Accounting Manager United States Army Test & Evaluation Command
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How To Fix Common Client Financial Mistakes

Nov 7th 2017
Accounting Manager United States Army Test & Evaluation Command
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A rogue client misinterpreting a text or making the wrong financial call is every CPA’s worst nightmare, but seemingly few of them know where to begin when it comes to fixing those mishaps. Being ready to tidy up your client’s mess and prevent future mishaps is perhaps the most vital part of every accountant’s job, so where should they begin?

By reviewing the most common financial mistakes made by clients and their accountants alike, you can come to have a better understanding of what leads them (and you!) to make such mistakes in the first place. Only after familiarizing yourself with the issues at hand can you work towards developing a successful system towards avoiding future failures, so hit the books today to avoid headaches tomorrow, and follow these easy tips.

It’s not all about the client

Nobody likes to admit when they’re wrong or when they’ve messed up, but it seems that accountants in particular want to avoid taking the blame when things go wrong. The reality is, however, that your client’s mistakes are ultimately your mistakes, and you’ll need to work in tandem if you want to avoid mishaps or fix them once they’ve occurred. Before even delving into finances, then, it’s important to remember that everyone makes mistakes, but only by taking responsibility and relying on the cool-headed calm gained from years of training and experience can you fix them.

For instance, common mistakes made by your clients, such as miscalculating startup cost or failing to adequately plan through projects all the way through, often occur because they don’t know where to begin in the first place. Sometimes, your role as a CPA necessitates that you step in from the get go, and help your clients make wise decisions from the start. Part of this role is acting as the voice of reason; your clients should understand they can’t be making financial decisions from their gut instincts, but rather should focus on what the data is telling them.

It’s long been established that the financial industry has a yes-man problem. Whether they’re just naturally people pleasers or merely trying to further ingratiate themselves with clients, accountants often feel uncomfortable saying “no”, and sometimes even use their client’s emotions to steer them in the wrong direction for their own gain. Operating ethically and bringing success to both you and your client necessitates that you avoid such behavior, and instead rely on hard facts and calm, rational thinking.

Only after you and your client have established a relationship built on trust and, even more importantly, rationality, can you both achieve your financial goals. Yet once you’ve ensured transparency and logic within your relationship, what’s the next step towards avoiding common mistakes?

Be proactive, not reactive

Like in all things in life, you achieve more as a financial adviser by being proactive rather than reactive. Rather than waiting to dry yourself off after the storm, get your umbrella ahead of time, and brief your clients on some of the worst behavior that they should be avoiding. Then, establish a game plan for when things go wrong, so that you instantly know what to do when things go south.

To put it simply, some mistakes can’t be avoided. Whether it’s market failure, nefarious outside actors such as hackers stealing your client’s information, or a myriad of other dilemmas, things will inevitably go wrong. Establishing a proactive mindset, such as using sitecore web development, when it comes to financial decision making will thus not only ensure you avoid calamity in the long run, but also that you respond to it quickly and sufficiently when it does occur.

Establishing a timely, accurate reporting system well ahead of time, for instance, will help prevent one of the most common financial gaffes: late or inaccurate statements. Having a system in place will ensure you fix this mistake as soon as possible, and will identify errors like this ahead of time so you don’t wind up with egg on your face in front of your valuable customers.

Your clients are human, meaning they’ll have certain natural tendencies that are hard to avoid; they’ll be overly cautious sometimes, for instance, or far too brash and quick to rush into things during other periods. Having a proactive mindset helps you overcome these natural flaws that quickly lead to messy financial mistakes, and systemic thinking that plans for errors ahead of time helps mitigate some more detrimental aspects of human nature.

For accountants, there’s often nothing harder than telling your client they’re wrong or helping them clean up a financial disaster, but few things are more important to your long-term success and happiness. By getting started on your planning now and being brutally honest and transparent with your clients, you’ll find yourself avoiding financial mistakes and mitigating what few are still made in no time.


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