Accounting practices, both large and small, are having to navigate uncertain economic conditions in the wake of the COVID-19 recession. The Australian Financial Security Authority (AFSA) has marked accountants as one of six common businesses that are highly exposed to trade credit debt. This puts accountants at risk of not getting paid by clients who are under financial pressure.
Practice Ignition, an accounting practice management software provider, knows that effective cash-flow management, including eliminating debtors and reducing the risk of bad debts, is an essential for any practice, especially in unsettled times. Here, Rebecca Mihalic CA, director of Sydney-based business services firm BusinessDEPOT and Practice Ignition’s head of accounting (APAC), discusses how Practice Ignition helps in a volatile business landscape.
Picture: Rebecca Mihalic CA.
Q: As a payments and onboarding solution, how does Practice Ignition assist in managing your cash flow?
RM: There actually isn’t anything else in the marketplace like it. What Practice Ignition does is turn our engagement and onboarding process with our clients into a seamless electronic procedure. We can very quickly send out an engagement to a client and get them to sign off on the work we’re doing. We also use it as a payment gateway by taking all the payment information off the client.
Q: How does Practice Ignition’s cloud-based platform compare with your previous software?
RM: Our previous software involved a lot more manual work, which was always onerous. It involved having to prepare a manual letter, sending it out, getting the client to sign it and send it back. This meant we often had to start work before we were engaged, if we even got formally engaged. That was problematic because we weren’t following best practice.
Q: How does Practice Ignition protect your practice by reducing the risk of bad debt?
RM: As clients go through financial stress, there’s no doubt I’m increasingly exposed to trade credit risk. Thankfully, Practice Ignition is a tool that helps manage this. For instance, instead of raising an invoice at the end of the job, then crossing your fingers and hoping somebody pays after you’ve done all the work, I’m covered as I’ve got sign-off from my clients really quickly and get paid for the work I do.
Q: How else does Practice Ignition help protect you and make sure you get paid?
RM: A big thing for me is making sure I take payments details upfront whenever possible. Practice Ignition has been a game-changer because it combines engagement and payment gateway into one seamless process. This means that once a price is agreed with a client, there are very few reasons why payment details can’t also be provided. It’s a fantastic form of protection that’s helped put me back in control of our cash flow.
The Tax Practitioners Board recommends engaging our clients at least annually (at a minimum), as well as ensuring that engagement letters are updated whenever there is a change of scope to services offered. This is important, as the regulatory bodies place high importance on engagement letters. It’s often the first port of call in the instance of a dispute. Practice Ignition enables us to easily make changes to our engagement letter through the platform; this now takes minutes, not hours!
Find out more:
Start your 14-day free trial and access the CA ANZ Engagement Letter template at https://landing.practiceignition.com/caanz