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In today’s episode of ‘From the eLearning Trenches,’ we asked one of our learners, an experienced Bookkeeper, to explore the time cost vs fee associated with delivery of virtual CFO services to one of their clients? What steps can they take to improve return on investment for this client?

Learner Reflection

My largest client has a recurring outcome based weekly billing of $1,000.  I have completed 282 hours of work in the 8 full months of 2023 being January – August which is approximately 8 hours per week or $125 per hour. 

As part of this service, I complete all bookkeeping work, including sales reconciliation from their Shopify store, payroll, creditor payments and preparation of financial reports in excel.  I have had conversations with the client about providing cash flow and budgeting, however, for a variety of reasons, I have not had the capacity to do this.

We have implemented A2X to manage sales data more efficiently and this is working well.  We have also implemented Cin7 for inventory management, however there are still a few issues to work through.  I can see light at the end of the tunnel where I will be able to provide cash flow and budgeting forecasts.  I am keen to explore Calxa as a tool for reporting as there looks to be an extensive selection of further reporting that would give the client valuable insights into their business. 

With the onboarding of a staff member to complete transaction-based processing tasks, I would have the opportunity to present in-depth reporting to the client, initially as part of my current service, however making it clear that this will be an additional service if continued.

By implementing software solutions to the client workflow to improve efficiency and then higher-level services to add value, I will be able to increase the return on investment of the client.  This would act as my template to use across my client base and to engage new clients.

Feedback from our experts

Analysis of time associated with this client suggests that work is being completed within the agreed fee and time cost budget. The challenge the bookkeeper faces is how to add value effectively without significantly increasing the fee for service. Whilst data processing and reporting is essential for any effective business owner, it’s generally the conversations and considerations around financial reports that provide real value. When significant time goes into producing reports, there’s often little of any time available for strategic discussions about the business.

The bookkeeper is looking at the benefits of delegating transaction-based processing to someone who can effectively complete this task at a lower cost to the business. Of course, this implies that there is sufficient work to keep this person fully employed.

This is a common issue for accountants and bookkeepers trying to create capacity to add value to clients. Leverage and strong processes is the solution, however this can be difficult to achieve when the firm simply doesn’t have enough clients to require a value-added service.

Often the best way to start is simply to use the existing reports to create opportunity for some discussions around business strategy and operations. By showing the client what value can be added, they may be more inclined to invest time and money in additional services. It takes time, but this is generally the best approach. The alternative of simply suggesting a value-added service up front may not get across the line if the client doesn’t clearly see the additional value.

What are you doing to create capacity and time to add value to clients?  Consider the following actions:

  1. Implement Automation Tools and Software
  • Use modern accounting software that offers automation features, such as data fetching from banks, automatic categorization, and reconciliation. Software like QuickBooks, Xero, or Sage can streamline the accounting process.
  • Implement robotic process automation (RPA) for repetitive tasks to reduce human intervention and the possibility of manual errors.
  1. Standardize Reporting Templates
  • Create standardized templates for financial reports that can be used across multiple clients, which can be quickly customized as per the client’s needs.
  • Consider using cloud-based reporting tools that can be easily updated and shared in real-time with clients.
  1. Train and Up-Skill Staff
  • Invest in regular training for the accounting team on best practices, new software tools, and efficiencies in financial reporting.
  • Encourage a culture of continuous learning and sharing of tips and best practices within the team.
  1. Establish Clear Communication Channels
  • Develop a systematic approach to collect data and feedback from clients. This might include regular check-ins or use of collaboration tools.
  • Ensure clients are aware of the importance of providing accurate and timely data to prevent delays and additional work later.
  1. Embrace Outsourcing and Delegation
  • Consider outsourcing certain non-core tasks, such as data entry, to trusted third-party service providers.
  • Delegate specific responsibilities within the team, ensuring that senior accountants and partners are focusing on high-level tasks and client interactions.

Key take-away

By optimizing the financial reporting process, bookkeepers and accountants can allocate more time to engage in rich conversations with clients, providing insights, and assisting them in their growth strategies

This assessment task and response is taken from the Virtual CFO Essentials eLearning Course. Click here to explore this course

Also, take a look at the Virtual CFO Advanced eLearning Coursee of our eLearning community as we unveil daily feedback from enrolled learners. Exciting times ahead as we share this valuable information with the accounting, advisory, and administrative experts in public practice!