Innovation in technology opens up new and better ways for accountancy and professional services firms to help businesses. But how can those clients make the most of the benefits on offer?
“When accountancy firms make technology work for them, they help clients more strategically, more quickly and at a lower cost,” says Olivier Boutellis-Taft, CEO of the
Federation of European Accountants.
As his organisation prepares to issue a paper on how cloud computing can help professional accountants better serve their SME clients, they are certainly not alone in recognising that technology has the power not just to streamline existing tasks, but to gather and analyse data in a way that transforms business decision-making.
Lee Bryant, co-founder of Postshift and Shiftbase, works with leading professional services firms and bodies on technology adoption. He sees a future in which firms will operate their own platforms with many self-service tasks, but in which accountants will have an enhanced role as advisors and consultants. “These platforms will cover collaboration, communication, project and relationship management, but later expand to include real-time data analysis and hosting of accounts information, and will perhaps also make available artificial intelligence or smart tech that can help find hidden patterns in client data,” says Lee.
Technology, of course, already enables member firms in the UHY network to stay closer together, sharing expertise and breaking down borders, especially for those businesses with multinational interests.
WELCOME TO THE CLOUD
Innovation always aims to enhance and expand the range of services, provide real-time reporting and make communication seamless. To that end, there has been a rapid increase in cloud accounting and it is something that features highly in UHY’s five-year 2020 Vision strategy.
Delivered over the Internet and securely accessible from any web browser, wherever the user happens to be, cloud-based services can substantially cut overheads and IT costs compared to investment in servers and software that needs constant updating. Many firms now use a blend of ‘traditional’ IT and cloud. In a study by the IBM Center for Applied Insights1, using the cloud in the IT mix was found to help firms reduce expenses by shifting from fixed costs to the ’pay-as-you-go’ cloud delivery model. As well as being scalable and flexible enough to support dynamic needs, adopting a hybrid approach means organisations can selectively combine the use of the cloud with parts of their traditional IT infrastructure, thereby best meeting their needs in terms of functionality, speed, resilience, security and regulatory requirements.
Michael McCoughtrey, managing partner, UHY Haines Norton in Sydney, Australia, has seen the benefits that cloud computing can offer. “For accounting and professional services, access to accounts and documents is made simpler. Businesses can provide and see information more quickly and we can respond at lightning speed,” says Michael. “Problems are more visible and can be solved without the delay that might make things harder to tackle. Internal fraud, for example, can be spotted promptly. Businesses also benefit from spending less time on low-value tasks and more time on value-creating opportunities.”
Having launched its cloud-based service at the end of August 2016, the UHY Hacker Young group in the UK point to the benefits smaller clients gain from being able to provide the firm with a real-time view of their accounts.
“One example where we have improved productivity for clients is in enabling the use of mobile and tablet devices,” says managing partner Laurence Sacker. “Clients can simply photograph an invoice, upload it into the cloud to software like Receipt Bank or Basecone, and then have this automatically posted directly into their ledgers using OCR technology.”
Syful Islam, managing partner, UHY Syful Shamsul Alam & Co in Dhaka, Bangladesh, is also a fan of data analytics tools and the power they give to dig deeper into clients’ data, both financial and non-financial, to find the elements that have an impact on profitable growth. “During audits, we can test complete sets of data, rather than just testing samples,” he says. “These tools aid in risk assessment by identifying anomalies and trends, and point auditors toward items they need to investigate further. A firm’s data can also be compared to industry data.”
TIME AND COST SAVINGS
Many small and medium-sized businesses simply do not have the time to manage and assemble the information needed to report and measure the performance of their business. The improved workflow enabled by cloud computing and shared applications not only leads to timely information, but also faster and more informed decision-making.
In Norway, where UHY member firm RevisorGruppen has offered electronic filing and cloud-based services since 2014, the cost benefits to clients have been tangible. “We have been able to show businesses the comparison between ‘traditional’ accounting handled externally and a cloud-based system, where many basic tasks are handled in-house but value-creation services are provided by the accountancy firm,” says Kirsti Armann, CEO, RevisorGruppen. “It has been important, though, for us to work closely with clients as the systems are set up and they start their first transactions to ensure people are comfortable and competent with the processes.”
