Nathan Keeley, CEO, Summa Tech
Almost every conversation I had with practice leaders at Accountex earlier this year came back to the same place – the frustration of manual onboarding.
The last year has seen a big shift for smaller firms, as many deal with a cohort of new clients eager to get support ahead of key events, such as the introduction of Making Tax Digital for Income Tax.
However, as we know, first impressions count and with many relying on spreadsheets, emails and information stored in their brains, it isn’t uncommon for things to go astray.
At Accountex, the conversation would start on Making Tax Digital or recruitment, but within ten minutes, practice leaders would bring up how long it takes to get a new client properly set up and often led to wider decisions about even taking on the new clients.
It came up so often that by the end of the show I stopped treating it as a coincidence and it was as frustrating for me as it was for them, because we know the solution and hopefully now so do they.
An admin problem that isn’t really about admin
Most of the partners I spoke to described onboarding as a nuisance or something that just simply gets in the way of the work getting done and the client being charged.
Many explained the same manual process:
- The engagement letter is written and goes out via email and the chasing begins.
- ID documents arrive by email in whatever format the client had on hand.
- The AML checks sit in someone’s inbox until they find a gap in their day.
- The Partner sits at the end of the process wondering why the work isn’t underway.
A client who signed up keen on a Monday can still be waiting for a proper first conversation weeks later, often as a result of missed steps or chasing in completing their client take on.
I recognise all of it as I myself have been in practice for many years and created Summa Tech with our team as a solution for just this reason.
This is backed up by a recent poll I conducted on my LinkedIn about the bottlenecks that firms face when it comes to onboarding.
Half of those who responded said that manual chasing was their biggest challenge, while 17 per cent said that the risk assessment process slowed them down. Oddly enough no one reported that they had got it completely sorted.
Onboarding felt like an irritation to put up with rather than anything even remotely strategic or useful. It was a bump in the road to a great client relationship.
I now think that the framing is misunderstood and I should be upfront in that I have an obvious interest in saying so, but the argument holds up on its own, so let me make it.
Manual client onboarding sets a ceiling on growth
Every new client carries a certain amount of set-up work. When that work is done by hand, it is done by people who only have so many hours.
The number of clients a practice can bring on in a given month is, therefore, not always set by demand, but rather by how much onboarding capacity someone can find alongside their day job.
A larger firm may be able to absorb that, but in a practice of five to fifteen people, it usually lands on a Manager or Partner who is also doing client work, which means that it has to compete with billable time and it often loses.
New clients often wait or the firm quietly holds back on business development because it knows it couldn’t cope with a surge.
Why smaller firms feel it most
Smaller practices tend to rely on one or two people who know how onboarding really works. The process lives in their heads and their email folders or on spreadsheets in a busy folder.
When one of them is on leave, or moves on, things stall and frustration builds. It creates a point of failure that no firm really wants.
Let’s be honest, in most practices, where recruitment is increasingly becoming more challenging, there is also far less room to absorb inefficiency.
A few hours a week lost to chasing documents barely registers in a larger firm, but in a firm of three to eight staff, it is a meaningful share of the week that could have gone into advisory work or the clients already on the books.
A two-partner practice carries the same AML obligations as a national firm, but conducting checks that thoroughly by hand for every new client, and being able to evidence it
afterwards, is a heavy load when resources are often already stretched.
Clients notice as well
There is also a client experience cost that is easy to overlook, especially so early into a new relationship.
Someone who has just chosen your firm is at their most receptive and if their first few weeks involve repeated requests for the same information and documents sent back and forth by email, let’s be honest, it isn’t a great look.
Most of us have opened a bank account on our phones in a matter of minutes and clients now carry that expectation with them, whether we like it or not.
The new cohort of small businesses looking for an accountant to help them with their digital reporting want that level of service, but that can be challenging without technology on your side.
What changes when onboarding stops being manual
The practices I see growing comfortably have treated onboarding as a process worth designing and investing in, not a chore to get through.
Taking on ten new clients in a month becomes a question of whether you want them, not whether you can process them if you have the right systems in place.
Judging by the conversations had throughout this year with many Partners, plenty of practices have already reached that conclusion and are simply working out how to act on it.
It is the problem we built Onboarder to solve and if you would like to see how it fits your practice, why not sign up for a 14-day free trial?
Register here today and our free concierge service will be in touch with you.