Accountants must recognise the value in maintaining a high standard of client data in order for their services to be optimised and time to be used more efficiently, says Helen Lloyd, co-founder of accounting tech platform DEXT Precision.
“The problem is if your data isn’t checked, if it isn’t accurate, if it isn’t reliable, you could be liable for things like fines for underpaid tax,” says Lloyd.
“And then there’s the issue of ineffective forecasting. If you’re trying to do a cashflow report for a client and the data isn’t represented correctly, you’re not going to have an accurate outcome.”
Lloyd also notes the potential time-saving element of refining data checking processes, pointing to survey results recently compiled by DEXT Precision.
The survey found that accountants spend an average of four hours and 46 minutes per week detecting financial data errors. This equates to more than 3,000 hours per year for a firm of 15 accountants.
In addition, DEXT Precision estimates that up to 40 percent of accountants’ time could be saved by automating data checking.
“The time you’re spending there is time you’re not spending with your clients,” says Lloyd.
Crucially, the survey also found that the average time spent checking bad client data was more than double what respondents anticipated.
“If it takes longer than expected it can impact your profitability and slow down your team.”
However, Lloyd goes on to clarify that time does not necessarily directly equal money. Rather, accountants can create “opportunity” through streamlining these processes.
“If time is saved, an accountant or bookkeeper can then decide how they want to utilise it. So they might want to add additional services to their portfolio or have a four-day week as a business.
“It’s a very individual choice, but the bottom line is that you’re creating opportunity as a result of saving time.”
“A higher standard of digitisation”
While pointing out that errors often slip through the net during data checking processes, Lloyd also notes the key reason for this – they are difficult to spot.
“You never know quite what you’re looking for,” she says. “A lot of people just put things into Excel and start casting their eye down to see if there’s anything there.”
This, Lloyd explains, is the defining rationale behind DEXT Precision. Instant, automated data checks mean that the margin for error is entirely eliminated.
The platform integrates with Xero and QuickBooks Online, performing over 50 unique data checks and automatically flagging discrepancies and inconsistencies.
“We check each of the elements of the data and then we provide an alert for each of them if we find something that we think might be a problem.
“It does this instantly, so you don’t need to worry about what you’re seeing and not seeing.”
The platform’s consolidated health score feature and series of activity metrics, Lloyd argues, is also something that brings great value. This gamifies the service somewhat and offers a concise summary of how each client is performing, she says.
“You can see at a glance how good the quality of the data is for each of your clients – it really gives you a lot of oversight.
Lloyd believes that this level of oversight and assurance is more valuable to accountancy practices in the current climate than ever before.
It’s harder to communicate with clients remotely, and that’s because many are running their businesses digitally, so there is less physical evidence that would usually be used to support data, she says.
“With DEXT Precision, you can move towards a higher standard of digitalisation – you don’t have to worry about distance so much.
“You’ve also got an opportunity to create more touch points with your clients. We need to find those ways to start those conversations with our clients in the absence of being in the same physical space.”