direct management, Diane Lucas

Synergy of peers: the bookkeeper, accountant and client relationship

Don’t get caught up in the noise – the interests of the client are best served when there is a three-way interaction between the accountant, the bookkeeper and the client.

I am a bookkeeper. I am one of several bookkeepers in my business where we are known as the bookkeepers that accountants want you to use. We can say that because it is true. We can say that because we have strong referral relationships with accounting firms and accountants simply appreciate the quality of the work that we produce.

The realisation

When I started my business over 10 years ago, I had much to learn. A strong network of like-minded bookkeepers/consultants fast tracked my journey as my thirst for knowledge was never sated. At the time, I held accountants in reverence. Accountants were the people I wanted to support as I felt they held the fate of my business in their hands. What I soon discovered is that not all accountants are equal. Accountants have varying levels of experience, proficiency and knowledge – as do bookkeepers. An accountant’s willingness to learn, share, educate and their acceptance of bookkeepers as fellow professionals is what I finally learnt to identify as the type of accountant I wanted to associate with. Having this clarified, I started to seek out accountants with this profile. A partnership that upholds these characteristics simply provides better outcomes.

Adversary or advocate?

Back then, there were clear parameters around the role of a bookkeeper (BAS-related activities) and that of an accountant (tax-related activities). As a bookkeeper specialising in consultant activities (training, software set-up, business processes, etc) I was already entering the realm of activities some accountants viewed as their domain. Others respected my expertise as an area that I was skilled in and viewed these services as complementary to their own. These accountants understood that a collaborative relationship with the bookkeeper (whether consultant or not) was in the best interests of our mutual clients. A well set up company file (software), compliant transactions, streamlined processes, an educated client, all served to assist the accountant in providing their services of expertise with confidence. A solid set of accurate books and a profitable, compliant business makes an accountant’s role so much easier – whether to perform tax services or to provide other value-added services.

So has anything actually changed from then to now? Yes and no. A bookkeeper of today is still performing the tasks required of a BAS agent and the accountant of today is still completing tasks as a tax agent. However, the lines are blurring more and more when it comes to advisory services. A unified and two-way approach that provides the client with a complete solution is achievable when bookkeepers and accountants understand the opportunities that a respectful partnership can provide.

Why do we need to work together?

Today’s client is more demanding, making the case of a peer relationship between the bookkeeping profession and the accounting profession even stronger. To ensure a client’s business is not just compliant but also thriving, the need for value adding advisory services starts to appear. Advisory services can take different forms and should account for the client’s unique needs. These services can be anything from analysis type activities like reporting to forward looking activities like forecasting or process streamlining and automation. The different and often complementary skill sets and experiences of bookkeeping and accounting firms can be brought to the client table in the form of an integrated approach.

Recently there has been a lot of attention given to accounting firms adding bookkeeping services to their offerings. In itself, I don’t see that as an issue. How a firm decides to run their business is nobody’s business but their own. What I question is accounting firms who don’t appreciate the complexity of the bookkeeping services and how bringing these services in-house may not necessarily be in the best interests of the client.

The main area of concern I have when the full set of client activities are completed within the one firm, is the potential lack of accountability. When we engage with a new client, the first thing we do is to complete a health check on the business books. This health check identifies any issues within the company file. I have yet to come across a company file that doesn’t require a clean-up of some sort and, more often than not, the file is in need of some serious corrective actions. With strong governance in place between the bookkeeping arm and accounting arm to ensure clear objectives and the execution thereof, a level of accountability can be established to ensure effective outcomes for all parties, including the client.

The case for a peer relationship

Remember when I first became a bookkeeper I mentioned that I saw myself as standing in the accountant’s shadow? As my confidence and skills as a bookkeeper and consultant grew, so did the confidence to approach accountants and inquire about their actions. What this taught me is that accountants make mistakes too. By having them flagged we were able to address them and the integrity of the books was maintained. Other times, simply asking the questions about why a particular entry was processed in a particular way assisted me to understand more complex transactions and scenarios. In other cases, the accountant walked away with some detail that was unclear previously. My asking the accountant to explain/clarify was not to catch them out, but to enhance my own development. This in turn enabled me to better assist my clients and to be better able to present a set of cohesive books for the accountant – a win-win for all.

Some accounting firms say that they are bringing the bookkeeping service in-house as they can’t rely on the quality of the bookkeeping being completed by the client’s bookkeeper. There are alternatives. An alternative to bringing bookkeeping services in-house is to build better relationships with the client and the external bookkeeper. A giving accountant takes an interest in the person completing the bookkeeping and views the relationship as essential to their own business. The accountability measures actioned by different firms removes the potential for conflicts of interest and are arguably easier to implement than to do so within the firm.

Steps to strengthen the peer relationship

One of the core values I uphold in my business is education – this extends to all. Myself, the team, the client and the accountant. It is rare that I find an accountancy firm that also believes that education is the key to a mutually fulfilling relationship. To take the time to provide these education services may deliver another revenue stream but regardless, to not see education as an investment in an equally sustainable relationship is, I think, rather short-sighted. The following are four areas for improvement where I believe an accounting firm can better service clients and the all-round bookkeeper relationship.

1. Educate the bookkeeper about where they can improve. Guide them to the transactions that are at fault and demonstrate how they should be entered. Encourage the bookkeeper to call the accountant with questions on areas they are not familiar with or sure about. Assist to build the confidence of the bookkeeper.

2. Understand the skills and experience of the bookkeeping firm. As an accountant, recognise that bookkeepers have the provision for complementary services/offerings – both value-adding and traditional. These synergies of services enhance the peer relationship.

3. Educate the client when the bookkeeping is not up to scratch. For businesses completing their own bookkeeping this may be a tricky area. My experience, however, is that a business owner is willing to learn to improve their bookkeeping processes. If bookkeeping is outsourced and poorly completed, then often it is the accountant who is the only one aware of the poor state of the bookkeeping. The business owner thinks all is OK and is none the wiser. I believe in this situation an accountant has the responsibility to inform their client. Remaining silent and simply fixing up the transactions at the accountant end only is not in the best interests of the client.

4. Educate the client about using registered BAS agents when engaging an external bookkeeper. Take an interest in who the client’s bookkeeper is and report unregistered bookkeepers to the Tax Practitioners Board.

Stronger together

The interests of the client are best served when there is a three-way interaction between the accountant, the bookkeeper and the client themselves. Even if the accounting firm decides that incorporating bookkeeping services into their practice is the best way forward, it should be respected that bookkeeping is not accounting. Keeping these departments separate, interactive and accountable ensures a separation of duties and minimisation of any conflict of interest. The same applies with relationships between external bookkeepers and accountants – keep each other accountable and be generous in providing education and be gracious in accepting education. The results will speak for themselves.

2 thoughts on “Synergy of peers: the bookkeeper, accountant and client relationship

  • March 16, 2018 at 2:02 pm
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    Excellent article – well done. I agree 110% with what was written.

  • March 16, 2018 at 4:44 pm
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    Well said. That was a very interesting article.
    agree 150%

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