Ironically, in many ways there has never been a better time to strike out on your own as an entrepreneur. This applies across many industry sectors including accountancy. The key to getting started fast, professionally and cost effectively is, of course, digital technology.
Despite the current uncertainty and unpredictableness of the world today (or maybe because of it—recessions are well-known breeding grounds for innovation) now could be the ideal time to go it alone as an accountant. Indeed, according to the 2020/2021 Global Entrepreneurship Monitor Global Report, although the number of new ventures launched in the UK in 2020 was down, the UK's entrepreneurial intention rate was one of the highest in Europe—this measures the intention to start a new business in the next three years.
This is good news as SMBs are the lifeblood of the economy, and a thriving SMB ecosystem breeds new opportunities for other ventures. Including, for instance, for accountants specifically geared up to meet modern SMBs’ financial requirements and to add real value to growing businesses.
It should be a foregone conclusion that digital is built into the DNA of any new business. And there are plenty of resources out there talking about how to build a digitally enabled business. Latest technology can shortcut so many of the fundamentals of setting up a business: from domain names, email addresses, and websites, to cloud-based software for everything from collaboration to marketing to invoicing.
Instead, I want to focus on how entrepreneurial accountants can use technology to do things differently. Because you're starting from green fields there's no reason to duplicate out-of-date tools and processes. This gives you an advantage over traditional accounting firms that might still be migrating away from legacy ways of working. An added benefit of digital technology is that it gives you the power to punch above your weight as an entrepreneur, allowing you to do more with less, work from anywhere, and scale rapidly without the traditional costs of growing. And finally, technology and capabilities previously only available to enterprise size organisations are now readily and affordably available to entrepreneurs and small businesses.
Adding value as an accountant
One of the first things most entrepreneurs and small business owners realise when striking out on their own is that suddenly they need to look after all aspects of their business. Those that don’t frequently end up out of business! They might have set out to build on their passion for and skill in catering, or fashion design, or construction, but suddenly managing their cash flow and hitting financial targets starts taking over their day. I have seen far too many startups fail because the ingenuity of the entrepreneur is drowned in the red tape, or important financial admin is ignored resulting in cash flow failing or being unprepared for the tax man calling.
In many respects this financial admin has taken on increased significance during the pandemic with dramatically shorter financial cycles and the emergence of opportunities you can only take if you are agile and flexible enough to grab them. This is a gap the fledgling accounting practice can step into and add true business value to entrepreneurs, freeing them to focus on building their businesses.
As well as building digitally enabled businesses from the get-go themselves, newly independent accountants should rethink the services they provide to their clients. Financial reports a month or a quarter after the fact or no longer good enough. Nor are reports that aren’t contextualised to the business, its goals and KPIs, and real-world impacts. Small business owners need critical information on time and at the right time, even daily, and in a format that makes sense to them and allows them to make business decisions.
If, as an accountant, you provide this instead of falling back on legacy timeframes and reporting styles, you can truly add value to a growing business. And this is the second reason for taking a digital-first approach to going it alone as an accountant. You cannot achieve this level of service if you are data entering shoe boxes full of client receipts every quarter and then matching them to bank statements before allocating them to expense accounts. Nor will you achieve this by sending clients updated spreadsheets with no context once a month or even once a quarter.
From payments through to budgeting, forecasting, and reporting, think digital first. For instance, advise your clients to use one of the many digital payment options that sends receipts in real time. You'll probably find many, if not most, of your clients prefer working like this anyway and expect the same from you. And the small business owners that are still at the “receipts in a shoebox” stage? You get to educate them and help propel their business into the 21st century, setting them up to taking advantage of future growth opportunities.
Likewise, your communication back to them. Give your clients access to tools that are easy to use and understand without a financial mindset. Tools that tell the business owner what is happening in their business from day to day, and how this compares to their KPIs and historical performance. This provides peace of mind as well as information they can act on immediately.
If going it alone is your ambition, as an accountant, you can grow your own business and support the growth of other startups and small businesses. Use digital technology to drive this by working smarter and in new ways, spending your time on what really can make an impact, and ensuring your clients never have to hand you a shoebox of paper receipts ever again.
As published Accountingweb - May 2021