Managing by exception, saving you time: how Aider helps advisors manage by exception

This article answers the question ‘what is management by exception'?

Alix Dougherty
Mar 11, 2022

An insightful piece that dives deeper into the accounting term ‘management by exception’ (& how Aider fosters this approach)

If you've been reading advisory articles and keeping up with the trends in business, you've probably come across the phrase ‘management by exception’. It sounds good, doesn't it? We all want to be exceptional in our clients' eyes, but in the world of business or accounting speak, what does it mean to manage by exception? 

What if we told you that managing by exception is an effective and straightforward way to implement more efficiency into your advisory workflow so that you can scale your practice? We pulled together this blog to dive deeper into the definition of management by exception, explore how it can help your practice, and how Aider’s Advisory Intelligence Platform helps instil this approach into your business. 

Accounting speak: what is management by exception? 

Drilling down on the phrase ‘management by exception’: a definition 

In the accounting world, management by exception is a management system where the people at the top only step in when there's a significant deviation from the norm, or from an expected outcome. For accountants and bookkeepers, this means observing your clients' financial and operational data, and only raising the issue if results represent a substantial difference from what is expected from a client's business.

The strategy of managing by exception trusts clients to run their own business 

When there is an issue in a client's operational or financial function, the advisor can hone in on the specific problem and proactively help clients develop a solution. In management by exception, the 'exception' component means that you're reaching out to clients when there's an exception to how things normally run.

To get a clearer picture of this approach, think of vital sign machines in hospitals. Suppose there are no sounds and a patient's vitals are normal. In that case, doctors and nurses attend to other priorities, and the patient only receives scheduled appointments. However, when the machine makes frantic beeping, signalling that vitals have gone outside the standard range, hospital staff can swoop in and help the patient before things get worse. Similarly, with management by exception, advisors can help clients when they need it the most.

The advantages: so how does management by exception help your practice? 

The main objective of management by exception is to run the most efficient practice where you are only involved in your clients' businesses when an issue needs to be addressed. 

There are many advantages to creating an advisory workflow that embraces management by exception. Here are a couple:

✓ Maximise time efficiency  

Management by exception saves you time by reducing how many financial and operational check-ins you need to perform to help your clients. This frees up time to scale your practice and expand your services.

✓ Offer the best services, fast 

Management by exception enhances the value of your advisory services because you can rapidly reach out when your clients need your help the most. When your management by exception methods are well set up, you'll know when something goes wrong with your clients' businesses. With automated systems in place to immediately alert you of issues, you'll be able to respond before the 'exception' can have a negative impact. 

And this leads us to the next point; how Aider – as an intelligent and automated system – helps your practice adopt the ‘management by exception’ approach…

Smart software tools (like Aider) that will help your practice manage by exception

Without the right tools, it can be unrealistic to implement management by exception strategies into your practice. You'd have to determine what is normal for all of your clients and then be able to know when something goes wrong before it becomes a disaster for each of their businesses. 

In order to manage by exception without tools, accountants and bookkeepers would have to open each of their client's organisations in Xero, look at the data, access multiple and potentially unreliable reports, and analyse whether each client is on track and operating as expected. Once you factor in cost and time factors, there's no way for you, as an advisor, to sustainably support all of your clients. This is why automation is so important in the accounting and bookkeeping space. 

Accountants and bookkeepers need powerful and automated tools that tell them when something deviates from the norm, so that they can easily and efficiently step in and advise their clients. 

A tool like Aider’s Advisory Intelligence Platform makes the approach of managing by exception, effortless for advisors

Our advisory software solution provides advisors with an aggregate view of their entire client base, featuring all of their clients’ data and performance information in one place. With an all-in-one view, accountants and bookkeepers can identify and act on client opportunities and risks promptly. 

Aider’s Advisory Platform optimises artificial intelligence so that any significant variations in a client's business trigger’s an alert system, notifying you about which clients need your proactive attention. With insightful benchmarks and real-time client information built-in, Aider provides you with everything you need to implement the management by exception approach into your practice. 

Management by exception helps accountants and bookkeepers be their clients' trusted advisors

With smart software solutions like Aider, you can easily implement management by exception into your practice, so that you can provide your clients with proactive (instead of reactive) advice. This will help address variances before they become problems. With the right attitude and the most advanced tools (like Aider) management by exception will streamline and scale your practice.


Ready to manage by exception? 
Book a free demo of Aider’s Advisory Intelligence Platform here.

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