Small Business Accountants Play Catch-Up in the Cloud

By Pedro Hernandez | Posted December 17, 2014

Accounting software specialist Sage has some worrying news for small business owners. Their accountants are failing to keep up with the times.

Sage's survey (PDF) of 264 accountants in the U.S. found that just 10 percent of respondents leverage the cloud or online services to collaborate or share information with their clients. That's right, in an era of real-time business processes, accountants bring productivity to a halt with in-person meetings, and perhaps most unforgivably, stacks of dead tree.

"Ten percent is a very low number, and it is concerning," Jennifer Warawa, vice president and general manager of Sage Accountant Solutions, told Small Business Computing. "The rate of adoption is not where we need it to be. Businesses are moving faster than their accountants."

Small Business Accounting: Mind the Cloud Gap

As Warawa noted, independent shops, restaurants and professional services providers are flocking to the cloud as a cost-effective means of leveraging enterprise-grade business capabilities. No longer does a small company need to dedicate hours each day to data entry.

small business accounting in the cloud

For example, these capabilities include swiping sales transactions into an iPad that doubles as a mobile point-of-sale terminal; instantly approved credit cards; updated inventory and revenue logged into the bookkeeping system—all thanks to the cloud. Business intelligence and analytics programs mine data more efficiently, and let SMBs focus on their customers instead of spending hours digging through business data.

The missing link: accountants.

"Clients want real-time advice," said Warawa. Quarterly or once-a-year check-ins no longer cut it. Today's competitive small business landscape demands that their sales, marketing, and yes, even accounting, work in an agile, responsive and a proactive manner.

Small business owners no longer wait to course-correct after a bad month or a bad quarter; they optimize their operations practically on the fly, pouncing on each and every opportunity. And they need accountants that can spell out how changes in their operations affect the bottom line.

Avoiding cloud-enabled technologies causes other productivity-draining effects on the client-accountant relationship.

Small Business Accountants: Stuck in the Past

Thirty percent of accountants said that the biggest pain in working with clients is collecting documents on time. As Warawa observed, "small business owners want to spend time running their business, not gathering paperwork."

Entrepreneurs view the activity as a time drain and "see so little value coming back," she said. "Everything happens in real-time now," and fetching documentation feels like a step backward, so it's little wonder that small business owners drag their feet and put it off to the last minute. Cloud and online services make it a relatively trivial task to "get these transactions through technology," and many accountants don't capitalize on that fact.

More than half of the accountants surveyed (58 percent) rely on old-school methods. They most often conduct face-to-face meetings with clients, and their data format of choice: physical documents.

That statistic doesn't bode well for cloud-phobic accountants, said Warawa. "People are less and less concerned about where the person they're going to work with is located," she said. Across town or across the country, small businesses that want real-time accounting services don't care what town their accountant calls home.

Accounting for Change

Despite the study's findings, Warawa said it's important not to paint the profession with too wide a brush. Tech luddites, accountants are not. They're just a little late to the party.

A majority of accountants, 62 percent, said they plan to supplement their accounting services in the next year in ways that go beyond simply squaring matters with the IRS. Accountants, by and large, want to leverage their expertise and become trusted advisors for small businesses.

Accountants plan to provide payroll help, business mentoring, and startup advice—among other services that are tailor-made for cloud and online services. "I see a lot of interest in change and for innovation," which is encouraging, Warawa said. All that's required is for accountants to make the leap to modern, cloud-based work styles.

Small business owners can help. "Demand that it gets better," advised Warawa. "Setting a new bar for expectations—and communicating them—is very important," she added.

Pedro Hernandez is a contributing editor at Small Business Computing. Follow him on Twitter @ecoINSITE.

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