The future client of accounting is tech savvy and ambitious: is your firm ready to help them thrive?

The future client of accounting is tech savvy and ambitious: is your firm ready to help them thrive?

Digital technology is reinventing accounting and finance. The image of the accountant sifting through shoeboxes of receipts and entering endless client data into spreadsheets may well be in the past. The client is also evolving with the times. Simon Leek, founder and CEO of FibreCRM, advises firms on how to get up to speed with innovation and to start thriving online.

A generation of ambitious, small- and medium-sized business owners has emerged (SMEs), enjoying on-demand services wherever they are in the world. These future clients run their lives and businesses online, through smart phones and mobile apps. From their accountants, they’re no longer looking for just routine end-of-year accounting and tax advice; they want advisory services to help their businesses thrive. Progressive accounting firms understand this and are harnessing opportunities opened up by cloud technology and the ability to see client data in real time.


New advisory services are driving value in the accounting industry. But a great many firms are still not in a position to meet these new market demands. For example, the future client will value expert advice on the best technology for cash flow forecasting. Can you offer banking solutions to help clients secure credit and funding, project-based financial consultation or start-up mentoring? Crafting new services requires an agile workforce freed up from mundane, manual and often silo-based accounting tasks. In today’s market data must surface quickly and information must be immediately accessible to the right people. When it is separated across a firm in unlinked, incompatible formats and buried in many small databases and spreadsheets, the power to help the workforce develop services is vastly diluted.

How big is the problem of inefficiency in accounting? A survey of 3,000 accountants for Practice of Now 2019 gives us an idea of the scale of change required:

  • 49 per cent examined their business practice in preparation for Making Tax Digital (MTD)
  • 35 per cent consider their firms to be early adopters of cloud technology
  • 58 per cent are moving more slowly and are not proactive about solving inefficiencies

This suggests that well over half of accounting firms are in no hurry to catch up with their competitors. These firms may well have full order books with many very happy clients taking up all available resources but as the world and their competitors change around them, they could very quickly lose more and more of their market share. Indeed, they may be missing out on an entirely new, more profitable market of additional clients who are looking for a more tech-enabled approach.

Early adopters are setting the pace of change and gaining an advantage. An industry performance report by Xero shows traditional firms charge a higher rate than online firms for less value, and have fewer online clients. Because of this they are also losing clients at a much higher rate. In 2018 the departure rate for firms with more than 100 online clients was less than two per cent a year. For firms with less than five online clients the rate of attrition for the same period was almost nine per cent.

From inside the company it is difficult to see the red flag symptoms of market erosion until it is too late. Accountants are busily working on routine accounts and tax returns for a full roster of clients. So why disrupt the workflow when it is business as usual? In reality the firm is likely to be weighed down with low-yield clients burning up time and resources that could be spent much more profitably. A key indication of inefficiency is the use of a variety of software platforms and applications which are not interconnected. Poor system integration means that data will not be surfacing quickly enough and data silos will be determining the ability (rather, inability) of the firm to make proper use of much of their data collected over many years.

From the outside this firm will look chaotic, overly busy and with illogical data trails full of duplications. Slower moving firms have lots of client information coming in but will struggle without properly integrated technology to make any profitable business use of it. Here are a few symptoms of struggle to look for in your company:

  • Low customer satisfaction
  • Unhappy employees
  • Unhappy partners
  • Low recovery rates
  • Bottlenecks at any stage of the workflow

My advice to practitioners is climb off the fence about the risks and benefits of switching to cloud-based accounting. Start identifying what inefficiency looks like in your practice and find out the possible return on investment. Once you have migrated your client base to the cloud, the crucial next step is to identify new opportunities to offer clients more profitable services. Use the client data to learn what other problems you can start solving for them. Pay particular attention to how clients are experiencing stress around issues of cash flow, because this is where progressive firms are delivering the most value online.

How to address the problems

A successful accounting business with a long-term future will need technology which increases the efficiency of engaging with clients online. In 2019 the modern practice operates very differently to the traditional firm of the desktop computing age. With the current digital model all accounting services are delivered online. Increasingly, firms are migrating to efficient cloud-based accounting software, enabling them to offer clients a more profitable and wide-ranging service. The accounting practice of the future is not focused on completing discrete tasks; this ‘manual’ work will be carried out by software. Accountants will apply different skill sets for advising clients and building more profitable relationships with them.

