Dos and don’ts of new age accounting
Accounting has evolved and if you are not keeping up with the latest advances, chances are your clients won’t be satisfied or they may drop you entirely. With new and more stringent regulations being imposed, along with the advent of cloud computing and escalating competition, you have to stay ahead of the curve to flourish.
Let’s examine some of the dos of “new age” accounting:
Provide clients with unique business insights and reports: Client may know their own work well, but as an accountant you can offer them much more value than just accounting. With the help of your accounting software, you can generate specific reports tailored to the client’s business. For example, if your client is a startup company, you can deliver them a cost-tracking report. For a startup, spending less money is necessary to their existence.
For all types of clients, you can provide reports such as financial ratios, aging reports, etc. Your client may not be recording these details and will be happy for your extra service. This is a better way to stay ahead of the competition. As accountants, we can construct reports and gather important insights with a few clicks because your accounting software will do the rest of the work for you.
IFRS accounting: I do accounting in India as per International Financial Reporting Standards, but if it’s not a statutory requirement, chances are the books are not drawn up in accordance with IFRS, particularly in the U.S. I am an accountant and I realize that.
But, as business becomes increasingly global, it may be important to some clients for their books to comply with internationally established accounting norms. It can help a client obtain additional funding from a foreign investor or expand their business in jurisdictions outside their home country. If they are required by law to file in IFRS in addition to U.S. GAAP, that can be a valuable service for clients for which you should be able to charge extra compensation.
Global tax management services: If your clients have market activities in different countries, you may be able to offer them international tax management services. Many times, clients wish to obtain all their tax services under one roof. If you’re not providing the required function, they will turn to someone else. If you aren’t already providing international tax services, consider expanding into that field.
If your clients sell products or services over the internet, they may already be subject to taxes in different regions. By providing global tax management functions, you can assist those clients with their needs.
Accounting in the cloud: Technology has transformed the manner in which we do our accounting, but the cloud is advancing it further. Nowadays, clients are on the move. They need data wherever they are, not just in their offices.
If you are preparing books for your clients in the cloud, you and they can access important information from anywhere. Doing accounting online equips you to work from home. You can connect the client’s systems with yours and share reports, helping you do their accounting in a more efficient way. If we listen to music on the cloud via Spotify and share documents in the cloud through Google Drive, why not do our accounting in the cloud?
Those are a few of the dos of modern accounting. Now, we will examine a few obstacles on the road that we should try to avoid:
Don’t overlook a client’s suspicious activities: While Big Four firms sometimes have to pay heavy fines and penalties for masking a client’s violations, as a small or midsized firm you might not be able to afford those costs. As an accountant, chances are you will be in a position to spot a client’s questionable activities or illegal deals. The statutes often provide directions for accountants to report on a client’s dubious actions. If you are in such a position, you need to follow the legal procedures. Accountants can be held equally liable as the CFO or CEO of a corporation for any unlawful economic transactions or questionable operations that can influence the shareholders of the company. It is the duty of an accountant not just to defend the owners, but other stakeholders of an organization, which includes shareholders, investors and employees.
Keep staff assignments intact: When you appoint someone from your organization to service a client, take a moment to work out any transition issues. When individuals are in regular contact with a client, they develop a unique rapport with the client along with a professional one. They know the client’s personal traits such as their behavior, way of talking, etc. If you switch the staff member assigned to your client, it breaks the link between your client and the appointed staff. That can frustrate a client since they may be accustomed to working with a particular person and now someone else is handling the work for them. Before appointing someone new from your staff to service an existing client, try to pick someone who will have a better understanding of your client if possible.
Focus on ROI instead of tax savings: I am not suggesting you shouldn’t concentrate on managing taxes for your clients, but this should not be the only aim for us as accountants. We think in terms of tax planning and saving taxes, but we should look for a higher return on investment for our clients too. Everybody prefers to have better returns on their wealth and that includes your clients as well. If you can offer your clients the necessary advice for obtaining better yields on their capital, they will be grateful that you are their accountant.
For example, to save on taxes, we may utilize government schemes by investing in them under the law, but that could also lock out our client’s capital for a specific period. Instead, it may be better to pay the taxes and free up the cash to invest in another opportunity that yields better gains than the government plan. This approach can hone your competitive edge.
As the digital age advances, we as accountants should evolve with the times. Change alone is perpetual, and it’s better to be part of the change than be against it.