Life on accountancy's online frontier
Accountant and Cloud pioneer Ray Backler moved all of his clients to an online accounting system back in 2004. Five years down the line he still has no regrets, writes Lesley Meall.
In 2004 sole practitioner Ray Backler decided to expand his firm, Capsa Accounting, and develop more value-added revenue streams. He knew that it would call for more staff (in addition to his bookkeeper) or radical changes.
"I didn't want to be the sort of accountant who just produces quarterly VAT returns and annual tax returns and then sends the client a big bill once a year," recalls Backler, who was keen to develop stronger working relationships with his clients.
"Compliance purchases tend to be grudge purchases," he observes. "I wanted Capsa to work more closely with its clients on a day-to-day basis, and offer them the sort of services that they would value," he says. "I really wanted to help clients with their businesses."
Ray Backler, Capsa Accounting
After exploring the potential of online accounting, he decided to take that path because it would help him to service his client base effectively and enable the firm to provide a more personal and improved level of service.
Once he had chosen his software as a services (SaaS) provider, Liberty Accounts, he set about converting his clients. "They range from sole traders to a business with a £4m turnover, employing 40 staff," he says, and their grasp of the Cloud concept was equally diverse, as were their approaches to accounting. Some were handling their accounts manually, some were using spreadsheets, and others had small business accounting applications installed.
"The migrations were phased, because we did them as we completed the year-end accounts for each customer," explains Backler. The incremental approach minimised the amount of work and upheaval for everyone involved: setting up opening balances, plus customer, supplier and employee data for each client. Backler also set up a secure online storage area, so that copies of important documents (such as reports and accounts) are always available.
One step beyond
Even today, putting all of your clients' accounts online would be a radical approach. But when Capsa Accounting made the transition back in 2004, it was revolutionary. "At the time, many firms of accountants had embraced websites," recalls Backler, "but they hadn't examined their internal procedures or tried to look at their clients' processes with a view to bringing them closer together."
Backler was aware of the advantages and disadvantages of the Cloud approach, but he was convinced the benefits for Capsa Accounting and its clients would far outweigh the risks - and they have.
"I work with my clients on a day-to-day basis using the online system and the current financial position of the business is always up-to-date, so it is obvious when additional work is required, and it's easy to make recommendations for additional revenue streams," he explains.
Clients appreciate the benefits too. "Because Liberty can easily be tailored to fit each client, some use it for bookkeeping, some for payroll, while others input invoices and let me do everything else for them," explains Backler. "Keeping everything up-to-date is much less of a burden for the clients and because they know that their bookkeeping, payroll, and tax compliance needs are all taken care of, they can concentrate on running their businesses."
On the back of this pioneering approach, Capsa Accounting is attracting new small business clients who may be initually dubious about the advantages of online accounting, but usually accept Backler's recommendation to use Liberty Accounts and are "fully convinced of the benefits, after about one year." Increasingly, some clients are attracted to the firm because they want to exploit the cloud.
"Some of them are very in tune with available technology," he says, "and have been struggling to find an accountant who can help."
Capsa Accounting continues to expand its web-based range of services and support. “We are in the process of developing short videos to help users get to grips with various routine tasks on Liberty,” says the accountant.
Each clip lasts between one and two minutes and is posted on YouTube with links back to the firm's website - so support is permanently available for day-to-day functions.
Five years after making his leap of faith, Backler is effectively running a "virtual" practice. While he visits some clients, his relationship with many of them is purely online.
"Statutory accounts and tax returns are emailed to clients in PDF format for approval, and we use TaxCalc software to produce tax returns and to submit online to HMRC," he says. "We have simplified and streamlined our processes and supported this with additional investment in technology," he adds. Doing so has increased the firm's capacity and made it easier for Backler and his bookkeeper to work more closely with each other and their clients.
"We now have three office-based desktop PCs, two WiFi laptops and we use Apple iPhones through O2 to keep in touch via email while we are on the move," says Backler.
The iPhone is fine for some internet access, but when he wants mobile access to the Liberty online accounting system Backler opts for an HTC Shift "tablet" laptop, because it has a much larger screen and offers mobile broadband anywhere 3G+ is available. "I gave this method a five-week trial late last year, by supporting clients from Australia," he says, "and it was very successful."
This style of remote working is what many accountants imagine when they contemplate setting up a virtual practice, so it's good to find somebody who has lived the dream first hand. As you might expect from a pioneer, Backler thinks everyone else should follow in his footsteps.
"New clients often mention the staid approach of many high street practices that don't seem to want to help clients with their businesses. The latest technology must be seen as the way forward rather than a barrier that's used to resist change."