IT Expertise Is Becoming a More Highly Prized Asset for Accountants Serving Small Business Clients

By Bob Lewis, Senior Marketing Manager, Accountant Relations, Microsoft Corp.

Today's accountants practice in the midst of constant and rapid changes in technology, regulations and client desires. Tools that help accounting professionals stay ahead of the curve while building close and profitable client relationships are vital to success. Accountants that serve small business clients have a particular responsibility to guide clients toward reliable and successful accounting solutions.

While the demand for their services is on the rise, accountants catering to small-business clientele also face increased competition from large firms and software companies that are commoditizing tax services. This trend is accompanied by greater pressure for accountants to provide a comprehensive package of services at a set cost - in other words, value-based billing instead of an hourly rate. Also, the industry is still adjusting to Sarbanes-Oxley and other new federal regulations' higher levels of scrutiny and demand for more transparent fiduciary practices.

But amid these challenges, the profession remains healthy and dynamic. The certified public accountant is still among clients' most trusted business advisers, and there is strong demand in the small-business market for CPAs to deliver more specialized and in-depth financial consulting services. Meeting this demand will require accounting professionals and their clients to collaborate more closely and effectively than ever.

Because accounting information is the lifeblood of a business, gaining fluid access to that information is critical for accountants to successfully support their clients. Thus, technology that facilitates seamless information sharing and collaboration will be indispensable to flourishing accounting firms. Also, many small businesses look to their accountant as a trusted technology adviser. The opportunity to work closely with clients when they choose accounting technology offers accountants the chance to expand their practices beyond their traditional services base - and carries with it additional challenges.

One of these challenges is an added demand on accountants' time. Prepping for their role as technology counselor may require accountants to carve out time for new skill building on top of their ongoing efforts to stay current on general tax law and their practice specialties. But responsive financial management software significantly benefits both sides of the accountant-client relationship - and can generate highly compelling returns that more than justify the investment.

Electronic Collaboration Saves Time and Generates Business

Accounting software integrated with other business systems and the Web is dramatically changing how accountants interact with their clientele. By making information more easily accessible and shareable, these technologies enable accountants to provide higher-quality services to clients in the same amount of time - or even less - than they would have spent even a few years ago. Financial documents that a client formerly had to assemble, print and send to the accountant by postal or courier service - and then often had to be re-entered into the accounting firm's IT system - can now be exchanged, analyzed and updated electronically.

Instead of traveling to each other's offices for a one-hour meeting each month or quarter to review documents and discuss issues, accounting professionals and small-business owners instead are getting together on the Web more frequently for shorter amounts of time. For example, they may set aside 15 minutes per week to share electronic files in an online workspace while they also communicate in real time by phone, instant messaging or video teleconference. Such electronic collaboration keeps an accountant on top of clients' financial health, which begets smarter and more timely business advice. Client appreciation rises and the firm grows.

Ensure security and regulatory compliance

Safeguarding businesses' sensitive financial data, always been a top concern to accounting professionals, is now even more challenging in the Internet age. The same technologies that make information sharing so fast and easy expose clients and firms to considerable risk from unauthorized access. However, accountants and clients can minimize threats such as Internet viruses, worms and hacking by choosing an accounting software package with proven, built-in security features that complement other protective measures within the small business's IT system.

Such a software package also provides much tighter document security than is possible with trading sensitive documents in e-mail - a vital electronic collaboration concern.

In addition to defense against security threats, real-time collaboration enables an accountant to help clients recognize business opportunities and more rapidly anticipate and respond to changing tax laws and emerging regulations that can mean benefits or threats.

Expanded services smooth the business cycle

The cyclical nature of accounting work, with its radical spike in billings during the February-to-April tax season and correspondingly deep lulls in other periods, poses a number of challenges. Accounting practices that struggle to keep their staff busy year-round must contend with high turnover rates as well as difficulty competing with more vibrant firms. According to recent Microsoft research, practitioners who can regularly sell periodic service offerings to their clients - such as payroll, bookkeeping and write-up - or offer accounting software or technology training and consulting that can be delivered without increasing the firm's overhead, tend to have much higher revenues and much faster growth rates for their practices.

Accounting technology can be a tremendous asset in these efforts. The high level of trust that small businesses already place in their accountant opens the door for firms to market their expertise in choosing an accounting software package, training employees to use the software and even helping clients adjust their business practices to get more value from the technology. Also, introducing software that allows small-business owners or their employees to handle low-level tasks, such as entering financial data in the system, frees the accounting professional to focus more time on delivering high-value services - like tax planning, performance analysis and strategic consulting - that are in demand and can be delivered throughout the year and merit a higher billing rate.

Provide client service across wider geographies

Market consolidation, heavier competitive pressures and other forces are leading businesses of all sizes to extend their reach far beyond the boundaries in which they operated just a few years ago. In addition to seeking customers in other cities, states and regions, many accounting firms are also looking farther from headquarters to recruit qualified and experienced staff.

Once more, these challenges can be met very successfully and cost-effectively through the flexible information-sharing capabilities of accounting software that accommodates remote access via the Internet. For instance, the technology could allow data to flow instantly, securely and reliably from a small-business client in Montana to an accountant professional working part-time out of her home in North Dakota, who can update the client's files and access other resources stored on the firm's IT network servers at its main office in Delaware. Such a scenario can produce lower personnel costs, higher profitability, greater employee satisfaction and larger market share for the accounting firm while also maintaining top-notch customer service.

Also be on the watch for

While demanding these traits in a comprehensive and effective accounting software solution, accountants and their small-business clients should have a few other criteria on their technology products checklist:

• Easy to use. Seek out software that looks and feels like the applications that clients use every day. The accounting software should be designed to accommodate the standard financial management practices of a small business - from writing checks and recording sales to executing the payroll - rather than requiring employees to understand formal double entry accounting practices. The technology also should be intelligent enough to make necessary conversions in the background while making the front-end experience simple.
• GAAP compliant. Some accounting solutions take ease of use too far, allowing small-business users so much freedom in data entry and adjustment that they lack necessary accounting controls and fail to maintain a clear, secure audit trail for the accountant to follow. Though there can be revenue in the cleanup, it is better to find a software provider that has a solid legacy of building products that align with Generally Accepted Accounting Principles.
• Backed by comprehensive training and support. Pay attention to whether the software provider is fully committed to supporting accountants' special relationship with their clients beyond the initial product sale. Accounting professionals should expect access to ongoing training on the software, extensive technical support, assistance with client referrals and other resources that enable them to more effectively serve their own clients.

Change is nothing new to the accounting profession, and practitioners know they must continually update their knowledge to serve their clients. As information technology in general grows ever more prevalent and fundamental to business success, so too does accounting software - especially as it becomes easier to learn and use. Accountants who actively seek ways to apply software throughout their practices will stand a better chance of increasing their client rosters as well as deepening clients' allegiance.

Bob Lewis is Senior Marketing Manager, Accountant Relations, for Microsoft's U.S. Small Business group.