Technology & Innovation

How to help your shoebox clients move to digital processes

You have a huge opportunity to transform the way your shoebox clients manage their finances, by moving them to digital processes. Here's how.

Most accountancy practices have at least a handful of clients who still bring in their financial information in the form of a box of paper receipts, invoices and bank statements.

Is yours one of them?

You’ve probably already discovered yourself that preparing their annual accounts and tax returns is a time-consuming and often painful process.

The good news is you can play a crucial role in helping your shoebox clients improve their financial management practices drastically by helping them move to digital processes.

In this article, we discuss why working digitally benefits both you and your clients, and what services you can offer to assist the transformation process.

Here’s what we cover:

Why shoebox clients pose a problem for accountants

The term ‘shoebox client’ was named after those who kept their records in a literal shoebox, but it describes any client who keeps their financial records in paper form.

Often, these are very small businesses or self-employed clients who don’t have a dedicated bookkeeper or accounting system.

The issue with paper records are they make it difficult for you to provide accurate and timely financial advice.

The process of preparing financial statements and tax returns for shoebox clients is much more time-intensive because you must first organise and then manually enter the information into your system.

This takes away from other important services such as providing strategic advice to these clients.

The process usually involves sorting through bank statements and assorted receipts and where there is insufficient backup to support business transactions, you then have to request more information from the client.

This ends up being an expensive job for what would normally be a relatively simple task.

Working with disorganised financial records also increases the risk of errors such as double entries or missing transactions, and inaccurate financial statements and tax returns could potentially result in fines or penalties.

Why clients moving to digital processes will make life easier for accountants

Increased efficiency

Accounting software automates many routine bookkeeping tasks, such as data entry, bank reconciliations, and invoice processing.

And that will save you a significant amount of time at tax year-end when preparing your client’s financial statements.

Some accountants worry that if they become much more efficient with the work they normally do for their clients, their clients might ask for a reduction in fees.

But this actually allows you the opportunity to focus on extra advisory support that’s more valuable to both you and your client.

Access to real-time data

Accessing your client’s financial data in real time will help you identify trends and issues as they arise.

This means you can provide more timely and relevant advice to your client, for example helping them to take advantage of seasonal growth opportunities or avoid potential cash flow shortages.

Improved accuracy

Accounting software helps to reduce the risk of human error and discrepancies in your client’s financial records because there are built-in processes to flag potential issues such as duplicate invoices.

This reduces your reliance on manual checks when you are reviewing your client’s records.

Reduced costs

Moving all your clients to digital processes is necessary to transform your practice into a paperless office, reducing the costs associated with paper-based systems, such as printing, storage and transportation.

This will help you reduce your overheads and offer more competitive pricing to clients.

Benefits of working digitally for businesses

The key to convincing your clients that it’s worth moving to digital processes is to show them how the benefits outweigh the cost of working digitally.

For example, an accounting system will store their documents in a logical and organised way, saving them time whenever they need to access their records.

When they’re looking for a particular invoice or employee expenses, they can search the employee or the invoice number in the search tool and find exactly what they want instantly, rather than searching through stacks of folders.

They’ll also save lots of time pulling together information for tax returns because the accounting software already has all the information stored, meaning they only need to pull the right reports.

Using digital tools to build more automated processes will help to save time for team members too.

Take expense reporting, for example.

Rather than having a manual paper process, employees can submit online forms and receive approvals by email.

Shoebox clients may only see an overview of their business figures on a quarterly or even yearly basis, meaning errors can become far-reaching problems and expensive mistakes to fix.

But by working digitally, they’ll have real-time access to financial data, allowing them to make informed decisions based on up-to-date information.

Working digitally also enables businesses to operate flexibly, staff can work from anywhere, at any time, and still be able to access all their data. This facilitates more collaboration among team members, even if they are working remotely.

The outcome is improved communication and ultimately an increase in productivity within the business.

It doesn’t only affect employees either. Working digitally will streamline customer interactions too. For example, a smooth online ordering and payment process will lead to a better overall customer experience.

How accountants can help clients move to digital ways of working

1. Initial assessment to understand processes

As trusted advisers, you can play a key role in helping your clients move to digital ways of working.

First, start with an assessment to understand the current state of your clients’ accounting and bookkeeping processes.

Identify the areas where they are struggling the most and where they need the most help.

2. Digital tech education

Then you can provide education around what digital technologies are out there, and how they can use these tools to improve their operations and increase efficiency.

Maybe some clients are afraid of the security risks of putting their financial data in the cloud.

In that case, you could provide advice and reassurance on ways to mitigate that risk, such as establishing a strong password system and ensuring devices have the latest security software.

3. Software recommendations

Using the information you received during the assessment, you’ll be able to recommend and help your clients implement software solutions that are tailored to their specific needs and budget, such as cloud accounting software, payroll software, and expense management tools.

A virtual or in-person demonstration is the most effective way to show them exactly what these tools can do for them.

4. Training and support

Once your client has decided what works for them, you can provide training and support on how to use these tools effectively.

This could be in the form of an in-person training session or a virtual webinar.

Clients are often comfortable using personal apps on their phone and most cloud accounting software come with apps too, so encourage them to find their way around these as a first step to getting comfortable with the software.

If your client takes transactions on the go, suggest a mobile pay solution such as Apple Pay or Google Pay.

Since most mobile pay methods integrate with any accounting system, they’ll avoid all that manual data entry, as well as sending out paper invoices and waiting for payment.

5. Help with data migration

Clients may find the idea of migrating their data from paper-based systems to digital platforms daunting.

So you could assist with this process or offer to complete this job for them to ensure that data is accurately transferred and appropriately categorised.

To ensure their new financial tools are helpful in real time, support your clients to establish a regular routine for inputting data, for example reconciling their bank transactions on a weekly basis.

6. Support to optimise digital processes

It’s also a good idea to provide ongoing advice to clients on how to optimise their digital processes, such as recommending best practices, troubleshooting issues, and identifying areas for improvement.

There are a few different ways you can provide support.

One is to send regular email newsletters featuring helpful tips; another is to offer online courses.

Or you could hold regular in-house events where clients can chat to you and ask questions.

7. Stay in regular contact

Whichever way you decide to go about it, it’s vital to stay in touch with your clients on their digital journey to ensure they’re comfortable with the new digital processes.

This way, you can address any concerns in a timely manner, rather than at tax time when you won’t have the time to spend fixing problems.

Final thoughts

Shoebox clients can be a major challenge for accountants, but they also offer an opportunity to provide valuable support.

You can offer your clients a seamless digital transformation with training and ongoing support, and assist with data migration and maintenance.

By taking a proactive approach with your shoebox clients and embarking on this digital journey together, you’ll establish a valuable long-term partnership.