Most business owners don't enjoy accounting or even working with their accountant. In fact a survey conducted by the UK200 Group and Clydesdale Bank found that only one in 10 small businesses was fully satisfied with the relationship it had with its accountant.
Anecdotal evidence points to the high fees associated with producing standard accountancy documents and little else of value being perceived by the business owner. Sadly, this seems to have been the way since the Dickensian days, with little love lost on either side of the fence.
Given the current economic climate, you would expect the relationship between accountant and business owner to be even more important than usual, with an emphasis on managing cashflow, controlling costs and identifying opportunities to grow revenues and margins.
There's a quiet revolution taking place in the world of accounting that's enabling accountant, book-keeper and business owner to work together in better harmony. As a result, businesses are making better use of their financial information to drive growth and profitability - and everyone is happier all round.
The crux of the problem is communication. Most business owners struggle to understand the accounting terms, regulations and spreadsheets that are periodically thrown at them. Accountants fling their hands up in despair when business owners present briefcases full of receipts a week before the end of the tax year.
However, if the process was made more efficient, then the accountant would be able to reduce the amount of time spent simply bringing the books up-to-date and spend more time analysing the data and providing meaningful management reports that offer value-add to the business; all of which builds and strengthens the relationship between business owner and accountant. Few people begrudge paying for advice that helps their business prosper and I know of one small business that says it's adding over £100,000 to the bottom line.
There needs to be a meeting of minds between business and accountant, but this can only happen if both parties are able to access and share varying levels of financial information at the same time.
Traditional desktop software does not meet this need. The internet, however, can be securely accessed anywhere, any time, and this is where accountancy software that's accessible online, sometimes referred to as Software as a Service (SaaS), comes into a realm of its own.
Online accounting software enables the cooperation between business owner and accountant to work in whatever way best suits the company's needs. For many small firms, the managing director will also be the book-keeper; for others it is more cost-effective to hire or train someone to input the data.
Either way, the data can be inputted directly and quickly and the accountant can see what's happening at any time and ensure that errors don't accidentally creep onto the books. Most importantly though, online accounting facilitates communication and ensures everyone is looking at the most up-to-date version of the accounts.
Using an online accounting system also supports modern day flexible working. Most business owners I know work hard all day running their business and often have to do management administration such as the accounts in the evening. At least with an online accounting system the business owner doesn't have to stay late in the office: they can go home, eat, work out or put the kids to bed, then look at their accounts from the comfort of their home PC or laptop. It's a far more flexible approach.
For SME businesses there is another very compelling argument for using an online or SaaS-based accounting system. The software is accessed cheaply and easily through a standard web browser and internet connection. There's no technical installation as it's hosted remotely. Upgrades and back ups consequently happen automatically and you always log on to the latest version. With no upfront installation costs or upgrade fees, the only cost is a simple monthly subscription. SaaS reduces the pain associated with having to manage IT, which can only be a good thing for small businesses, especially those without an in-house IT team.
Moving to online software has become commonplace and the internet is available just about everywhere. It's also secure. According to the Association of Payment Clearing Services (APACS), 17m people did their banking online in 2006. Having your accounts online means your business critical data is totally secure: if your office burned down or your PC was infected with a virus, your accounts will still be safe and accessible.
Online accounting software is not just a better technology solution; it enables a new way of working. Communication between business owner, book-keeper and accountant is vastly improved and processes are completed more easily and quickly. It reduces the drudgery of data input and frees up accountants' time to provide valuable business advice.
Who knows, we might one day look back and laugh at the time when the accounting profession suffered from its painful reputation and small business owners hated getting involved with accounting.
Mark Davies is managing director of e-conomic. For more information visit www.e-conomic.co.uk
