Since the pandemic, the accounting industry has seen an enormous shift. With the acceleration of digital adoption, clients are increasingly open to managing their accounting needs online. As a result, accounting firms are quickly diversifying their offerings and moving out of hourly billing structures to provide bundled services.
With the growing number of FinTech tools that promise to automate traditional accounting services like expense management, payroll, tax services, and bookkeeping, clients expect more from their accounting partners. According to a study by Thomson Reuters, more than 95% of accountants say that their clients are expecting advisory services from them.
Moving away from traditional accounting processes
Nearly 60% of small businesses feel they do not know enough about accounting and bookkeeping and trust their accounting firm to manage the same. CPA firms then manage various processes for their clients, including expense management.
In the past, accounting firms managed their own and clients’ card reconciliation processes manually. They ran after client employees asking for receipts for spend that happened days, if not weeks, ago, manually pored through lengthy credit card statements, and dealt with disconnected systems to manage their Accounts Payables. As a result, 25% of accountants have seen delays due to manual reconciliation in closing their financial period.
Recently, there has been a steady increase in the adoption of accounting automation software. 58% of accountants using accounting software have seen an increase in productivity and efficiency. By eliminating manual processes, CPAs can save hours in time and effort to focus on more important tasks.
The steady decline of skilled accountants
Another obstacle in the path to becoming an advisory firm is the lack of skilled accounting minds. Post the pandemic, there has been a rapid rise in the number of accountants resigning from the field. In 2021, there was a drop of 17% of manpower in the accounting and audit industry compared to 2019. Various factors have contributed to this mass exodus such as increasing number of retired accountants, banal work leading to burnout, lack of technology expertise, and the pressures that come with the job.
Due to this, accounting firms cannot afford to rely on manual processes anymore. By automating most of their traditional accounting processes like expense management, CPAs can ride out this wave. They can then utilize their existing accountants to focus on higher value services for clients like budgeting, forecasting, or cash flow analysis and management.
Clients need more than bookkeeping
Gone are the days when clients depended on their accounting partners for only traditional accounting and compliance services. Now, clients expect their accountants to help them look beyond the tax season and offer various advisory services, including forecasting, budgeting, cash flow management, and strategy.
Even though bundled services are pricier, clients are willing to pay to address their more significant accounting challenges. For CPA firms, offering advisory services can help:
Increase revenue channels: Bundling traditional accounting services with an advisory service, can open new revenue streams for their firm. Clients trust their CPAs to give them the best financial and strategic advice and would gladly pay more if needed.
Improve credibility: By giving clients strategic counsel based on factual data, increase client's confidence in their firm, leading to long-term business relationships.
Scale their practice: Instead of relying on a monthly billable model, accounting firms can quickly grow along with their clients by providing value-based pricing.
Reduce client churn: Clients now want more than bookkeeping and payroll from their accounting firms. By starting an advisory service as an add-on, retain clients and ensure their continued satisfaction.
Increase referrals: The happier clients are with the services offered, the more they'll refer the accounting firm to their network. To earn this, accountants have to switch from a regular CPA firm to a client advisory firm.
To do this effectively, accounting businesses need to embrace technology that can reduce their time and effort, freeing up their time to instead focus on advisory services.
The right expense management software can empower your practice
While transitioning into a client advisory firm, it is crucial to partner with the right software that can automate your regular bookkeeping and financial practices. For example, a massive chunk of accountants' time goes into managing business expenses. A good expense management software can help automate the entire process while ensuring data security and compliance.
Before choosing an expense management solution to partner with, here are some features to consider:
Ease of use
If clients must go through several steps to submit a single expense report, they will never use the software. So instead, client's employees should be able to create expense reports and attach receipts easily, preferably from any location or device.
Real-time card feeds
Waiting for credit card statements at the end of each month to finally reconcile all client expenses should be a thing of the past. Instead, choose software that comes with real-time visibility into how employees spend on their corporate cards. Not only does this save time, but it also provides a birds' eye view of spending patterns and suspicious behavior enabling quick remedial action.
Policy checks and compliance
Expense management software should be able to check expense reports for policy violations, duplicate expenses, fraudulent expense data, or manipulations right from the time of spend. With such real-time checks, approvals and audits become more effortless, helping accounting firms to close your books faster.
Instead of manually coding expense data from the expense management software to an accounting system, choose a solution that automates it. With a powerful, two-way integration, CPAs should be able to code and sync all expense-related data automatically.
How Fyle can help you transition into a client advisory firm
Fyle is a real-time expense management software that works on cards you already have. With real-time credit card feeds, Fyle reduces the need to depend on broken bank feeds. Credit card reconciliation can be as easy as attaching a receipt via Gmail, Outlook, Slack, MS Teams, text message, or our mobile app and automatically matching it to the correct expense.
Real-time visibility into card spend, along with rich spend analytics, arms you with the data you need to advise clients on financial strategy, cash flow management, budgeting, risk areas, operational inefficiencies, and more.
With powerful integrations with popular accounting software like NetSuite, QuickBooks Online, Sage Intacct, and Xero, you can access ML-based coding of all client expense data, including charts of accounts, employee and vendor data, tax information, projects, and other custom data.
Fyle also comes with a centralized partner portal. As a result, you can manage all your client accounts from one location without switching between multiple tools or remembering numerous login credentials.