And when it comes to providing accounting solutions online, the recent predicament virtual firm Ascot Drummond found itself in highlights the fact that making profit on the web, even for accountants, can be tricky.
But medium-sized firm Jayson Newman, which consolidator Numerica snapped up last week, has developed online accounting services that, it claims, will not only provide accounting firms with fully integrated online services and increase client bases, but plans to be profitable itself within two years.
The firm teamed up with John Kotsaftis, a South African-born IT-consultant, to form Easycounting – an application software provider that turns accountancy firms into dotcoms. And the idea has the backing of new owners Numerica, which has already praised its developments in web-based accounting.
Easycounting’s WEBLINK consists of a front-end customised website, where clients can submit financial data to their accountant, and a back-end system which allows accountants to process the data and submit reports back to the client, in one seamless process.
The purpose of Easycounting WEBLINK says Richard Messik, IT partner at Jayson Newman, is to create a ‘digital umbilical cord between the client and the accountant’.
The company claims Easycounting’s major selling point is the compatibility factor built into WEBLINK. Operating with all existing accounting software packages, as far as the Easycounting is aware there is no need to upgrade or introduce any changes to a firm’s existing IT infrastructure.
‘We know how much we have invested in our own [Jayson Newman’s] systems. You can’t expect accountants just to throw out their back-office software. Easycounting is compatible with all the leading brands of software packages,’ says Messik.
Kotsaftis, says the product will do for accounting what online banking did for banks, that is ‘remove the tedium in dealing with the accountant without losing the personal aspect’.
Furthermore, it will end the problem of a ‘time-lag’ between the receiving and processing of information from the client, keeping the accountant on top of his game.
And Easycounting also has an interesting sales strategy. The company charges only a nominal fee for setting up the website and back-office infrastructure. Rather, it believes going online will increase the appeal of the firm, and make money exponentially, based on the size of the firm’s client base.
‘We make money when accountants increase their business,’ says Kotsaftis. This means, in effect, Easycounting is dependent on the firms it signs up being successful in order for Easycounting to succeed.
Put simply by Messik: ‘We only make money when our clients do.’
And on the subject of success, the creators of this ASP are quick to end all comparisons with Ascot Drummond, the online accountants, rescued from administration earlier this week.
‘We’re a software house, they’re an accounting firm,’ says Kotsaftis
‘We are not replacing the accountant as Ascot Drummond attempted to do. We are simply making the process smoother. Even if I choose to use WEBLINK, I can still phone my accountant if I have any queries,’ he adds.
To date, Easycounting seems happy with progress it has made. Since launching the product in late September last year, it has signed 21 firms to its dotcom solution. Clients are from a broad cross-section of the market and range from one-man operations to firms with 15 or 16 partners.
The project is still in its start up phase, but the target is to be in surplus by 2002. Up until now all funding has come from Jayson Newman, with additional venture funding already secured to see the project through for the next 18 months.
And while many in the business community shudder at thought of going online, Easycounting’s founders exude enthusiasm about the future of accounting services on the web.
Says Messik: ‘Online accounting is disconnected from the e-commerce cycle. Accountants are realising the value of going online and clients are demanding this from their accountants.
‘The concept of the 24-hour accountant is coming. You have to make that available.’
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