FP&A apps: Are accountants keener than their clients?

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Are forecasting, planning and analytics apps bringing clients closer to accountants or being used to keep them at arm's length?

The launch of AccountingWEB’s forecasting, planning & analytics (FP&A) reviews and the recent analysis of adoption shows just how competitive this part of the software market has become.

The story, however, is quite nuanced and opens up some interesting views about what businesses (rather than accountants) value, the use of enhanced reporting to engage with clients, and to what extent they can be used to introduce and scale higher-level services - the messianic cry of cloud in recent times.

The first points to the heart of the debate: is the profession keener to promote products more suited to them rather than their clients? As previously reported in July, cash apps are focusing the interest on forecasting, with more than 50% of responses choosing cash-focused services Fluidly and Float. Furthermore, a much higher proportion of these were from businesses users rather than accountants.

With Spotlight and Futrli now well-established brands within the accounting sector, this seems to suggest a discord between highly specific cash monitoring products that are desired by small businesses, and a more complete management information pack that plays to the interests of the accountant.

Investigating this further with accountants and vendors shows there is some debate.

Enhanced information and the advisory debate

At a fundamental level, using FP&A tools provides the opportunity to have a conversation with clients and this is universally seen as a positive. But, without trying to resort to the banal, it really does depend on how they are used.

Offering a vendor’s point of view Phil Hobden, head of sales at Futrli, said that accountants looking to use their product correctly should be using it to start conversations with their customers. “If you use software to replace that interaction then some of your clients will seek it from other places,” said Hobden.

However, this is not always in everyone's skillset. The use of services which produce more complete packages of reports drive towards accountants being seen as advisers, but perhaps is not being utilised as such. Alan Woods of accounting firm Woods Squared explains: “They think that by having this solution they can now call themselves advisers, The drive to be seen in this space means that using tools like these gets them a tick in that box”

The practice of setting up automatic reporting to be sent to clients received short shrift from Mark Telford of Telfords Chartered Accountants, who felt that simply sending out management packs with “pretty graphs” and not scheduling a follow-up discussion with the client was a “waste of time” and a “blunt tool”.

However, according to Woods, it can have its uses. “Some accountants have meaningful conversations about what the reports show and what actions should be taken, but as they have a bundle of 10 or 20 or more clients on the software they also use the standard reports and alerts as a way of adding value to those that perhaps they don't provide management information for”.

Overplaying the advisory angle?

Perhaps then, the link to messaging from the more enhanced reporting tools around advisory has just been played too strongly?

For Will Farnell, practice owner and author of The Digital Firm, his only criticism is that the tools are being pushed as the missing link between accountant and advisory. “No software will create a relationship,” he said. “People need to do that and advisory happens when clients will ask us every question they have.”

Woods agreed, and also suggested that without these tools scaling the advice side is hard, “It adds scale to the advisory service - which I think is the biggest challenge.”

Right product for the right market

The other angle is whether higher-level reporting tools actually have much of a market. For Carl Reader of tech-first firm Dennis and Turnbull, the products being sold aren't necessarily relevant for the markets that most accountants serve.

“Of 5.7m businesses [in the UK], only 1.1m have more than one employee - and even then, the vast majority will be 1-9 employees,” said Reader. “Most of those don't need anything more than what Xero or Quickbooks offer, other than simple cash projections.”

Glenn Martin from north east-based firm Avery Martin develops this to a view that the opportunity for accountants to add real value is limited. “In time the true value of these products probably lies with FDs buying direct,” said Martin. “Small clients don't need the enhanced reporting, bigger firms have in-house provision, the bit in the middle serviced by external accountants is quite a slim space.”

Cash as a critical service

Cash, however, is a universal theme for businesses and has been an essential cornerstone for conversations with clients. According to Martin, it is little wonder, therefore, that cash-focussed apps seem to be finding more of a market. “Cash is an issue to everyone, so forecasting cash balances has real value and knowing there is money to pay wages would appeal to greater uses.”

Caroline Plumb, CEO of cashflow management software Fluidly, takes the view that more flows from cash insight. “Can I make payroll or the VAT bill? Can I take a dividend? Where should I be focusing?” asked Plumb. “Our accounting partners tell us it helps them talk about the issues that really matter, plus business users REALLY care about cashflow”.

Plumb also believes that the adoption of cashflow tools can encourage greater uptake of other efficiency-boosting apps. “It makes them more timely users of receipt-scanning software and bank feeds and generally better at getting data into the general ledger as they want the outputs of forecasting,” said Plumb.

So, is the tension mounting between the highly practical, cash-focused products and those that can provide great management information? It would seem from the analysis that the former is in the ascendency, but there is no doubt of the value that can be delivered from detailed management information in helping to steer the direction of a business - providing they have the size and complexity to warrant such as a service.

Making different decisions

It’s not difficult to understand why businesses voted more for cash tools when it can be so intrinsically linked to day-to-day decisions and the daily routines.

However, as Kelvin Gieck, co-founder of cashflow app Helm, said, software doesn't create relationships, but they are certainly great enablers depending upon how they are used. “The more dialogue they raise on both side of the accountant/client relationship the better,” said Gieck.

About Richard Sergeant

Richard Sergeant

Specialist insight and business development support for accountants and their vendors. Cloud advocate with a pragmatist eye.


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11th Oct 2018 12:30

The majority of my clients are artists and craftspeople who are not interested in FP &A tools. What they are interested in (those who are making a reasonable profit) is how much tax they will have to pay and if and also when they should register for VAT. They appreciate that I will, if necessary, do the artists' averaging calculations. I am also interested in their field of work and understand the various stresses that are involved. To me this is much more important than trying to prepare forecasts. It's not as though I was dealing with a publican who can predict reasonably accurately the number of pints he/she will sell in a week.

I'm also fairly sure that if I started sending clients forecasts and graphs etc they would think that I was just trying to get more money out of them.

Thanks (2)
to Sue Murby
11th Oct 2018 15:54

Great point.
Personally having a live cashflow picture has been a godsend. Impossible on a spreadsheet, and saved me hours a month (and a lot of stress!)

Thanks (0)