Why Quality Data Must Be at the Core of Your Firm's Strategy
In times of economic uncertainty, clients tend to rely heavily on their accountants and bookkeepers to provide critical financial insights. With accurate, reliable client data at your fingertips, you can alert them to potential hardships, and open them up to opportunities. But in order to do this, profitably, data quality needs to be at the core of your firm’s strategy. Here’s why…
Great accounting work starts with good data quality
Data quality can make or break an accounting firm. You know that data quality is necessary for compliance - but it’s also essential if your firm provides advisory services. The reputational risks of providing incorrect advice based on inaccurate or out of date data could be devastating. Your clients need to know that their accounts are ‘healthy’ and compliant. They also want to be confident in their decision-making - so working with the best available information and insights is important to their future.
At the same time, your practice needs to analyse client and operations data to continuously improve internal processes, so that you can:
- Unblock data bottlenecks,
- Improve data accuracy,
- Make efficiency savings,
- Balance workloads,
- Motivate team members,
- Identify clients that are struggling,
- Tailor your services.
Ultimately, robust data quality management underpins productivity. It is important for your reputation and your growth.
Top Tip for improving data quality management
Dext Precision has a detailed dashboard that offers an overview of all clients, health scores and workflow status – giving you the visibility you need to supervise a large number of accounts without missing anything. When you don’t have to investigate data to find where the errors are, you have more time for defining client solutions or improvements.
Top tip for Dext users
The ‘items to action’ widget in Practice Insights shows you exactly which clients are up to date, and which have items that need actioning. You can also filter by items your firm/client is responsible for. If any of your team have downtime, you can redeploy them to support those clients whose bookkeeping needs attention. This function also frees up your team from ‘busy work’.
Why measuring data integrity is important even before onboarding new clients
For more information about establishing good data quality practices for your firm and your clients, download our latest guide: Navigating economic turbulence with quality client data
According to a sector-wide survey, inaccurate data is a bigger challenge than many accountants and bookkeepers initially realise. The survey found that accountants lose around an hour per day manually checking client data for errors. This is the case, across the globe:
- South African accountants spend more than 5 hours each week checking for bad data;
- French accountants spend 4.7 hours checking data sets;
- British accountants spend 4.4 hours checking unreliable data;
- North American accountants spend 4.15 hours data cleansing.
For a team of 15 accountants, this adds up to an average of 3,284 hours (or 19.5 weeks) spent on data cleansing - every year. Many of these hours are not billed to clients - which is why it’s important that your firm has a process for measuring data integrity before onboarding new clients. To ensure your firm can effectively serve these clients - and properly charge them - having this visibility over their data quality is crucial.
The process should use sample customer data to check for these data quality metrics:
- Data accuracy - how many errors are in the data set?
- Data completeness - how much of the requested data is available?
- Data uniqueness - did you need to remove duplicates?
- Data consistency - how reliable was the view of data presented?
- Data validity - were the data sources available and how was the data stored?
- Data timeliness - was the data up to date and easy to provide?
For peace of mind, your process should also answer these 5 questions:
1 - How long did it take to respond to your data requests?
2 - How automated is their data management?
3 - What was the percentage of missing or poor data?
4 - What would be their attitude to using new accounting technology?
5 - Would they invest in data reliability tools?
Checking the quality of client’s data, before taking them on, allows you to price more accurately. And this helps improve the recoverability of services, which is especially important during tough times. Measuring data integrity is also an important first step in any end to end data quality management strategy.
Top Tip for pricing services based on data quality metrics
With Dext Precision, you can assign different ‘review month’ flags against a client and build flag-based reports. You can review these on a monthly basis, providing you with a list of clients whose fees need to be assessed to ensure their metrics are still in line with how much they pay.
The need for a robust data quality management strategy
When servicing lots of clients, it can be difficult for accountants to get an accurate overview of each client’s data. The way to overcome this is with a data quality management strategy. Accounting automation is a vital part of this strategy. Too many businesses still rely on manual processes which are prone to data inaccuracy and delays. Whilst automated data processing and checking can save practices up to 40% of the time spent manually retrieving, resolving and reporting on clients’ data
As well as recovering the time wasted on processing and fixing bad data, automation helps you catch errors before they get out of control. One mistake can build and can cause habitual errors, which can then take a significant amount of time to fix. This affects your recovery rates. Which is why accounting and pre-accounting software is designed to highlight data inaccuracies and inconsistencies for your investigation. The best tools also make this information accessible, so you can work with it in an agile way.
3 more reasons to automate data quality management:
- Automation tools can be the difference between a task taking minutes or hours to complete.
- Real-time client insights are extremely difficult to achieve manually
- Investing in data quality management software means you can engage in regular, data-driven conversations with clients.
Why your team cares about data quality metrics
Qualified bookkeepers and accountants rarely want to spend time repeating manual data accuracy checks that could be automated. Especially when people shortages and stretched workloads are already putting them under pressure. They also know that data availability affects their efficiency. And the quality of the data they are working with impacts their performance. So they care about your firm’s data quality and the technology your firm has in place to make accurate, complete data accessible to them. When they need it.
Younger accountants in particular are not willing to spend their time with manual data entry or other uninspiring tasks before they can move on to more interesting work. Newly qualified recruits may have completed their training online, and cloud accounting will have been a part of their course. Ambitious accountants will also have spotted the career opportunity in being a cloud-accounting specialist. Which is why your firm’s approach to accounting automation now plays a significant role in recruitment. Digital natives (typically millennials, gen y and gen z) are expected to make up 75% of the workforce by 2025. These employees want and expect to use technology to improve their productivity and make their work more valuable.
