As a small business owner, you are responsible for everything. From finding new clients to dealing with enquiries and ensuring your product or service is the best on the market, the buck stops with you. So, entrepreneurs and small business owners tend to outsource their accounting, usually to a local accounting firm. The thing is, small accounting practices have costs of their own – staff, office space and marketing to name a few. In order to make the business profitable – just like your business – these costs are passed on to you, the client.
This type of engagement used to make sense. In the years before dealing with online businesses was standard practice, business owners had a responsibility to make sure someone reputable was dealing with their finances. The best – and realistically the only – way to do this correctly was to find a local accountant, meet them and hire them. As a result, small accounting practices grew based on reputation, along with their infrastructure and fees. In a sense, the accounting businesses grew alongside the organisations they were servicing.
This is no longer the case. Accounting firms have been given many years to reduce their overheads and make their pricing more competitive. Online accounting is now standard practice, and a large percentage of small business owners never meet many of their professional service providers. Why? Because once the requirements of the business are clearly defined, a business owner doesn’t want to waste their time if they don’t have to. Time is money, and money is money so it’s better to spend less time with your accountant, get the same results and pay less for them.
Importantly, this opportunity has come about through the extraordinary growth in popularity of Xero, Quickbooks Online, and other virtual accounting systems that enable service providers to directly engage with the weekly monthly and even daily accounts of a business. Urgent questions can be answered via a messenger app, and receipts can be stored online. As a result, not only are online accountants easier to engage with and cheaper, but because they’re dealing directly with the accounts and can respond reactively, they are generally far more effective.
Traditional accountants will continue to exist, but unless they can find a way to justify higher fees and lost time, their days are likely to be numbered.