As the economy continues to struggle organisations are turning their attention once again towards cost reduction and efficiency improvements. And while many may believe that costs have been squeezed as far as possible over the past few years, there are still opportunities to transform operations. Technology has developed significantly since the recession first hit in 2007.
Software as a Service (SaaS) has become an increasingly accepted way of sourcing technology, offering organisations such as accountancy firms new ways to interact with clients. Small businesses now have access to a range of real time services, from cash flow forecasts to tax planning, that bear no resemblance to the traditional annual accounts provision and discussion of old.
Yet few accountants, or their clients, have yet to address the issue of automated invoice processing. As Kevin McLoughlin UK Country Manager, Twinfield, explains, by combining SaaS based accounting technology with electronic document management that provides both invoice automation and e-invoicing, accounting practices and small to medium businesses can process invoices automatically, reducing costs and providing faster insight into operational performance.
Many accountants are struggling to create a business model that reflects the demands of a changing market whilst still retaining profitability. Having been undercut by the providers of basic book-keeping services, many companies opted out of providing this service – the shoe boxes – only to discover that these companies had also been a good source of additional service based revenue.
As a result, many accountancy firms, including some of the largest firms, are looking at ways back into this market. But the traditional, annual accounts preparation is an expensive process that offers little if any margin – especially given the general drop in fees the market is now willing to bear. So what are the options? Some companies have opted to outsource these services to other countries, leveraging lower personnel costs to achieve a cheaper model.
But this has limitations – from client concerns regarding the security of sensitive financial data to the difficulty in then addressing client questions regarding specific aspects of the audit. And this is key: if, as these organisations have discovered, the provision of book-keeping work is a critical way of winning additional service-led business, farming it out to a third party defeats the object.
With the right model, organisations should be able to leverage the book-keeping to deliver the raft of services that clients are increasingly demanding to deliver real, quantifiable value and tangible, day to day business support – from daily or weekly cash flow forecasts, to proactive advice on profitability or tax planning.
Key to this process has to be rapid access to client information. Document scanning technology, together with self learning software, can transform the cost base for accountancy firms and their clients and provide a platform for the delivery of these new services. There are two options – firms can either opt to outsource invoice scanning to a third party (this could be the accounting practice); or clients can be empowered to scan their own invoices. Critical to this model is the integration of the document scanning technology with a Software as a Service (SaaS) based finance solution that automatically posts the invoice and streamlines the entire process.
Scanning purchase invoices in this way – either in bulk or by each client – drives down the cost by automating and streamlining processes, enabling accountants to compete with low cost book-keeping services. More critically, by encouraging clients to scan purchase invoices on at least a daily basis, accountancy firms have access to the timely business information required to deliver added value services.
The ability to provide any business with near real time insight into performance is incredibly powerful. Simply accessing the accountant’s portal to discover how different parts of the business are performing, to track cash flow or assess the impact of currency fluctuations provides unprecedented confidence in decision making. In addition, the accountant can publish the client’s accounts on the portal, providing anytime, anywhere access not only to the accounts – useful when talking to investors – but also the ability to drill through the information to attain a full financial history.
Rather than simply cut fees in response to both the financial climate and the squeeze from growing numbers of cut priced book-keepers, or exploit off shore resources to drive down costs, there is a massive opportunity for accountancy practices to leverage their expertise to deliver real financial insight to customers.
By automating invoice processing through document scanning, standardising processes and using self learning software, accountants can change the pricing model and, critically, create a near real time resource of client financial information that can transform the customer relationship, providing a depth of financial expertise that will be essential to help SMEs maintain or even grow the business during this sustained economic downturn, whilst delivering quantifiable additional service revenue to the bottom line.
By Kevin McLoughlin, UK Country Manager at Twinfield