Small business owners are using new, efficient and inexpensive technologies to cater to the clients of today – and tomorrow. Are you keeping up with the competition?
In recent years, instead of viewing the continuing automation of accounting as a death knell, the industry has begun finding ways of embracing disruption in transforming the profession for the better.
At the very least, the automation of compliance-based tasks, such as bookkeeping and receipt management, means accountants can now use that time for advisory work and improve their client offering.
This inescapable shift is having an impact on all aspects of client engagement, including the all-important way that fees are charged – creating new expectations for the clients of 2016 and beyond.
MYOB general manager for design and user experience, Ben Ross, says many accountants are seeing their billable hours going down, meaning they need to make the move from charging by the hour to a fixed fee model.
“What we’re seeing is that compliance revenue has reduced by around 20 per cent over the last six years across the industry, while advisory revenue has increased by 71 per cent,” he adds.
This is a sentiment shared by Ron Drost, general manager of Digital Disruption Solutions, a Melbourne-based technology firm dedicated to helping accounting firms navigate digital disruption.
“I think for the first time ever, a lot of the compliance side [of accounting] is getting more automated,” he says.
“It doesn’t mean compliance is dead, because people have been predicting that for the last 20 years.
“What it means is accountants need to embrace the technology, and they need to start thinking a lot more about protecting their client base in a positive way using technology.”
For some years now, businesses focused on automating and streamlining compliance-based services have been populating the Australian market. For one, Receipt Bank has been around since 2010, and aims to simplify compliance for accountants by automating the bookkeeping process.
Receipt Bank country manager for Australia and New Zealand, Sophie Hossack, says accounting practices are now able to offer bookkeeping at scale for the first time, and for a fraction of the cost that they previously charged.
“The average bookkeeper can service 10 clients. Our most successful partner is now looking after 50 clients for every one bookkeeper,” Ms Hossack says.
“If accountants want to offer real-time reporting, they absolutely need the bookkeeping and the accurate data.
“Our aim is to make sure that bookkeeping is as profitable a service as possible for accounting practices, and as efficient as possible.”
Another technology firm, DocuSign, has been a provider of a range of digital transaction management services for accountants since its establishment 2003.
However, it is probably best known for providing electronic signature (e-signature) technology to facilitate electronic exchanges of contracts and signed documents.
According to its director of commercial sales, Matthew Old, Docusign has over 225,000 customers, with over 85 million individuals using the product every day.
“What we’re seeing through our customer base is that there’s an average saving of about $48 per document,” Mr Old says.
“That cost saving really comes from the savings on the paper, the post, the storage and then the management of that document.”
Mr Old says that, in Australia, DocuSign is currently seeking growth by heavily investing into the small-to-medium enterprise (SME) market.
“As you know, Australia is made up largely of a lot of small businesses,” he says.
“It’s such a crucial market. We support small businesses by giving them cutting-edge technology and digital transformation technology that allows them to go and disrupt their market, and we’re seeing that time and time again.”
Making the most of artificial intelligence
MYOB’s Ben Ross echoes the sentiments of many – believing artificial intelligence (AI) is going to eliminate a lot of present-day manual work and free up accountants to do more value-added advisory work.
For the non-believers, Mr Ross cites a statistic from the Committee for Economic Development of Australia that, over the next decade, there is a 94 per cent likelihood that the work of bookkeepers will become automated.
“That whole function of actually coding and categorising transactions will go away,” he says.
“That’s really the first phase of the application of artificial intelligence to basic accounting tasks.
“We’re thinking about how we can use those concepts to make life easier for accountants.”
Dale Beaumont is an entrepreneur who is moving into the business advisory app space with BRiN, an app he says is the world’s first artificially intelligent business adviser aimed at helping SMEs and, in turn, their accountants.
He says BRiN aims to provide free business education for SMEs through a library of business videos with expert advice from leading business advisers.
“Businesses have become so complex,” Mr Beaumont says. “For example, how to set up a YouTube channel or how to set up a CRM system is something that most business owners need to do.
“It is impossible for any single person, including accountants, to know everything about every subject, so this [app] becomes your best friend.”
He also notes that apps such as BRiN can help accountants further their engagement with SME clients by gaining a deeper understanding of their needs beyond numbers and finances.
