It used to be that a typical CPA firm did clients' taxes, prepared their P&L and financial statements, and that was that. These days, however, there are fewer “typical" CPA firms left. Firms now engage in a much wider range of activities as they seek to diversify, differentiate, and grow by offering their clients value-added services.
They might be handling tax work and serving as a business process outsourcing (BPO) firm—handling the day to day responsibilities of accounts payable and accounts receivable. Some are even getting into technology consultation and implementation, helping their clients improve security and simplify processes. Others are adding ERP divisions.
With the rise of new B2B financial technology (fintech), the opportunities for CPA firms to offer new services have never been better. These fintech solutions are cloud-based, easier to implement, and less expensive to operate than on-premise server-based environments of the past. Plus, they're much easier to use and offer far greater visibility and agility.
What's more, optimizing client processes and making them more transparent benefits the CPA firm through simplifying its role. This way, new resources are generated and reinvested, adding value for client services.
There's a lot of leverage to create, and it's time for accounting firms to scan the horizon to see what else they might bring to their clients.
Fintechs are advancing into every aspect of B2B financial services. Where people once turned to off-the-shelf software for their accounting and ERP solutions, they're now looking to cloud-based options like Xero, Freshbooks, NetSuite, and Workday.
But Fintech isn't stopping there—it's moving onto e-invoicing, expense reporting, data sharing and protection, compliance, tax management, and fraud control services. Fintechs are innovating ahead of banks by offering cheaper and faster lending, trade finance, and payment services. It's no surprise, then, that some Fintechs are even considering getting a bank charter to become banks themselves.
In the area of vendor payments, banks haven't come up with any new offerings since the rise of virtual cards (and that was over ten years ago). Also, banks haven't been able to provide a complete payment solution. Here's what I mean.
While card programs and ACH solve a piece of the payments puzzle, the bulk of the manual workload is managing supplier information and creating payment files to send to the bank.
That's why, even as consumers have embraced electronic banking and moved away from paper checks, companies are still writing so many checks. Many companies have concluded that banks' electronic offerings are more work than they're worth.
Fintech solutions, however, cover all types of payments in one solution, along with the manual prep work that goes into issuing payments. Companies can make 70 percent or more of their payments electronically, which saves a lot of resources— especially if you're a BPO writing hundreds of thousands of checks on behalf of your clients.
The bigger benefit over the long term, though, is visibility. Because the solution is in the cloud, payments are visible throughout the entire lifecycle, which is helpful for those following the virtual paper trail.
For outsourced accounting organizations that process payments but don't have visibility into the customer's bank account, they can access a portal and see all the transactions—even when checks clear.
Firms can run reports and perform analysis throughout the year instead of waiting for emailed data files or a giant manila envelope to arrive in the mail. It's this ability to automate report delivery that's a huge lifeline during the crunch of tax season.
For BPOs, visibility into payments eases workflows with vendors. This visibility over payees, how much, and how often they are being paid, could help negotiate better payment terms with the vendor. It may even help to harness another fintech to manage dynamic discounting or supplier finance.
PO matching or invoice automation are other possibilities. There are even fintech solutions that automate the book closing and reporting process.
Fintech solutions like these are easier to integrate than their predecessors, freeing you up to think beyond historical limitations. The more you help your clients automate, the leaner and more efficient you both become.
The world has changed since the days when accounting firms only saw their clients at tax time. It's hard to differentiate yourself on just preparing taxes and financial statements. There is always going to be someone who can crunch numbers at a cheaper rate.
Offering value-added services strengthen relationships and help firms create new revenue streams to grow along with their clients. Plus, clients get expert advice from a trusted advisor that knows their business intimately.
It's time to explore the world of Fintech to see what you might be able to offer your clients. From compliance to book closing to vendor payments—there's a Fintech for that.