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Articles | advisory

Financing First Accountancy: how the F word can help you and your Clients scale quicker

Accountancy’s long-term relationship with technology is not a straightforward one. 

While the historical image of the profession is associated with green visored experts bent over adding machines, this is a legacy of outdated Guild approaches. It encourages an antiquated view of the accountant which has in practical terms long since gone the way of the dodo. Like most other professional services, modern accountancy is as much about cloud and accounting technology as it is about crunching numbers. 

Some of this comes from the profession’s perceived rigidity. For example, there is a perception in accountancy of the core of the profession being about one-to-one advice, and this is significantly limiting many accountant’s ability to scale. While it might suit micro businesses or one-person endeavours, if a firm is seeking to grow and expand, it has to solve the conundrum of one-to-many service. There are some frontrunners in this field, and while it is very useful to examine how they have cracked this particular nut, doing so challenges some fundamental beliefs of how the accountant does business. 

Take, for instance, the case of one significant accountancy organisation based in Finland. The CEO of 17 years standing is not an accountant. Has never worked as an accountant. He does not pretend to be a specialist in the core service offering or subject matter of his business. What he understands is how to approach his company structure from a process perspective. Eschewing the growth through acquisition approach of many accounting concerns to expand, he recognises that the concept of one-to-one service from accountant to client, over and over, is a bottleneck within the business. 

So he changed the model – focusing instead on sales and marketing, placing an onus on outbound calls to build the business prospect pool. He franchises access to the business’ tech stack and its infrastructure model, and his sales force act as the first port of call for customer service triage, rather than the subject matter experts. This way, the business avoids handing enquiries straight to the highly skilled accountants – their role is saved for complex advisory. It means the practice can focus on its depth of integration with the business through “stickier” services, like financing. 

This meets customer needs by acknowledging that a large proportion of the time, their primary goal is how they can get paid quickly and efficiently. Instead of starting with the accountant as the base unit of the accounting firm, this approach recognises the significant knowledge and specialism inherent in the role and places that value much higher up the chain. It also recognises that most common services within accounting roles are not that specialist and the most likely to be impacted by technical advancements, just like bookkeeping with Xero, Quickbooks and the like. 

This subversion of longstanding accounting business thinking and models is widespread within the Scandinavian region.  In Finland, for instance, the profession has become rooted in a foundation of technology as the basis of its function, with skillful professional advice overlaid on top. Some of this is down to the evolution of the industry; it had been facing a talent shortage encouraging junior applicants into the sector. The industry body’s response was to run a targeted focus on university age students taking business management and consultancy qualifications. These new applicants have brought a wider business sensibility into the profession, which naturally plays into a more broad, ‘trusted advisor’ role for their clients. It also suits changing needs of clients. The new breed of younger business owners and entrepreneurs are more receptive to new ways of running their business, as well as being ‘digital natives’. This means that alternative finance options, rather than relying solely on the advice of their small business bank manager as the source of business cashflow solutions, are increasingly on the table.  

In a world where bookkeeping is increasingly run through smart platforms like Xero, the opacity of traditional accountancy thinking is not helping to propel the profession forward. Without ‘front foot’ advisors offering the benefit of deep financial and cash flow insight, modern clients will take up the responsibility to make those decisions themselves – a state of affairs which often frustrates accountant advisers, as this can result in very poor contract terms which dog the business for months or years. The number of accountants with the luxury of truly providing one-to one-advice to clients these days is vanishingly small. And in a world where one-to-many is the accepted norm, it is the role of the accountant to show and keep showing that knowledge and market insight to clients. This specialism is the stronghold of the profession now and into the future. 

Looking at the profession from a management and process perspective, it seems almost deceptively simple that the highly skilled experts within the business should reside further along the value chain. And as many in the profession grapple with the concept of technology eroding their natural and long-held territory out from underneath them, focusing on the specialist elements which make the profession a highly skilled and valuable one also provides the solution to future-proofing the business. Technology is one conduit to deepening the relationship with customers and offering highly skilled services. 

This is just one reason why our product, AREX invoice financing, is only available through accountants. We believe that the profession’s biggest facilitator for growth and development comes from a shift towards a one-to-many approach as well as keeping that highly privileged position with clients – a fact that the profession has a tendency to overlook.    

Recent digital developments like Making Tax Digital may have forced more accountants to focus greater attention towards compliance in their daily roles, but this may be at the expense of wider trends impacting the sector. By looking from the customer’s perspective and working backwards from their ideal objectives by facilitating access to ‘cash flow-enabling’ technology which most client businesses do not (and need not) understand, it has the impact of reinforcing the business of both accountant and client. Win/win.  

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