So accounting automation not only underpins your data quality management strategy, it can also future-proof your firm through effective and forward-thinking practice management. It has also proven invaluable in accommodating agile working in recent years. As well as informing pricing, driving productivity and improving decision-making, accurate and actionable data from accounting solutions helps your firm:
- Focus training programs
- Create healthy competition between teams
- Attract and retain talent
- Develop new accounting specialisms in-house
Top tip for Dext users
Practice Insights allows you to monitor team-level performance, which you can use to transform how each team approaches their tasks. By highlighting what best practice looks like in your firm and which team is ‘winning’, you create a healthy, competitive edge that helps improve performance across teams.
How to improve data quality with cloud accounting
Automating data capture, processing, analysis and reporting for end-to-end processes requires a range of solutions. All of which are now readily available in the cloud, including:
- Pre-accounting software and bookkeeping tools,
- Accounting software and solutions,
- Payment and prompt invoicing software,
- Credit checking and credit control apps,
- Accounts Payable software,
- Marketing and CRM systems,
- Pricing and Proposal writing tools,
- Timesheet and productivity apps,
- Practice management information systems,
- Business intelligence and reporting apps.
Key to improving data quality is choosing software that easily integrates with the other tools you, and your clients already use. Dext is one of the most integrated solutions on the market. It improves the quality of the data in systems like Xero and QuickBooks. It also complements other apps and software that your clients and your practice uses.
It’s why the Dext platform is a vital part of any cloud accounting tech stack:
Prepare is designed to take the stress out of data entry with a range of submission tools and market leading 99% extraction accuracy. It ensures all supplier invoices, expenses, and bank statements are captured, coded and sent to the accounting products your clients use, or the export formats your practice needs.
Precision then takes all of the data you or your client have fed into Xero or QuickBooks Online and provides you with a client data Health Score. It automatically highlights data discrepancies that should be reviewed for quality control (through a variety of data quality checks). So you know how much of the data you can trust. It also fast-tracks the client jobs your firm does day in, day out. Monitoring bookkeeping at all times and automating data checks for efficient compliance control results and insights your clients really value.
Meanwhile the insights you can generate using Precision and Prepare’s Practice Insights helps your managers optimise your team’s time. Whether that’s balancing workloads, spotting bottlenecks, or identifying opportunities to improve accuracy and efficiency, it gives you the oversight you need to manage a team. And keep your clients happy by proactively identifying when they might be struggling, so you can tailor your services and support accordingly.
Top tip for engaging your clients during turbulent times
Encourage your clients to work closely with you to navigate these turbulent times. Share this handy guide that explains how you will help them keep track of their leading indicators to navigate inflation, cash flow insecurities, and supply chain volatility.
How to start putting data quality at the core of your firm’s strategy
The benefits of high quality financial data to your clients’ businesses are clear, especially in terms of the additional value-add analysis you can provide. But the benefits to your practice are even greater. So where should you focus to get started? Our experts suggest:
- Document your data governance processes and get everyone in your firm to understand the value of good data quality management. Appoint data champions, to help you with this goal. Explain your commitment to giving everyone in your team access to good quality data to work with. Regularly review your practices and the impact on your data quality metrics.
- Review your client onboarding and retention strategies and put data quality at the heart of the relationship. Stress the importance of data accuracy, from the outset with a new client. Recommend tools that can help with each data quality dimension they need to consider.
- Motivate clients to embrace MTD using cloud compatible software. And recommend other tech solutions that will help them, and you. Can you help them automate processes to retrieve data sets from all their data sources? Remove duplicates, cleanse data, highlight unreliable data, and test for data consistency? What more could you automate to save them - and you - valuable time?
- Accounting tech in place, focus on improving specific data quality metrics for your practice. Start with either your biggest practice-wide data issue or your most challenging clients.
- Automate practice workflows to get full visibility over all tasks and ensure reporting is consistent. Even when you have lots of clients with varying financial cycles.
- Apply the same rigour to your own financial data and analysis as you do to your clients. Ensure you are working with your data in the most agile way possible. Identify opportunities to optimise profits and sustain your own healthy cash flow.
Do you need help implementing accounting automation in your firm? No problem - here's a step-by-step guide with tips from experts themselves!
Top tip for accounting firms during times of economic uncertainty
Look at your entire accounts and tax cycle for a client and ensure any time that needs to be charged is invoiced at the point it is delivered rather than being "locked-up" in WIP. This often results in time being written off and the client forgetting about the value that you added. Remember, if you have not invoiced for work completed, your firm has no chance of being paid if a client goes into liquidation. Your bill is the only thing that gives you a claim.
For more on navigating economic turbulence with quality client data, download the guide
The benefits of good data quality - beyond the obvious time savings
Data quality management might not be exciting. But it is fundamental to your firm’s ability to operate profitably, and sustainably. It could also be the driver for embedding new practice management technologies. Which could be a game changer for your firm.
Invest in data reliability and your firm will reap the reward. Apart from the time-saving benefits, and your recoverability, you might also enjoy:
- Soaring client satisfaction. With the ability to engage in regular, data-driven conversations with clients, you can tailor your services. Ensure clients are getting the best possible support from your practice. And position your partnership for the long haul.
- Talent retention. Good data insights enable your practice to identify your best accountants. And you can keep your best talent performing well by equipping them with good quality data and processes. Your accounting automation strategy should also help keep them engaged.
- New income streams. Cloud accounting and machine learning is transforming the world of accounting. With the right people in place, powered by the right software, your firm could open up all sorts of new advisory services. And future-proof your business.