Although cloud accounting should never be a way of devolving responsibility, it creates a new way for professional services firms and clients to work together. As the emphasis on client self-service increases, the role of accountancy and professional services firms is evolving. The accountant becomes a trusted advisor, acting as consultant at the planning and adoption stage, then adding value through analysis and strategic guidance. “We have helped customers achieve updated and more effective accounting systems,” says Kirsti Armann. “It has certainly been easier for businesses to make changes when led by someone they trust, rather than having to search and set up solutions on their own.”
In Argentina, Roberto Macho, managing partner of UHY Macho & Asociados and UHY Board Director, is firm in his belief that clients need to adapt and adopt. “Anyone who pulls away from technology will ultimately be expelled from the market for lack of competitiveness,” he says. “We know that some clients face IT barriers, which is why it is now so important for us to help them with the technological options – whether it is advising and implementing a full-blown enterprise system or enabling standalone services.” His firm has worked closely with multinational clients to integrate processes and reporting seamlessly across borders. “For three firms, we have provided the technology that allows them to have their admin office in one country and operate in six or seven others. It has reduced back office costs by 60% on average,” says Roberto.
Syful Islam recognises that many clients need support that goes beyond traditional accounting and into the realm of business automation. “Considering the challenges of today’s business environment, high efficiency and productivity are critical,” he says. “Clients often need help with strategies to automate processes that keep costs under control. It is a question of integrating applications, restructuring labour resources and using applications such as human resource information systems, computerised accounting and payroll software, supply chain management and fixed asset management tracking.”
READY FOR THE CLOUD?
Because failing to plan is planning to fail, documenting existing on-premises software and internal work processes is key. Areas where businesses lose the most productivity or have the greatest problems with technology should then become the first areas to move to more efficient cloud applications.
Clients who are still heavily dependent on paper-based systems and their own server-based accounting packages can be daunted by the prospect of converting to cloud software. However, this should not preclude the use of new data analytics tools.
Businesses often have separate centres or silos of data around the organisation, which are typically managed with spreadsheets. The risk of embedded errors can be high and productivity held back. “In these instances,” says Laurence Sacker, “we recommend clients move to new data analytics packages that can later accommodate automated data feeds from cloud applications. They get the immediate benefit of aggregating the dispersed web of spreadsheets into an integrated whole.”
Clients can also position themselves to take advantage of new technology through having a local champion, dedicated to sharing the benefits and providing a link between the business and external advisors such as accountants.
Despite undoubted productivity gains through workflow improvement and cloud accounting, data use remains an issue, with many firms still spending a lot of time extracting or downloading data from various sources and re-inputting it elsewhere to upload in another application. The solution could come in the form of application programming interfaces (APIs), which allow different software and databases to communicate with each other effectively. In the European Union, a new directive on payment systems requires banks to develop open APIs and let third-party developers link into their systems by 2017. The result could be that bank statements will automatically upload each day for instant reconciliation.
While Syful Islam already sees his clients benefiting from faster communication, enhanced reporting and reduced cost, he believes the next generation of technology can offer firms even more. “International auditing standards require meticulous attention. In Bangladesh, we are looking at audit applications that will allow us to extract data, identify exceptions and unusual transactions, and generate reports. For clients, that will mean the reassurance of continuous monitoring, fraud detection and tracking of key performance indicators.”
Lee Bryant agrees that moving away from spreadsheets and non-integrated models is essential if businesses are to take advantage of the more advanced data analytics capabilities of accountancy and professional services firms: “Until clients have some kind of consistent data storage for financial information, it is very hard to use the big data capabilities that the larger firms are building out.”
As technology changes, the role of accountancy and professional services is changing too. Ultimately it is the clients who will benefit, as the firm they trusted to look after their books becomes a business management advisor, helping them build a picture of their business needs and steering towards the technological advances that will lead to greater efficiency and profitability.
For more on the impact of technology and its relationship with professional service providers, check out our interview with IBM Watson’s Dr Long H. Vu, who talks about the future of artificial intelligence in the profession (this issue, page 8), and our feature on cybersecurity (this issue, page 10).
For more information about UHY’s capabilities, email the UHY executive office, firstname.lastname@example.org, or visit www.uhy.com.
1 IBM report: Growing Up Hybrid. Accelerating Digital Transformation. www.ibm.com/ibmcai.