Digital and Online Accounting Services: Catering to the Digital World
Today’s service business owners and managers are smarter than ever and demand an ever-increasing amount of real time information. They embrace technology, digital and social media and can make decisions quickly based on financial and operational dashboards. What we have noticed at our accounting firm is that to flourish we need to be able to accommodate their thirst for services and information in a much different manner than Gen Xer’s and Baby Boomers before them. We’ve noticed that we are not alone in making this transition to the accounting firm of the future as there are many of our peers that are also catering to this new information thirsty generation.
Online Accounting Services with an Industry Specialization: Many accountants realize that their clients expect them to be thoughtful and insightful about not only general accounting and tax information but the common operational issues and government regulations affecting their industry. Accountants who have gone down this road of “Niche Accounting” can not only understand the tax and accounting aspect of decisions, but how decisions will affect the entire company.
Gross Margins: Many financial professionals will agree that the most important key performance indicator of any business is gross margin. Why is this number so important? It’s because the gross margin is the fraction used to determine the rate at which overhead gets paid and ultimately where break even is reached. Theoretically using the gross margin methodology, a business owner calculates how many units of a product or service needs to be sold to break even and ultimately profit. The accountant who specializes in the service industry understands that those units are synonymous with hours worked by various workers and can in turn formulate pricing and compensation policy while making sure that these policies don’t run afoul of Department of Labor guidelines.
Online Accounting Efficiency: Paper is out, Digital is in:
In our experience successful service business owners overwhelmingly prefer digital document storage over paper. It allows them full access to their documents when needed. Rather than calling their accountant to get a copy of a financial statement or a tax return, accounting firms who have gone paperless provide access to data vaults that are encrypted and provide tiered access to clients depending on their role within the company.
For example, the owner can view tax returns, personal financial statements and other sensitive information while the general manager may only have access to operational or sales reports. These data vaults allow client companies full access 24/7 without having to wait on a document request from the accountant.
Online Accounting: The Cloud Based Accounting Systems:
Companies who use cloud-based software know that it provides flexibility in terms of 24/7 access anywhere and anytime there is internet access. Cloud solutions are usually subscription based, making the monthly fee predictable.
The most advantageous aspect of a cloud application is that there are no updates to install and the user is always plugged into the latest version. Since the application is hosted remotely all users log in and are instantly connected in real time. Most of our clients use Quick Books Online which is easy to use, is reasonably priced and provides powerful reporting.
Accounting Fees based on Flat Rates/Fixed Fees as opposed to Hourly Billing: What we hear from our clients is that consultants, accountants, lawyers and other professionals who have open hourly billing policies make them feel uneasy. The fact is they sell time and those time charges may not always be in line with expectations. There is nothing worse than a big fat unexpected bill. Fee based services negate that problem and services are priced based on value provided at a predetermined fixed price. Value pricing and how to successfully implement it is one of the most popular topics in accounting trade journals. Many progressive accounting firms are tending toward this model and clients seem to embrace it.
Services that include outsourcing non-core competencies such as bookkeeping, bill paying and invoicing: Traditional accounting firms provide audit, tax and after the fact write up services. With cloud-based accounting software, it is now easy for accounting firms to provide bookkeeping, accounts payable and invoicing services performed remotely. Many clients don’t want to deal with non-core competencies and would rather outsource. From a pricing and quality prospective we’ve seen that the outsourced CFO / bookkeeping model is very efficient.
Business Consulting / Coaching / Strategic Guidance: In addition to standard accounting and bookkeeping services it is important to want timely and relevant information and recommendations on how to use real time information to prepare budgets, marketing plans and other services to grow profits and value in their firms. They look to their accountants as valuable management team members to provide these services.
As business cycles now move quicker than ever, service companies need to be agile and adapt to the latest technologies. Our clients expect answers to questions in a timely manner. They expect in depth knowledge of their industry communicated in terminology that they understand. Clients expect their accountants to be ready when they call looking for answers to tax questions, or help to negotiate with bankers, insurance agents and/or auditors. This is how the accounting firm of the future is evolving and catering to the current generation of entrepreneurs.