Managing director of IODM Damian Arena says clients pay their accountants late because they simply “forget to pay”, adding that accountants should have a streamlined system in place to ensure prompt payments.
“Currently there [are] 26 billion unpaid invoices in Australia alone and unfortunately accountants are part of that mix,” Mr Arena said.
“Accountants are the trusted advisers of their clients and are generally good guys so they’re probably the last on the list that people think about paying just for the simple reason it’s not front of mind. So accounting firms are struggling, they are getting better at it, but they are struggling getting paid quicker.”
Mr Arena said accountants are often “too time poor” to chase their debtors, leaving their businesses at financial risk.
Accountants need to consider implementing a system or procedure that ensures their clients are reminded to pay and have the option to pay over a period of time if they are struggling with cash flow.
“In today’s age, with technology quite available to all industries, especially accounting firms, one thing we find is accounting firms that are working with pursuing a product, it introduces a new workflow, it puts a new system and procedure in place … that streamlines and gives them more efficiency,” Mr Arena said.
“We’ve had some accounting firms spending 3.5 days collecting their debtors. [With a system in place,] it now takes them two hours a week, so they’re saving time [and] they can get back to doing what they’re doing.”
Mr Arena said having an automated payment system in place can also improve the accountant-client relationship, as the accountant is not nagging the client to pay.
“The accountant gets [their] money [and] the client gets a bit of breathing space, so it’s a bit of a feel-good engagement.”
