Why is Bookkeeping Important?

The absence of bookkeeping in a business is like a road without signs because you’re likely to arrive at a different place than intended. Any large business learned the value of financial records produced by bookkeepers is crucial for proper management.

Bookkeeping is essential to every business for both financial and legal reasons. Without record keeping, it is difficult to get a business loan, and impossible to do taxes. Even more importantly, without the information that bookkeeping provides, wise decision-making is tricky and can lead to disastrous conditions.

There is a close correlation of success with those that realized the importance of bookkeeping and those that did not. Those that thought bookkeeping was an unnecessary luxury judged the success of their business by the amount of money in their bank account. Their thinking was “If I have money, I must be doing well.” That assumption, all too often, caused them to always be in the “fire-fighting” mode of management. Unfortunately, a lack of a bookkeeping system would end disastrously for the owner, with mortgages on their home, and bill-collectors hassling them. It even led to bankruptcy too many times.

Certainly, bookkeeping does not guarantee success. Nor is it all that is needed. Yet it leads us to information that can help us make well-informed decisions. Allen Bostrom, in his book “In the Black”, states “You hear a lot about the importance of making decisions based on data. What I have learned is that decisions should be based on wisdom, not necessarily data alone.” He goes on by describing the Wisdom Pyramid which is a triangular shape with “Data” at the bottom and topped by “Wisdom”. In other words, data leads to information, information leads to knowledge, and knowledge leads to wisdom.

In summary, the difference between achieving entrepreneurial dreams and disaster for a small business owner is often based on their appreciation or lack of appreciation for the information coming from a bookkeeping system.

6 Key Steps on How to Deal with a Difficult Accounting Client

All accounting firms have to deal with difficult clients more often than not. Regardless of how much we want it, not every client turns out to be an ideal client. No matter what you do, some might just turn out to your worst nightmare, the ones who keep complaining, who trouble your mobile bookkeeper by not paying their reimbursement or bills, or wait until the eleventh hour to supply information.

Conducting business and interacting with those difficult clients can become frustrating and tedious at timCommunicate With Your Clients Universal Accountinges. However, we know that these clients can be the lifeblood for any accounting business. That said, it is important for firms to recognize how to deal with such potentially hot-blooded situations to make sure that their clients remain satisfied with their services. Unfortunately, it is not as easy as we might think.

Today, we are sharing 6 key steps to prevent disagreements and problems from arising in the first place, as well as how to deal with them.

The 6 Steps:

  1. Communicate, Communicate, Communicate!

Communication is the key. If you get blindsided by your difficult client, it indicates that you have not communicated with them thoroughly enough. While communication protocols are unique to each accounting firm, these tips can be applied anywhere:

  • Make it a general rule to contact your clients every so often.
  • Keep door of communication open, because it is very likely that you will never become their trusty adviser if you only speak to them during tax season.
  • Make yourself accessible and return their calls promptly.

Regular communication tends to provide cross-sell and value-added services to your organization and is essential to keep difficult clients satisfied.

  1. Conduct reviews

Conduct at least trimestral reviews to know what your clients think about your firm’s performance. These reviews are valuable because they will make your relationship with your clients:

  • More long-lasting.
  • More dynamic and fruitful.

These quarterly reviews can help your firm to fix issues that have arisen and were pointed out in the last review. They also allow you to make continual improvements within your organization in accordance with the needs and demands of your challenging clients.

  1. Make their expectations clear

Check with your clients to note down their expectations, goals, and timelines and then perform in line with them. Needless to say, your firm’s expectations, goals, and timelines should also be in agreement with that of your clients’.

View your business clients as your clients but as people, too:

  • Celebrate your clients’ successes.
  • Console and assist them during difficult times.

Such attention tends to help prevent upcoming conflicts and will lead to better and more harmonious connections between you two.

  1. Avoid qualms

The difficult clients who keep on questioning your work may have some vested interests in your business. They may want you to make improvements within your firm. Do NOT get suspicious and wary about your clients’ intentions and keep things professional.

  • Respond to your clients’ concerns in an appropriate manner.
  • Consider that their criticism is constructive. Use it positively and for your own betterment.
  • Stay on your toes when responding to challenging clients, avoid angry or aggressive responses.
  1. Empathize

While speaking with the difficult client, try to understand why your client is acting the way they are. Try to help them in turning the difficult situation around and empathize with them by asking about how you can make the situation better.

  • Discuss the client with your workforce to see if you can find a solution together.
  • Let the client know that you care about them and are doing your best to work things out.
  • Show empathy in the way you speak, ask questions, and address their concerns.

Showing empathy does not only show that you care for someone but also tends to drive positive outcomes. Empathizing is one of the friendliest gestures you can extend to someone in trouble.

  1. Let Them Go

Sometimes your difficult client can become challenging to the extent that will distract you from your work. In such cases, have the courage to let them go! It is better to pay attention to those with whom you have the most prolific relations:

  • The ones who help you achieve your business objectives.
  • The ones with whom you and your employees have a great relationship.
  • The ones you know you are providing value for.

Realize that you aren’t a perfect fit for this certain client and terminate the contract on amicable terms. Suggest other probable options to them, if you can and let them go.

It is true that your clients are important for your business success and you can’t continue without them, but it is also a fact that some problematic clients may provide you with more harm than good. It is better to let them go and move on if you really want to make the most out of your business.

It is just impossible to promise that accounting firms will never have to deal with problematic, challenging, and difficult clients. However, by following the steps suggested above, you can prevent clashes that will disrupt business from occurring.  

Irena Mckenzie

Irena Mckenzie is a Castle Hill local and is a very experienced local, mobile bookkeeper and successful small business owner. She has many years experience in all facets of bookkeeping and office work.  She has run various small businesses for many years and understands exactly what it takes to get a small business up and running at full speed.