Client relationship management (CRM) is a class of software which helps a firm to understand clients much more deeply and improve the client experience through personalised services. CRM really is the ‘heart of the practice’ because it brings all information together in a single, accessible place that can be shared with colleagues and partners. To achieve a full return on investment the software must be embedded in a wider CRM strategy that pulls together all processes and makes the system more generally effective.

To get the best return on investment the CRM system must be integrated with other business applications, some of which are online and others offline, automatically updating the database of clients with valuable information.

CRM offers benefits in the immediate and long-term. The apparently intransigent problem of data silos is solved by no longer allowing the hoarding of data local to one department or worker. The accounting firm finally gets an overview of all its clients. New insights emerge which enable the categorising and grading of clients. In general, a deeper understanding of the client emerges, along with opportunities to offer more attractive and profitable services.

A well-embedded CRM can also let the firm start to reduce other silos and to encourage cross-departmental working towards the bigger goals of the firm as a whole, reducing the inefficiencies inherent in localised thinking.

The accounting profession is starting to assume a broader role than it has now, taking on real-time cash flow forecasting and money management advisory services, for example. Rather than just a compliance officer for clients, the accountant is increasingly gaining the status of Virtual Chief Financial Officer. It is this ability to differentiate the services which can be delivered from those of traditional firms that will ultimately set the course for high business growth in the era of online accounting. CRM is supporting this development by turning client data into valuable business intelligence and enabling firms to advise clients about business moves, well before they happen, rather than merely summarising the results of one or other ventures whose risks could have been mitigated with appropriate upfront accounting advice.

Meeting the needs of the online client

According to The Practice of Now 2019, to successfully meet the demands of online clients firms must adopt the following attributes:

  • No manual data entry
  • Real-time relationships
  • Proactive alerts and notifications
  • Pre-emptive problem solving
  • Higher fees for better value

New professional skills are required of accountants. In today’s market it is necessary to be proficient in digital marketing to connect and engage with the new generation of clients. It also pays to be proficient in business strategy to successfully navigate digital disruption in the industry and make informed decisions. If the traditional accountancy firm relied on instinct and referrals, the progressive firm employs the strategic use of data and a robust online presence. Firms that will thrive into the future will be technologically astute and pro-innovation. Their practitioners and partners will have an appetite for improvement, growth and change. The firms will also understand the increased profitability of new services compared to the meat-and-potatoes tasks of the past.

Digital transformation is an educational journey and not one without upheaval, but can be easily accomplished with the right attitude. Preparing for CRM and moving onto the cloud requires organisation and careful planning. For the 58 per cent lagging behind, the likely cause of resistance is not the cost of software but that practitioners need to know the return on investment beforehand – and that requires a close examination of existing processes. The key to moving forward is to make the time to define your business goals, to know the cost of holding back and to understand the advantages of becoming an early adopter.

Here is a checklist to help you prepare:

  • Define your business goals
  • Research the technology
  • Speak to other early adopting firms
  • Find out the best possible ROI
  • Be clear upfront about the value proposition to partners
  • Choose a CRM supplier who can reliably help you through the process
  • Ensure your data fields are well populated prior to integration
  • Plan to ensure all application systems can be properly integrated
  • Allocate someone as the focal point of CRM to pull the project together
  • Outline your strategy and produce a roadmap

At this stage you will want to know how to prepare existing clients to move online with you, and together move up the value curve as you start providing advisory services. Many accountancy firms have successfully moved their client base onto the cloud with email marketing campaigns designed to educate and inform them about the changes taking place, with updated terms and conditions. A newsletter campaign, for instance, might explain to clients that change is necessary to upgrade the services and experience.

By April 2019 all UK accounting firms had prepared clients for Making Tax Digital for VAT. This legislation is part of the ongoing digital disruption in the industry. It has brought in a new era of accounting and forced practitioners to think about the future and to embrace the ‘cloud’.

The real challenge is in preparing for the new generation of client: the small- and medium-sized progressive business owner who no longer wants or needs the traditional service. Firms that succeed in this upcoming market will be equipped to service many SME business owners at highly efficient and cost-effective rates. It is important that you start making plans now about the types of services you want to deliver and putting a business strategy in place.

For more details about how an accountancy-specific CRM tool can equip your firm to thrive in the upcoming marketplace, please download our industry whitepaper, The Integrated Practice.

Simon Leek

Simon Leek