IN AN INCREASINGLY competitive market, accountants cannot contend on price alone; improved client collaboration and proactive delivery of added value services such as business planning and cashflow management are becoming a critical component of the accountancy portfolio.
However, without real-time access to transactional level client information, it is impossible to achieve the levels of efficiency and automation required in a lower-cost marketplace or access the in-depth insight demanded to deliver innovative, revenue-generating services.
Tight integration between cloud-based bookkeeping software and ‘on-premise' accounts production systems is set to change the way accountants and clients work together.
The accountancy world is at a crossroads. With declining fees and an erosion in customer loyalty, practices face tough choices: de-skill to cut costs and attempt to retain profitability with the same business model or look for a new way of generating revenue and building client relationships.
In recent years, practices have exploited a number of new technologies in a bid to gain efficiency advantages and improve client services. Many have switched from the annual fee and client meeting to a monthly service which includes business information and services as well as standard compliance activity. The use of secure access to clients' online bank accounts has enabled accountants to track cashflow and offer advice, while the ability to integrate on-premise bookkeeping and accounts production software has helped to streamline some processes.
This has not, however, been enough to stave off declining revenues.Clients continue to demand lower pricing; switching between practices is becoming increasingly commonplace and firms are struggling to build strong client relationships.
The problem is that none of the changes made to date by the firms deliver the real-time access to transaction level data required to drive the really innovative collaborative services demanded by the new market. Accountants still rely on incremental provision of summary level data by clients – typically an emailed Excel file, on a monthly or quarterly basis.
While the ability to automatically pull this data into the accounts production system has reduced some of the basic tasks, without transaction data it is impossible to resolve the day-to-day queries without time-consuming queries to the client.
As a result, resolving basic issues, such as the underlying costs of an expenses figure or whether something is a justifiable expense, still demands repeated emails/phone calls between the accountant and client – time that could be better spent by both organisations.
The only way accountancy practices are going to be sure of remaining profitable and staying in business is to make some fundamental changes. Clients want real-time support and advice but they also want it at a lower price point. The only option for accountants today is to exploit cloud-based solutions that deliver real-time access to their clients' transaction level data.
By enabling clients to post all bookkeeping information into a cloud-based system that is tightly integrated with the accountant's existing on-premise accounts production system, the entire process can be fundamentally transformed. From resolving basic queries in an instant without bothering the client, to exploiting in-depth insight to deliver better, more relevant services to clients, the cloud provides the opportunity to address and reverse the gradual erosion in revenue and client confidence.
Creating a single, consolidated end-to-end process in this way fundamentally transforms every aspect of the accountant/client working relationship. The direct integration drives out paper, streamlines processes, and minimises direct client queries, creating a far more efficient and cost-effective accounts production process.
With real-time access to information, there are no delays in accounts production, ensuring deadlines are well managed. With direct iXBRL filing to Companies House, accountancy practices can exploit additional efficiencies, while tax filing for individuals and businesses can also be streamlined.
Accountants can also impose control over the quality of data by checking clients are correctly posting data to the right codes and using the software correctly, enabling early intervention should a problem arise, avoiding the risk of costly and time consuming mistakes.
Critically, by improving the visibility and depth of information available, accountants now have the chance to offer value-added services such as cashflow management to business planning, forecasting and benchmarking.
This proactive, collaborative approach is no longer an option: it is the only way to retain client business in an increasingly competitive marketplace. Every accountant accepts the need to become more proactive and offer a range of innovative, chargeable services. But this cannot be achieved with summary level data.
It is time for accountants to embrace real-time information, attain a new cost model, and create the added value services that will become a key market differentiator.
Wendy Rowe is head of product management at CCH Software, a Wolters Kluwer business
You may also like
If budgeting is to have any value at all, it needs a radical overhaul. In today's dynamic marketplace, budgeting can no longer serve as a company's only management system; it must integrate with and support dedicated strategy management systems, process improvement systems, and the like. In this paper, Professor Peter Horvath and Dr Ralf Sauter present what's wrong with the current approach to budgeting and how to fix it.
In this white paper CCH provide checklists to help accountants and finance professionals both in practice and in business examine these issues and make plans. Also includes a case study of a large commercial organisation working through the first year of mandatory iXBRL filing.