There is far more to accountancy than compliance, writes Barbara Kroll, managing director of Twinfield.
And small to medium sized businesses want far more from their accountants than just basic management accounts, VAT and tax returns.
With the shift to online technologies and the cloud, accountants now have real time access to accurate, detailed client information - so don't waste it.
It is unfortunately still true that many accountants remain focused on reactive, box-ticking activities. The provision of management accounts, VAT returns and tax returns is clearly an important service, but it is a passive one.
It is based on simply sifting through data, from physical receipts to XLS files and data from accounting packages, and completing standard processes.
As a result, their financial expertise can be undervalued: accountants have an innate understanding of financial data, and they should use this to provide specialist insight.
The stumbling block for the accountant is often understanding how to move from reactively ticking check boxes to pro-actively providing advice. Solid advice demands solid, up-to-date data.
Now accountants have started to embrace online technologies because they provide access to real-time, high-quality data.
But many have paused half-way between ticking boxes and providing advisory services: they offer online accounting software, but seem to be in the business of marketing the software rather than their own services. Why? Software is only a means to an end. It is a practice’s financial acumen that is, and has always been, the fundamental area of differentiation – and the online accounting model provides a cost effective way of delivering a broader range of services than commoditised tax returns.
So how are accountancy practices going to evolve beyond compliance and exploit their financial acumen? The answer lies not only in creating a set of valuable services but in demonstrating to the small to medium sized business the importance and value of their own data.
Gaining in-depth understanding of their financial data is the key to insight that supports an SME’s critical business decision making, and this can only come from the knowledge within the accountancy practice.
Likewise, accountancy practices need to recognise the real opportunity the online model provides to take advantage of their ability to secure rapid access to a client’s financial data in order to provide insight and transform the range of services that can be delivered.
So how can accountancy practices follow the trend towards cloud-based solutions and find a way to stand out from the crowd? The key is to focus on the service, not the software.
Offering a client a practice-branded set of services that can be provided via the accountant’s own web-based book-keeping solution will change the clients’ perception – and create a differentiated offering in the market. The client logs in via the accountant’s web site reinforcing the brand and providing a great chance to up- and cross-sell additional services, such as business planning and wealth management.
Small to medium sized businesses want business advice, and if the accountancy marketplace is to provide businesses with the services required there is a need to evolve beyond acting as a front for software packages.
It is time for the accountant to rediscover the value of competing on the quality of services, people and experience.