Accountancy Age/Sage survey: Charting the profession’s use of e-commerce

And this change of heart is being driven predominantly by the wave of internet take-up within the business community.

The second Sage/Accountancy Age IT skills survey confirms that internet usage is on the increase. But many of the steps taken by firms so far aappear defensive, with more and more businesses fearing that unless they engage with e-business they will be left behind their rivals if they do not keep up.

The survey of 1,000 accountants finds an internet access penetration increase of 50% year on year to a total of 69% this year.

Gavin May, general manager of Sage’s professional accountants division, believes that the result shows that contrary to reports, accountants have not been slow in taking up and implementing e-based software and are keeping up with other business communities. The increase in take-up is largely in line with the general business world and is very much being driven by the customer.

At present communication is the main use for the internet, with 76% of those questioned citing e-mail as a reason for using the internet. Some 50% said they used the internet for personal use while 45% said they used it for obtaining information and research.

‘We haven’t seen the internet yet being a major influence on traditional services but when communication really takes off to the point where accounts can be e-mailed rather than having to be posted from A to B – then the internet will really play a big part in the future of accounting,’ says May.

But despite the increase reported in access to the internet just 35% of accountants said their firm had a web presence.

Worryingly, 50% of respondents said they were unsure whether their two largest competitors had a web site, clearly evidence that despite the progress there is plenty of room for improvement when it comes to web presence awareness.But May says there may be a number of reasons for this apparent disparity. ‘These results may be because accountants are looking and focussing internally at how they are going to embrace e-commerce themselves,’ he says. ‘This is especially the case for the more forward thinking firms such as IT advice givers.’

Most accountants told Sage, which is the leading supplier of PC accounts software, that they thought the traditional client services deemed most suitable for offer on-line included tax returns (63%), payroll services (53%) and bookkeeping services (42%).

But encouragingly some 25% said they would be providing traditional services via their web site over the next 12 months, with a further 27% undecided. Hopefully more than that will embrace e-business. There is an increasing fear that accountants who do not embrace technology will be left behind. Factors such as Government targets for putting all of its services online by 2005 are likely to further encourage take up.

But it seems the possibility of an e-commerce ‘seal of approval’ does little to make accountants believe their e-business revenue opportunities will increase, with 58% saying they won’t. It is a little surprising that this figure is not higher given accountants traditionally cautious image.

Larger practices with a £1m turnover or more were more professional in their approach to e-commerce and are more likely to agree with the benefits of a seal however. Some 62% of this group said a seal would increase revenue.

But May cautions: ‘The problem with the seal of approval is actually getting it off the ground. For SMEs it may be expensive to gain the seal so there are barriers to it taking off. Also there is the issue of how the seal would be accepted and looked at.’.

The likely take up of the internet over the next 12 months is compounded with the finding that 55% of practices strongly agree that IT and computers help accountants to provide a more efficient service to their clients – compared to 49% last year.

Meanwhile 45% strongly agree that accountants who do not embrace IT and computerisation will be left behind. Again this was higher than last year when 40% agreed with the statement.At the same time the number of accountants who believe the modern professional is expected to offer a full IT/Computing service has increased by six percentage points on last year to 28%.

The number of practices that recommend accounting software has increased from 70% to 79%, with May believing they are in the ideal position to offer software advice. ‘In the past we believe accountants have been guilty about the level of relationship they have built up with their clients and the regularity of communications with them,’ he says. ‘They have been too slow. But the internet will help to improve the levels and regularity of information which flows from the accountant to the client for the better.’

The main type of IT advice offered is accounting which has risen from 82% to 96%, payroll which is down 1% to 64% and software selection (61%), while 83% thought it important or very important to offer IT advice to clients.May suggests that the role accountants play in influencing client IT buying decisions – a long-held position – is actually increasing.

‘The number of practices offering IT advice now is phenomenal. Some 93% saw the benefit while 73% actually offer it and there has been a large increase on last year’, said May.

But there were signs that accountants were not exploiting it fully as a commercial weapon, especially the smaller firms. Of the survey sample, 49% agreed that IT would provide new revenue streams for accountants; 28% of respondents were undecided and 7% disagreed with the proposition. However 64% of larger firms thought IT would provide new revenue streams.

At a time when the landscape of the accountancy profession is changing, there appears to be a need to look for new service areas to offer clients. Accountants are becoming the key advisers to small business. Perhaps of all the competing interest groups, they are best placed to capitalise on the e-business revolution.

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