother Teresa once said, “If I look at the mass, I will never act. If I look at the one, I will.”

Tap into the area the client cares about. Show them what’s in it for them and the emotional difference it personally makes.

Linda Gibson, director at Gibson Whitter, worked with a builder who only used a book ledger to record transactions. “During our initial meeting, he explained he was taking a day off a quarter to complete his VAT returns. You could visibly see the emotional pain. Taking a day out of the business to undertake a task filled him with dread.”

Rather than talking about Making Tax Digital, Linda turned the conversation to appeal to his self-interest. “We talked about what happens as soon as he has completed a job; he returns to his van, notes the work carried out and what the invoice needs to include. We talked about a day off each quarter and what he would do with the day. Bringing an emotional benefit into the conversation and changing a small aspect of his daily life didn’t just impact the efficiency of the business but gave the builder a positive vision. Spend a few minutes in the van generating an invoice and make plans for the day out.”

Note that Linda spoke about the benefits of issuing invoices to clients on site. She didn’t immediately explain the online payment feature (although the builder was delighted with the functionality). Linda wanted to alleviate a very specific emotional barrier.

5. Tweak the environment

Every client situation is different. Some value a product demonstration, so they can see how bank reconciliation works. Others will listen to peers and their MTD stories. Some clients just won’t have the capacity, so offering different types of compliance service can provide a few simple tweaks to help them on the digital journey.

Linda Gibson started to digitise her client base four years ago. However, 20 per cent of Gibson Whitter’s revenues continue to be generated from core compliance. “We recognised some clients were finding it difficult to move to digital record keeping, so offered a service to set up and populate bookkeeping software. Some clients took over the ongoing record keeping management and we are now working with them in a purely advisory capacity. For others, we provide a monthly management accounts service with added basic financial commentary. It’s core compliance but the financial commentary provides a basis for a strategic relationship.”

The frenetic activity from accountancy firms to move clients to bookkeeping software will not diminish on 1^st April. We know the move to digital record keeping is far easier for some business than others, but by highlighting small specific benefits, scaling success and connecting emotionally, it won’t be a case of convincing clients to move to a digital platform, but sharing in the successes of their new-found world.