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Why Accountants Are Your Best FinTech Friends

Ben Smith is the Head of Business Development at AccountingWEB. AccountingWEB is the UK’s leading website for accountants offering timely, insightful and trusted answers on compliance, business and technology issues to help accountants do their jobs better.

Currently, there are over 40,000 accounting firms in the UK, representing over 3.5m small business clients.

When you think of an accountant, you probably picture the headlines about ‘Big Four’ audit failings, or perhaps someone in a crumpled suit, huddled over a spreadsheet, calculator in hand.

If you’re new to this world, you’re probably not picturing your customer’s most influential business adviser. You’re probably not thinking about some of most influential agents of FinTech disruption either.

However, accountants have been hugely influential in the UK’s small business economy for decades. They shepherd the UK’s SMEs through the intricacies of one of the world’s most complex tax and accounting compliance regimes. You’ll have heard the term ‘trusted adviser’ because it’s true. SMEs need help to navigate tax codes and accounting treatments, and accountants are trained to do exactly that.

Still, the compliance world is simplifying, with the UK government rolling out various initiatives designed to digitise the tax and accounting obligations. Simplification leads to commoditisation of compliance services, and accountants are gradually evolving to offer services beyond compliance – business planning, forecasting, funding advice, and many more.

Accountants are becoming more than ‘just’ compliance shepherds. They’re becoming the new guardians of the UK’s SME economy.

You’ll have read the stats about 50% of new businesses fail within three years. That number falls significantly if they’re working with an accountant. And this is because accountants don’t just advise on tax issues anymore. They support their clients with business decisions, and that includes the tools and products they should use in their business.

Accountants understand that to provide these new era ‘advisory’ services, they need to have visibility on accurate data, and the ability to do things with it. And that’s where FinTech comes in. FinTech provides the tools that makes that data visible, actionable and useful.

If you can convince an accountant that your FinTech product can help them to solve problems for either themselves, or their clients, you’re going to win more than the accountant as a user. You could win their entire client base. Because the accountant can make that happen.

Why accountants are important to the FinTech revolution

And, there are increasing numbers of FinTech business and banks who are realising that accountants can be their best friends.

You may not think that accountants are always going to be the centre of gravity in this conversation, but that’s not really the point right now. As we see accounting technology vendors start to innovate beyond core accounting software, the distribution model they’ve developed via the ‘accountant channel’ will become the way these technologies proliferate the small business landscape.

So if you’re not making the accountant a priority, others are – and they’ve got a headstart on you.

So when you’re thinking about your small business-facing FinTech proposition, you may see the accountant channel and think, “These guys could be a really good distribution channel for us. We can reach 500, or a thousand customers if we can just get this one accounting firm on side”. You’ve got a great solution that will support this accountant’s client base, solving problems for both parties. You scale quickly. everyone wins.

As ever, it’s not quite that simple anymore.

As this space becomes more and more crowded, the way to win the heart and mind of a given accountant cannot be restricted solely around an end-user (or client) focused solution. Your proposition has to provide direct value to the distribution partner – in this case the accountant.

The apps your clients will be using in the near future

That value exchange used to be predicated on financial incentives, and while that could still happen, various legislation has been passed to inhibit that model. So a FinTech or bank needs another way to provide value to the accountant.

With this in mind, there are two layers to what an effective accountant-facing proposition will comprise.

  1. Technology and productivity: What can your proposition do to make the accountants life easier? Can you reduce manual data entry points? Can your product support other processes they need to follow?
  2. Business development and maintenance: What can you do to make it easier for an accountant to grow their client base, or to maintain it effectively?

Now, the makeup of those proposition layers could be many things, but the important point is that not all accountants are the same, and their proposition requirements are as varied as their business models.

There are ‘compliance superfirms’, ‘boutique advisors’, ‘general practitioners’ to name just three. Your proposition needs to take their needs into account when you’re developing your accountant-facing narrative.

Accountants can be your best friend, and you probably need them to be. But they can’t be an afterthought to your proposition. If they’re going to be part of your distribution model, then they need to part of your development process. If you can get that right, you’re opening the doors to a genuinely scalable model.

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