Over the last year, many advisors’ workloads have increased exponentially. Helping businesses navigate economic uncertainty, apply for new support schemes and better understand their cash flow has pushed projects beyond their original scope, often with no uplift on fees.
As accountants - the people on the frontline for many small businesses - having a deep understanding of our clients’ data not only protects them. It helps us prepare for the road ahead.
We spoke with 150 accountant advisors this year to understand key barriers to growth and one message came back resoundingly.
The complexity of work involved in a new project was often underestimated. One in three advisors (29%) said that this was an issue, followed by inaccurate client data (22%) and scope creep (18%).
Engagement letters, service level agreements and pricing reviews are all useful ways to tackle scope creep. Yet, perhaps the best way to price a project is to first know what you’re getting into - assessing data complexity and accuracy first.
The Xavier HealthScore® lets you see the accuracy of your client’s books in a fraction of the time. It can help you plan resourcing for data checking, prepare management reports and help motivate the team.
What is Xavier?
Xavier is the essential toolkit to support better billable advisory services. By combining cleanup and insight metrics, Xavier provides a unique HealthScore® percentage that you can share with clients.
Co-founder and Operations Director of Xavier, Rich Nicolson and I asked three of the leading accounting and bookkeeping firms how they counter widening scopes and accurately price work while protecting their team’s productivity.
Here are the top three insights. And yes - the first unsurprisingly is to use a HealthScore tool!
1) RUN THE XAVIER HEALTHSCORE® SCORE BEFORE YOU START CLIENT WORK. USE IT TO INFORM YOUR PRICING.
Before Xavier, Kendons - one of Australia’s leading accounting firms - would manually check their clients’ Xero files to ensure the data was accurate and up to date. When they introduced Xavier in January 2020, it was an instant hit with the team and saved time from the get-go.
“The HealthScore® is the lynchpin for every job. If you have a tidy file, you know that your clients are good at submitting paperwork. If you’ve got a messy Xero file, you know to allocate the job to someone more senior and price the services accordingly,” says Kate Bennett, Kendons’ Head of Business Advisory.
In the UK, Emma Fox - founder of award-winning bookkeeping firm, Fresh Financials - runs a thorough health check with a potential client to understand three things. First, what technology the client will need; second, how much work is expected to maintain the daily bookkeeping; and third, what the client will be like to work with.
“Xavier is then used to prove our work quality and reiterate our values of clean up-to-date data to our clients. We used to do a health check report at the end of the VAT period, which our clients rarely looked at. Now we share the Xavier HealthScore® with the client in a way that they understand and appreciate,” says Fox.
As a result, Fresh Financials can give their clients up-to-date Xero accounts and feel more in control of their cash flow.
2) TRACK HOW YOUR TEAM IS PERFORMING.
The Xavier HealthScore® is an essential productivity tool. Both Kendons and Fresh Financials use it to track their teams’ performance and improve over time.
“Our team can see their own mistakes and correct them by themselves. Because of the way the team works with their normal clients, they’re always wanting to beat each others’ internal HealthScores,” says Fox.
For Kendons, they also see the HealthScore® as an efficient way to highlight recurring errors and personalise training plans. Xavier has encouraged staff who were just focused on compliance to ask questions on what the data means for their clients.
“It opened their eyes to something they wouldn’t ordinarily be focused on”, says Kate Griffiths, the Head of App Advisory at Kendons.
3) GROW ADVISORY WORK WITH BETTER DATA AND INSIGHT TOOLS.
When combined with the Xavier data toolkit and Practice Dashboard, the Xavier HealthScore® opens up more opportunities for better advisory.
Since using Xavier in January 2020, Kendons have grown their advisory work by 25%. Just before lockdown, they ran a HealthScore® for a new client as a test case. This surfaced all kinds of issues with their business data that they wouldn’t have otherwise seen. Once they addressed this, they used Xavier to add regular dashboard reporting, ongoing advisory conversations and tax planning to the client’s GST model.
By pivoting or filtering on values, you can see which clients would benefit most from additional app services such as Receipt Bank or debt recovery tools.
“Our client told us that she’s had more help with her business in the last four months than she had in the last four years with her previous accountant. We owe so much of that to Xavier,” says Griffiths.
The benefits don’t stop there. Andy Sullivan, the Director of CompleteHQ in the UK, had just started working with a new business. As a standard check, he ran their Xero data through Xavier. Xavier flagged an issue, which he investigated and found just under £39,000 missed tax claims in the past 20 months.
The Xavier HealthScore® is the first step to getting your clients’ data in good shape and delivering the brilliant business advice they need to succeed.
Xavier is currently available to all Xero users in the UK and Australia. With more countries being added soon.