Do You Offer Spending Management Services?

Many accountants and bookkeepers offer their clients additional services outside their core bookkeeping, tax or accounting services, either as an a la carte service or as part of a tiered pricing strategy. Some of these services take more time to develop and deploy than others, and some may have higher associated costs. Spending management services is one type of additional service that many practices may already offer – without even knowing it and without charging for it.

Here are some questions that Joe Woodard recently answered about spending management as a service.

What is spending management?

There are three key components of spending management:

• Collection and classification of expenditure data, which bookkeepers already do through routine bookkeeping processes,
• Review of expenditure data to determine accuracy of source materials provided, compliance with policies and procedures and over or under payments made to vendors, and
• Analysis of expenditure data to improve efficiencies, monitor controls and verify that expenditures are necessary for business operations.

What benefits will clients receive from your spending management services?

Clients will see several benefits when they engage with you for spending management. First, improved efficiencies drive both financial benefits (e.g., fewer employee hours spent on filling out expense reports and fewer employee hours spent on processing expense reports) as well less quantifiable benefits (e.g., peace of mind knowing that efficient processes have been put in place and are appropriately monitored). In addition, the ultimate benefit of spending management is reduced cash outlays which drive increases in gross profit margin (for costs) and net income (for operating expenses).

What types of spending management services can you offer your clients?

Before listing types of spending management, it is important to again point out that many bookkeepers and accountants already do some of these services for at least some of their clients. Unfortunately, they group these services under the umbrella of “bookkeeping” and give it away for free.

As you read this list, think about your client pricing. Do you bill for these services? If you don't, you should.

Budget creation, curation and enforcement – Most small businesses operate without any formal budgeting or forecasting. Those businesses that do have a budget rarely curate it throughout the year for changing environments, economic impact, business changes, new or retired products/services, etc. And those that curate their budget rarely have a formal structure for budget enforcement. Creating, curating and enforcing a budget is an extremely valuable service that you can provide your client, especially when combined with cash flow projections and accounts receivable monitoring.

Expense reimbursement policies & procedures – Most businesses operate without any formal expense and reimbursement policies or procedures and many of those that do have no formal structure for expense reporting, approvals and enforcement. By helping your clients develop policies and procedures and coupling those with expense solutions such as software-driven spending cards, you will create efficiencies and mitigate the risk of “maverick” spending and fraud.

Expense reporting management – Even for companies that already have expense reimbursement policies and procedures, many companies do not monitor or enforce them. Expense reporting management includes ensuring expenses are recorded accurately and in compliance with policies and procedures, are within applicable budgeting tolerances and fit within vendor relationship management policies (e.g., membership or volume discount programs).

Transaction monitoring and strategic purchasing – This type of spending management service involves anything that happens in a recurring manner. When you offer this type of service, you will be looking at software subscriptions (SaaS) expenses and automated recurring payment for non-software services. When performing SaaS monitoring, you will help your clients by researching duplicate payments, tracking subscription expirations/terminations, reducing overlaps of services between vendors, and researching opportunities for “bundling”. Strategic purchasing includes monitoring loan and/or credit card pay-off timelines, expired/terminated services for administrative vendors, and periodic renegotiating for services.

How should accountants and bookkeepers price spending management services?

Pricing is surprisingly straightforward. First and foremost, you deserve to be compensated for the value you bring to your clients.

Second, you can develop and deploy a new pricing strategy fairly quickly. Woodard has teamed up with Intuit QuickBooks® around a four-week “Strategic Pricing” workshop. Intuit is providing full scholarships for this workshop exclusively to members of the QuickBooks ProAdvisor Program. The next Strategic Pricing Workshop will start on July 7, 2021.

If you are a ProAdvisor, apply for the scholarship here.