One of the first things you learn when you start working with multiple SMEs is that no two are alike. In fact, in most cases, they expect totally different things from their relationship with their accountant.
One wants you to check in each quarter to make sure they’re not accidentally leaving themselves liable to fines, one wants you to hold their hand and review every single transaction, and another wants to drop all their receipts on your desk once a year.
But research shows there is one thing that almost every single SME wants from their accountant — and it’s not what you might expect.
Rather than greater tax savings, lower fees, or even more guidance on business finances, studies show that 94% of small business owners want their accountants to use the latest technology.
In an industry where 75% of practices still use spreadsheets at least part of the time and nearly one in five still use paper ledgers, there’s clearly a gap between what clients want and what accountants are actually providing.
While it could be tempting to write this off as clients merely trend-seeking (after all, 23% of SMEs still use manual accounting, and 16% use the shoebox method), digital accounting actually works out better for both accountants and their clients.
Why? Convenient communication, accuracy, and flexibility
Dealing with finances is stressful enough for most SME owners. The last thing they want is to get bogged down in an email chain, or stuck on the phone trying to resolve something that could have been pre-emptively addressed if the accountant had access to their clients’ books.
Digital accounting makes this easy, since you can look at their finances in real time, see what’s happening, and approach your clients with solutions and advice, rather than simply alerting them to problems.
There are some errors that even the most experienced accountants simply won’t catch manually. In fact, data entry errors are by far the most common type of mistake in analog accounting practices, along with mathematical errors.
These errors can add up to major headaches, both for you — as you try to correct the problem — and for your client as they’re left in limbo, wondering what on Earth’s going on with their accounts.
And while clients may be all right with a one-off mistake, over time this type of error can seriously undermine your clients’ trust in you, which is terrible for business.
Cloud-based accounting goes a long way towards fixing this problem, since the fiddly data entry that’s most prone to human error is taken out of your hands, leaving you to do what you do best — review the data and give your clients great advice based on it.
When you work in a more classic, spreadsheet or ledger method, you tend to get locked in a quarterly cycle of reviewing and analysing data. But the way the business world has changed in the past ten years has made this type of cycle less helpful, if not obsolete.
Using cloud-based accounting allows you to access your clients’ financial data much more quickly, often in real time, meaning you can give them advice based on the latest information, rather than a best guess based on the past quarter or two.
So what does this mean for your firm?
If you’re already using a digital accounting programme, congratulations! You should be pretty well set. You may want to spend a little bit of time on your content strategy or at networking events, educating your clients about the benefits they’re getting from your firm by working that way — or setting yourself up as their go-to expert for MTD — but other than that, you’re doing great.
If you’re still using manual accounting, don’t worry, it’s easier to switch to cloud-based accounting than you might think. In fact, most firms can do so in three steps:
1. Choose a cloud-based accounting programme
Look for a programme that has all the features you need, and consider any special needs your clients may have because of their industry (for instance, if they’re in construction, look for a programme that makes CIS returns easy).
You should also try out a couple of different programmes to see how intuitive they are to use. After all, you’re going to be using it regularly, so you don’t want to get stuck with a programme you hate!
Finally, look at reviews from existing users. A programme could have the best sales copy in the world, but you’ll usually get a better sense of whether it’s right for you by reading what other accountants have said. (More on how to choose the right cloud-based accounting software for your practice here.)
2. Transition your practice and clients to it
Once you’ve found the right programme, set a date to move all your information to it, and make sure you tell your clients what’s going on. Don’t worry if this sounds like a big ordeal, it’s really simple in most cases.
Many software providers (including Clear Books) provide one-to-one transition tutorials that only take a few hours, so make sure you take advantage of those.
Just one thing to remember here: when you make the change, make sure you go all the way. Keeping some clients on the old system and some on the new is going to make things hard for everyone, so pick a date, work out how many clients you need to convert to cloud accounting each month between now and April 2018, and take the plunge!
3. Educate your clients about the change and what it means for their businesses
You may not realise it, but you’re a huge source of expert information for your clients — so use it to your advantage. Use your social media platform or your personal interactions with clients to talk to them about why you’re switching to digital, and how that will allow you to provide them with even better service.
You could also use this opportunity to set yourself up as their go-to liaison with HMRC as Making Tax Digital approaches. Lots of SME owners are worried about making the transition, and are looking for reliable sources of information about it.
By ‘translating’ the latest news for them, you not only remind them of your expertise — you’re also setting up your practice for an easier transition, as you won’t be flooded with anxious clients wondering what’s going on and how they’re going to pay their taxes now.
The data is clear — digital accounting is not only the wave of the future, it’s what your clients want right now. So why not take the first steps towards digitising your practice today?
About Nick Pearce
Nick Pearce works as a Digital Marketing Executive for Clear Books plc, an online accounting software company.
Clear Books is a small business that supports small businesses. We provide clear and simple, award-winning software that's tailored towards UK businesses, allowing them to save time and work smarter by managing their accounts in the cloud. With our online software, small businesses and accountants can access their books anywhere, at any time.
We're also helping small businesses to prepare for the launch of Making Tax Digital, which will drastically change the way they submit their financial information to HMRC.