This blog’s original was published about two years ago, and my goodness, how things have changed. It’s time for a major rewrite!
KATA has grown in headcount by about 50%. We’ve realized that despite how hard we try to communicate, we always have room for improvement.
Many of our clients will have noticed changes in our email communications (fewer of them, but they are longer and have more pictures and videos) and forms (many of which now include video instructions). Please make sure you read them.
We’ve also started using new tools, such as Keeper, to communicate with our bookkeeping subscription clients and provide them with a clearer understanding of the specific impacts of our questions.
Though we wish we could serve each and every client in a very personal one-on-one manner according to their communication style, the fact is, we cannot be a viable business and won’t have the ability to scale if we try to adapt to everyone’s individual communication style. To do so, we’d have to drastically change our approach to doing business and significantly raise our prices – neither of which we’re willing to do.
As we grow, we will continue adapting our communication techniques to leverage technology and be scaleable while not losing our personal relationships with our clients. It’s tough to balance, so if you have thoughts about this, we’d like to hear them. We’d like to hear from you if you have any feedback about how we communicate or ways we can do better.
As we continue adapting to a growing team in a remote-work environment, we implement different ideas and improved processes to ensure our team is supported. Beyond our regular weekly check-ins and use of internal communication tools such as Slack, we’re improving policies and using features of other tools more than we have in the past. We’re also doing more internal education on matters ranging from internal policies to tax rules and changes. As the skill sets of our team improve, our clients will benefit.
Our bookkeeping subscription customers will have seen our recent policy updates regarding documentation. (In fact, there really are no changes, we’re just reminding clients who is ultimately responsible for having good documentation – and how it impacts our ability to serve them.)
One of my most important jobs as the leader of KATA Accounting is to shepherd customers through the business growth journey. To help them better understand their financial situation, the risks they may unknowingly be taking, and their potential exposure to the CRA. We’re here to protect our clients.
One of the main reasons customers leave accounting and bookkeeping firms is because of communication – or rather, a lack of communication. Often, people will email or call their accountants or bookkeepers and not hear back for weeks or months! To us, this is completely unacceptable (and if we’re ever guilty of this – please call us on it!) Your taxes, your financials, and your bookkeeping – they are your business. CRA matters are time-sensitive. What good is it if you hear back after a deadline?
We always try to get back to customers as quickly as is reasonably possible, and we always like to make sure customers know how to get a hold of us and what’s going on with their situation.
Language you can Understand
We like to pride ourselves on speaking English, not Accountanese. Many times, even when the basic principles of a concept are understood, things can be made very difficult to understand through the use of language or style of communication. This is something we take seriously. We understand Accountanese because we wouldn’t be useful to you if we didn’t. We help translate the complex into plain English, so you know what’s happening. This is one of the ways we create happy clients and have been doing so successfully for the last eight years, adapting and getting better as we go. Watch our blogs and social media for education about matters that could affect you broken down into plain English.
Communication in the News
US Bank Failures
With the recent collapse of Silicon Valley Bank (SVB), Slivergate Bank, Signature Bank, and the US government’s response, some interesting recent case studies about communication – or the lack of communication exist.
For those who don’t know, SVB was a large commercial bank primarily serving the tech start-up field. Though opinions differ, it is somewhere in the top 20 US commercial banks. On Friday, March 10th, 2023, it could not fulfill withdrawal requests resulting in a “Run” on the bank. In addition, Silvergate Bank and Signature Bank, both with significant exposure to cryptocurrency companies, have all been taken over by government regulators in the first couple weeks of March.
US Government Response
On Sunday, March 13th, the US Government announced it was stepping in to guarantee the deposits held by SVB. Similar announcements have been made in relation to Silvergate and Signature as well. This is a move to shore up confidence in the US banking system and prevent fear from infecting other financial institutions.
The failure of these banks had many different causes. Some of it stems from risk-taking, some stem from interest rate increases, and some stem from fear. With significant exposure to start-ups and non-traditional industries, the challenges these industries face ripple through to the banks themselves. For instance, the collapse of FTX impacted banks with cryptocurrency industry exposure.
Additionally, the accounting methods used played a role. In the US, some industries can measure assets differently; sometimes, those measurements don’t align with reality. We won’t go into detail in this blog post, but all the major US news network business groups have been discussing these factors in recent days. This shows how important a clear understanding of the financial picture is to a business and outside parties.
Many of our app partners definitely qualify as start-ups. Since the announcement of the SVB collapse, our community of like-minded bookkeepers and accountants has been communicating with the companies we partner with to understand the potential exposure of our clients’ operations. As fortune has it, none of the App companies KATA partners have significant exposure to this bank failure.
However, the impact on the funding of start-ups can’t be understated. SVB greatly impacted the VC community and the early-stage start-ups that couldn’t find funding elsewhere. As a result, we expect to see three things. First, funding for start-ups will become more difficult. Second, some start-ups will fail because they have deposits with banks like SVB. Finally, as an investment in start-ups, particularly in the tech sector, dries up, there could be lasting effects on the US economy.
To date, these are some of the tech companies exposed to the failure of SVB, as reported by major US news outlets. Just because the company is mentioned on this list, it does not mean it is in trouble or will have disruptions to its operations.
Companies Using SVB
Some of these companies are big names that handle weekly billions of dollars of transactions. Several of them had relatively small deposits with SVB or worked with SVB on specific portions of their operations. To the best of our knowledge, all of them are making alternative arrangements to ensure business continues as normal. As of this writing, the App partners we use have pivoted to shore up their operations that could be affected by the SVB collapse.
When Communication Matters Most
All industries and businesses will face uncertainty and bumps in the road. It’s how you respond that makes all the difference. One thing that continues to impress me through this situation is the communication from our App partners. There have been feeds on Facebook groups where App partners are outlining if they’re exposed and if so, how they adapt.
One thing we’ve done and will continue to do at KATA is to report and resolve problems as soon as possible. A few of our customers have experienced this in the past. We are human, and humans make mistakes – how we respond matters – that’s what integrity is.
One of the adaptations we’ve made this tax season is to check for additional T3 slips in the first week of April before filing personal taxes. Some T3s are due March 31st, and by filing early, a handful of customers received reassessments when T3s were issued after their taxes had been filed.
By the time this blog is published, there will definitely be more news about the US banking system and the fallout of the collapse of these three banks. This was written on March 13, 2023.