The rise of the Online Accountancy Practice – Should clients be cautious?

Accountancy is thousands of years old and dates back to ancient times with items traded at markets prior to the establishment of monetary systems and legal tender. Over those thousands of years, technological advances in accountancy have occurred from the trading of grain to gold and etching of numbers to the abacus and taxation.
Over those thousands of years, business has always occurred face to face between two parties or people, however with the development of accounting software, the internet and the emerging evolution of cloud technology, is it still necessary to continue thousands of years of habit between the bookkeeper or accountant and their client to do all business face to face?
In modern times a bookkeeper will typically visit a client and manually process transactions onto desktop software to maintain the monthly books and the client will visit the accountant with this data when annual accounts or tax returns are required. With cloud technology – Is there a need?
Trust
With sharing such confidential and personal information a bond of trust does need to be developed between any bookkeeper or accountant and client. After all, a client wants to trust that their affairs are being dealt with professionally, confidentially and efficiently. This is usually cemented by the introductory or initial meeting to discuss affairs.
After the initial meeting, the bookkeeper will usually make a routine visit to the client premises to process expenses, invoices and financial transactions onto a desktop terminal. Have they unrestricted access to all company documents and sensitive information? Or only restricted to the accounting software? Do they have unrestricted access to the premises, files and documentation? Or only items prepared for processing?
Once preparing for the annual accounts and forwarding the reports and documents to the accountant, are you confident that per the letter of engagement, they or those named are dealing with your data? Are you getting value for money? Are they good at responding in good time? Is information easily obtainable, easy to understand and readily available?
Considering the above – Do you trust a bookkeeper or accountant because you have met them? A Skype, video or telephone call could be just as useful, more cost effective and quicker. Any engagement with an online bookkeeping or accounting practice should also follow the same client engagement process as a traditional practice with Anti Money Laundering (AML) checks, the signing of an engagement letter detailing the services provided and the signing of a confidentiality agreement.
With developments in technology, Cloud Software such as Sage, Quickbooks and Xero have become popular, however to an untrained user, are they processing transactions correctly? Is the correct input VAT being claimed? Is the correct output VAT being charged? Is the reverse charge applicable? Should a cost be charged to a Profit & Loss or Balance Sheet code on the chart of accounts? The need for a bookkeeper or accountant is still required to ensure regulatory and tax compliance – But does that bookkeeper or accountant need to be physically present to assist.
How does an online bookkeeping or accounting practice work?
Many cloud packages have add on apps that enable the scanning of receipts for expense claims or accounts payables so that they can be picked up by a bookkeeper or accountant remotely, processed and charged correctly to the books. This can be done via smartphone by simply taking a photo of the document and uploading it via the app.
Alternatively, some clients prefer to scan items into cloud document management systems such as Dropbox or OneDrive where the bookkeeper or accountant can pick them up and process the transactions as appropriate.
Communication is maintained during the course of the month between the bookkeeper or accountant and client via email, phone, skype or other mediums for queries and questions – However as transactions are processed in real time, up to date financials, statistics and Key Performance Indicators (KPI’s) are always visible to the client as and when required. Dependant on the hours that the bookkeeper or accountant is engaged per week, will determine how current the information is – For example if the bank account is checked once a week for receipts, then bill payments will only be allocated once a week and the clients debtors will run a week in arrears at all times. Reports can be run automatically to provide a Profit & Loss report, Aged debtors report or any other information required.
Cost
The cost of a traditional bookkeeper maybe inflated due to travelling to client sites, time not utilised correctly trying to identify or locate documentation. The cost of a traditional accountant will include the overheads of the practice such as rent, rates, utilities and support staff. There is also the cost of licensing, maintaining and upgrading your accounting software on a yearly basis.
Using an online bookkeeping or accounting practice is much more cost effective as bookkeepers or accountants work remotely and do not incur the same overheads or bottom line costs as a traditional practice. Meetings held using video technology, conference call or skype reduce wasted time and cost in travel to meetings. Cloud software is paid for by monthly subscription and there are usually no additional costs for maintenance, licensing or updating.
Could an online bookkeeping or accounting practice work for me?
An online practice is more cost effective and cheaper than a traditional practice which is perfect for start ups, SME’s or businesses with a low budget – Without compromising on quality.
As per a traditional practice, any online bookkeeper or accountant undertaking business should have professional indemnity insurance, be supervised by an accounting body or HMRC for anti money laundering and comply with the usual regulatory requirements.
Unless you want to stick with tradition, expensive systems and inflated bookkeeping or accountancy costs, join the evolution and consider using an online practice for your business today.
Ascentant provide Accountant and Bookkeeper services in Derby, London and across the UK. We specialise in Cloud Accounting and Outsourced Business Support including Legal Cashiering, HR Support and IT Support.
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