SME Accountants: Take A Page From Your Own Book

In today’s market, what do businesses really want from their accounting services? According to new research from B2B Software-as-a-Service firm Exact, companies want their accounting tools and service providers to act as a driver for businesses to stay competitive and relevant.

In a survey of several hundred small accounting businesses, Exact, in partnership with Pb7 Research, found that companies today want CPA firms to provide services that go beyond the standard accounting offerings: taxes, auditing, and outsourced services. According to Exact, businesses want their accountants to go beyond the role of financial advisor, and step into the role of “true [business] advisor and partner.”

One key to providing competitive accounting services is to have knowledge of cutting-edge technology, including cloud-based accounting software. But a look at the data finds that while small accounting companies are prioritizing tactics to stand out from the crowd (nearly half of SME accounting firms – 45 percent – said they are turning their focus on service quality to stand out from the crowd for their corporate clients), small accounting companies are actually struggling to adopt these tools themselves, and it could be hurting their own balance sheets.

Accountants Have Their Own Cash Flow Problems

Exact researchers made a poignant remark in their research report: “With a touch of irony,” they wrote, “the research shows that accounting firms’ top business challenge is cost control.”

There are several findings from the survey that could come as a surprise and be contradictory for the accounting industry. For example, Exact noted that accountants are hired to work with numbers. However, only 27 percent of small business accounting companies reported that they offer suggestions and new services to their clients based on hard data. Instead, far more (48 percent) make these suggestions based on conversations with their business customers.

Further, while SMEs across industries are being encouraged to adopt cloud-based technologies to gain a tighter grip on their cash flow and spend analysis, SME accountants themselves are often not using these tools.

“The research shows that cloud software can help make business processes more efficient for these organizations,” the report concluded, “decreasing time spent on internal administration – freeing up accountants to do profitable work and concentrate on growing their business by innovating and expanding their service offerings.”

However, Exact found that just one-third of those surveyed said they have adopted cloud-based services for administrative procedures. The rest, researchers said, use in-house tools, with 23 percent using a combination of software and traditional spreadsheets. Those figures are lower than the average for SMEs across the accounting, manufacturing and wholesale distribution industries as a whole. Collectively, more than half of these SMEs reported using at least some cloud software.

Automation is another area touted as a cost-efficient way for small businesses to better manage their money. Accountants should be at the forefront of money management, however, the survey found that just 7 percent of small business accountants use a single, integrated, end-to-end system for both back and front office procedures.

Overcoming Challenges

Exact’s research may suggest a troubling trend among small accounting businesses: Many of them are not using tools to help their own firms gain a clearer vision of customer and spend management, even though SME accountants should be at the forefront of these services.

According to Exact U.S. Cloud Solutions Product Marketing Principal Dave Lechleitner, however, being a player in today’s increasingly strenuous accounting industry is not easy.

“Today’s accounting landscape is very competitive and a key driver of customer retention is the quality of the firm’s service” he said in a statement. “It’s no longer about the traditional periodic accounting services, it’s about creating long-term value.”

In addition to meeting diverse demands from corporate clients, small CPA firms said they are consistently concerned with keeping up on changing regulation and legislation that impacts the accounting sector directly – and those worries are compounded on top of the spend management and customer retention challenges faced by all SMEs surveyed.

Still, Exact’s research suggests that accounting companies will have to step up their own game should they wish to prove to other businesses that they are the top of their class. [bctt tweet=”Accounting companies will have to step up their own game should they wish to prove to other businesses that they are the top of their class”]

Making the leap to cloud-based software solutions and Big Data analytics may not only help small accounting firms better manage their own balance sheets, but also demonstrate to potential business customers that they can provide the best financial services – because they deploy those services themselves.