Online Accounting: An Opportunity For Collaboration

With easier anytime access, a reduction in admin processes and lower startup costs, it’s not surprising that more and more SMEs now prefer to use online accounting systems. But how is the steady migration from on-premise accounting software affecting the relationship between clients and their accountants?

The changing face of accounting

There’s no doubt that online accounting is rapidly becoming mainstream in the UK. Search for a term like “online accounting for small businesses” and you’ll find dozens of suppliers wooing SMEs with free trials, low monthly fees and the promise of hassle-free accounting.

How should accounting practices respond to this new business landscape? What impact will it have on the way they run their own businesses and the way they interact with their clients?

The advantages of online accounting are obvious. For the end user it offers simplicity and ease of use, combined with 24/7 access, reduced IT and admin, genuine scalability and low startup costs. What is good for your clients, of course, is ultimately good for you, but the steady drift to online accounting is not without its challenges.

Online accounting simplifies and automates accounting functions, turning a service (“My accountant does my books.”) into something that may feel more like a commodity from the client’s point of view. Just as traditional, face to face banking is being challenged by online banking, and High Street insurance brokers have largely been replaced by comparison websites, so online accounting has the potential to de-personalise accounting services and encourage a transaction-based mentality.

Responding to the challenge

One of the key benefits of online accounting is that the practice can embed itself into the online accounting system so that they become the public face of that system. Clients should therefore log into the online system via their accountant’s own website. Monthly fees for the software can be incorporated into a single, inclusive charge for accounting services. By tying the technology and service elements together in this way, you can reduce the chance of clients treating both as if they were simply commodities.

Secondly, the practice should exploit the new opportunities for collaborative working that online accounting provides. This advantage arises quite naturally from the fact that when you and your clients use an online accounting system it’s as if you’re sitting side by side, looking at the figures together. When either of you enters new information into the system, it’s immediately available to all parties.

By contrast, on-premise systems tend to keep accountants and their clients at arm’s length. From time to time clients supply source documents or send in files for the accountant to process and only some time later will the two meet to discuss the results.

The advantages of collaborative working

Closer client collaboration, made possible through the use of online accounting systems, addresses three key concerns of the practice:

  • Standing out in a crowded market: In a market where compliance services have become commoditised, collaboration sets you apart from the crowd and gives you a distinctive character. Clients and accountants who work collaboratively through an online accounting system have a much stronger sense of working in partnership.
  • Making real-time decisions: By giving all parties shared access to accounting data which is updated in real-time, online accounting systems improve financial insight and make it much easier to assess the impact of business changes. Improved decision making will ultimately improve company performance. Collaborative working, based on real-time financial data, gives you the opportunity to offer advice whenever it’s needed, not just at quarterly or annual reviews.
  • Adding value: Increased client satisfaction drives higher value work and higher margins. By working collaboratively and helping your clients to make better decisions, faster, you get more opportunity to demonstrate your value and importance to their businesses and more chances to sell added-value services such as business advice and tax planning.

A collaborative future

Online accounting is already changing the face of the accountancy profession and the rate of change will only accelerate as more and more SMEs make the switch. Like all new technologies, online accounting creates opportunities as well as challenges; however the benefits are clear.

Probably the most significant opportunity for accounting practices is the chance to create a collaborative working environment with their clients. There are, of course, many ways to work collaboratively but online accounting presents a genuinely new way of doing this. Only through online accounting can clients and their accountants work in parallel on the same real-time financial and business data to help inform decision making.

The practices that make the most of these new, collaborative opportunities will undoubtedly be laying the foundations for sustained growth in the future.

SHARETweet about this on TwitterShare on LinkedInShare on FacebookShare on Google+Pin on PinterestDigg thisShare on RedditShare on TumblrShare on StumbleUponEmail this to someone

Barbara Kroll is the Managing Director of Twinfield UK, a brand of the Wolters Kluwer Group. Prior to her appointment at Twinfield UK, Barbara was the Segment Vice President for Wolters Kluwer Tax & Accounting in Europe. Previously, she had roles as Vice President in Wolters Kluwer’s Corporate Strategy Group and Director of Online at McGraw-Hill Construction, both in New York. Barbara started her career as a strategy consultant with L.E.K Consulting in London and Chicago. She holds an MBA from the Harvard Business School, an MSc from the London School of Economics, and an MA in Economics from Cambridge University.