For small accounting firms, embracing technology is key to success
After working for over a decade as a tax specialist and accountant, I joined the millions of people who lost their jobs at the height of the pandemic. But instead of losing my motivation, I decided to see the chaos around me as an opportunity.
As small business owners searched for Payment Protection Program loans and completed the related – and complicated – financial reporting, I quickly realized that more needed to be done to support small businesses and their accounting needs.
It was then that I took a leap of faith and founded my own accounting firm, not only helping entrepreneurs weather the headwinds of the pandemic, but also becoming a business owner myself. ‘a little company. But as my days got longer and my operating expenses piled up, I needed to pivot again to stay afloat. My first step: ditch the outdated payment systems.
Several time-consuming tasks needed a better solution. When I received payments from third-party merchants, I spent way too much time trying to apply the payments to the correct invoice. Due to the service charge being deducted, I often did not receive the total amount of the bank transactions and it was difficult to apply the payment to the correct bill without knowing the exact total of the service charge to be subtracted from the bill. I then had to complete additional steps, such as logging into the merchant portal and printing the reports, before I could apply the payment to the invoice.
That’s when I opted for an innovative technology to save time and money, both for my company and for my customers.
There are dozens of platforms and apps specifically designed to help tax and accounting professionals do their jobs more efficiently, and many of them are free or low-cost. Especially for small businesses like mine, where resources are scattered, taking advantage of these tools is essential.
After researching the market for the best option for my particular situation, I started using a payment platform called Melio, both as a standalone platform and through its integration with Intuit’s Quickbooks. With Melio, I was able to reduce the time I spent on customer accounts by 80% and save my customers $60 per month in merchant fees alone.
Technology is not a panacea, but it can certainly help businesses through periods of economic instability. More than ever, small tax and accounting firms, and small businesses in general, need to take advantage of technology. Small businesses are often exceptionally selective about the investments they make, but I can promise you that taking the time to research technology that can solve your problems is well worth it. Using a customer portal, for example, will help streamline the onboarding process and make it easier for new customers to sign up.
Of course, it is equally important to continuously educate yourself and your staff on preventing and responding to data breaches and other cybersecurity threats. A 2015 report found that 60% of all targeted attacks hit small and medium-sized businesses, and cybersecurity has only grown as a concern in recent years. Especially in the tax and accounting area where we are responsible for our clients’ most sensitive personal and financial information, it is necessary to invest in reliable security software and learn how to protect your clients’ information. As part of this technology conversation, I also want to urge my tax and accounting colleagues to use value pricing instead of hourly pricing. In our business, we are paid based on our knowledge and years of experience, not the time it takes to complete a particular job. Automation saves us time, but that doesn’t necessarily mean we should charge less.
The pandemic has reminded us that with every challenge comes an opportunity to become something even greater. Like so many others, I was forced to adapt and reinvent myself. I learned many lessons, but one of the biggest was the need to embrace the digital revolution and look for new tools to save time and money. For a small business like mine, technology is playing an increasingly central role, and that’s a good thing, because every dollar counts.
This article does not necessarily reflect the views of the Bureau of National Affairs, Inc., publisher of Bloomberg Law and Bloomberg Tax, or its owners.
Sabrina James is the owner of the accounting firm AccountTAXtic. His training in accounting and taxation began as a senior accountant for multi-million dollar residential and commercial real estate companies. James helps small business owners and individuals manage their finances, increase profits and grow their businesses.
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