The digital transformation that triggered the 21st century banking revolution and is now making waves in the accounting sector. It’s an exciting time, but with any significant change comes big challenges. Historically speaking, accounting has always been considered a relatively ‘safe’ sector: it’s a necessary service for all businesses with predictable revenue models.
Accountancy is still a necessary service – but its delivery has changed, thanks to digital disruptions and innovative solutions from tech-savvy firms, and predictable revenue may no longer be guaranteed. Cloud-based accounting operations have the power to outdo traditional and more manual accounting methods in terms of efficiency, accuracy and speed. As automated accounting becomes more mainstream, accountants need to look for important ways to future-proof their profession and stay relevant.
This is why more and more accounting firms are digitising their offer in response to market demands. However, embracing digital transformation is not just about adopting new technologies – it’s about developing a new mindset too. The real opportunity here is for accountants to use technology to offer more than number-crunching solutions and instead become business advisors to their clients.
Harnessing the digital mindset
The millennial generation is increasingly present in the workforce as employees, clients and bosses. This group is very switched on technologically – and expects a certain level of digital services and interaction in the workplace. Adoption of digital solutions is crucial for staff retention as well as business efficiency. Making Tax Digital (MTD), for example, is around the corner and will pose a real challenge to a large number of firms that aren’t prepared for it. Businesses that fail to make the necessary plans and investment to ensure they will be compliant by 1st April 2019 risk facing penalties – not to mention falling behind the curve.
However, the successful digital mindset is not solely focused on new technologies. It also values human engagement and emphasises the importance of strategy and culture. To get the most from technology, accountants need to strike a balance. Think about it: if you just use technology to automate compliance, what are your clients really paying for? You need to demonstrate value-added services and ascribe them the same level of importance as digitally delivered efficiencies.
Packaging your offer
How accountants revise their business models and fee structures in line with these developments is crucial. With administrative tasks and data entry streamlined thanks to automation, firms can consider offering, for example, more advanced advisory and reporting services. This is particularly valuable for firms with smaller clients; helping them compete with bigger firms that could afford to diversify their offer some time ago.
In a nutshell, becoming a business advisor means reviewing your client company’s financial data, identifying any problems, and coming up with solutions. Machine learning may eventually do some of this analysis – but it will never 100% guarantee the right answer. The need for human oversight and experience remains key.
When putting together a new fee structure that reflects these value-add services, you need to figure out what you’re actually charging clients for – and whether they are getting their perceived value for money. It’s also worth thinking about investing more time into content marketing to boost your market expertise and trustworthiness.
Building a digital culture
Becoming a digitally transformed accountancy practice requires hiring staff that are digitally savvy – or at the very least, demonstrate an enthusiasm for upskilling. To attract these employees, you need to tap into the millennial generation’s workplace goals and create a fun, appreciative working environment that offers clear career progression. You need to identify the gaps in your business and then look for the right skills to fill the open positions. If you battle to find the skills you need immediately, look at training opportunities to help your existing employees widen their abilities. Training is also a great way to retain good people.
Being a digital firm is all about long-term planning. You need to put together a strategy that plots where your firm will be in say one, three and 10 years. If you want to be able to grow your practice and increase your number of clients, you have to be able to scale all of your systems and processes. This level of planning will guide your business as it grows and help you achieve your objectives.
Key business benefits of cloud-based accounting software
Cloud accounting helps your business work smarter and faster. It provides better access to financial information and improves collaboration among teams as well as with clients. For accountants, this means you can review data in real-time rather than wait for clients to email outdated documents through to you. Multi-user access makes it easy to collaborate online with all stakeholders, using the latest information and updates at all times.
Everything is run online so updates to the systems can be run without disruption. It’s also easier to scale as you are working with software rather than out of date hardware or even physical tools like calculators. Information is backed up automatically and updates are typically free and instant. This means you can get on with doing the work that really matters to you and your clients. It also means that your business costs are reduced thanks to the elimination of on-site software management activities like version upgrades, maintenance, server failures and administration. All of these would be managed by the cloud service provider of your choice.
Migrating to the cloud
Many firms are already on their way to migrating to fully digital cloud practices. Now is the time to focus on hiring staff with the right skills, adopting the right technology, and developing relevant processes to build a completely streamlined – and digitally successful – workplace.
Migrating to the cloud requires a lot of forward planning; it’s not something that can be done off-the-cuff. You need to ensure that data is accessible as this will fuel your advisory services. Think about how all your existing technology fits together and choose the most complementary accounting software, plus accompanying apps, to build a comprehensive and user-friendly set up. One that functions for both you and your team – as well as your clients.
Choosing which apps to use is a bit like completing a puzzle. You need all the right pieces to complete the full picture – and each app will likely provide a specialised service in a key area. For example, Soldo, the multi-user business expense account, has recently integrated with cloud-based accounting software Xero to make it easier for businesses to monitor expenses thanks to an open bank feed integration that automatically syncs transactions. Other available apps can cover things like sales invoicing, payroll, time management, CRM and much more.
Becoming a truly digital accounting firm is more than just about technology – it’s about people, culture and wider business goals. The real power of technology is that it can take care of tasks that require little to no human interaction, creating more time for you to connect with your clients and build better, longer-lasting relationships. Part of this means offering them the services they value: good business advice that helps them achieve success.