“Generally, most accountants are trained to give people advice around their numbers and their finances, but they can’t generally give questions or support in terms of marketing or sales or how to expand into certain countries, or how to hire interns,” Mr Beaumont says.
“This is a tool that accountants can use in conjunction with their practice where, if a client asks a question that they may not know the answer to, they can either pull their phone out and help a client with an answer instantly, or they can refer their clients to download the app to support them.”
Some even say accounting apps are so essential that many SMEs would have a difficult time running their business without them in the years to come.
“It is essential for our business,” says David Nunez, who, with his wife Kate Vandermeer, runs an independent pop-up retail business called TheSuperCool.
Their business model is built around the notion of embracing ‘the nomadic lifestyle’, meaning it depends on cloud-based accounting systems to run efficiently.
“Kate can view the status of accounts, pay people, see the sales figures for the weekend trade, from one location to another location,” Mr Nunez says.
“The trail of data is more accurate. It’s more concise and it’s captured in a timely manner.
“When I work, it makes the HR side of things easier, such as your super payments, your payroll and other management tasks,” he says.
“We’re also trialling Receipt Bank as an add-on, where you take the photo of the receipt and it automatically uploads.”
Mr Nunez says he and Ms Vandermeer chose their accountant and bookkeeper based on their understanding of current accounting technology and apps, choosing professionals who understand the needs of a retailer such as TheSuperCool.
“They understand the integration side of things and the benefits from an accounting perspective,” he says.
“I think these are technologies that are growing, and I think people have to adapt.
“Because really, [accountants] are all catering for those SMEs that are out there, as it’s a growing industry in Australia, so they’ve got to understand and be knowledgeable with these sorts of apps.”
Moving to augmented reality
As for future offerings, Smithink director David Smith believes augmented reality (AR) technology will soon be applied beyond the gaming world and into the accounting world.
“Somewhere in the next few years … we’ll see computer applications where we’ll be sitting in this virtual world,” he says.
“Imagine an accountant actually walking into a general ledger and they’re physically walking into the ledger, and all the numbers are laid out in front of them and they say, ‘I don’t like where that number is’, and physically pick up the number and they walk over to where it should be.
“Or they are looking at business numbers and can actually see the numbers floating in front of them and they can move them around to make it work for themselves.”
Mr Smith notes the successful application of AR in the gaming world, in particular the recent success of Pokémon Go.
“In computer games, as we’re seeing with Pokémon Go, they are highly addictive,” he says.
“The reason they are highly addictive is that they’re fun, challenging, and they give you a reward if you do things well, and so therefore people want to continue to do things well and get the next reward, and they have fun doing it.”
Mr Smith concludes by saying one of the great challenges for accountants and practices is that they are time-poor, and embracing technological changes is the path towards addressing that challenge.
“One of the things they have to ensure that they are doing is keeping themselves up to date with all of these latest changes,” he says.
“There are literally hundreds of suppliers of software for accountants in practice today, so it is incumbent upon them to do that.”
Getting your own personalised app
One developer has taken it upon himself to create a business dedicated solely to helping accounting practices build marketing functionality by creating their own personalised apps for their clients.
iPracticeApps is the brainchild of Digital Disruption Solutions in Melbourne, formed in September last year to help accountants ensure they don’t fall behind on the technology front.
Digital Disruption Solutions general manager Ron Drost says he takes a bespoke approach to creating apps that suit the values and culture of each accounting firm.
“Our job is to build the functionality into those apps, do all the design, give them options around what they can do with the apps and build an app that suits each firm’s culture and client base,” he says.
“We’ve spent a lot of time making sure our apps are highly integrated to the compliance systems that the accountants use.”
While an app can function as a great marketing tool, Mr Drost says it also has to have some real-life functionality built into it.
“It’s got to be interactive and there have got to be reasons for clients of accounting firms to use the app,” he says.
“Otherwise they download it and it ends up sitting on their smart device and they go into it once and it never gets used.”
Mr Drost says that the smart analytic features behind iPracticeApps’ design are what make it unique.
“As a firm, I can go and look at the analytics and see where my clients are spending their time in the app – not only where but for how long,” he says.
“I can look and go, ‘Gee, they’re really taking to the portal’, because I can see on the analytics … that they’re spending a lot of time in the forms area or the checklists area.
“This is the beauty of this technology – real-time feedback with aggregated figures on where and how clients are using the app.”