The digital-accounting profession has evolved at a remarkable pace over the past few years, and especially in the last two years during the pandemic. This evolution has been driven by adoption of the cloud, which allows accountants to work more flexibly, remotely, and virtually. Virtual accounting is transforming the way that services are offered and creating some great opportunities for businesses and accountancy firms.
Alongside this fast-paced digital innovation, however, are some really key issues that we need to consider, particularly around best practices. What are the best practices in a virtual accountancy service, and what are the really important things that need to be there?
What is virtual accounting?
When accountants work on-site, they’re part of the team, and communication is pretty straightforward. Working virtually, as a virtual advisor or CFO, requires communication to be more digital, making greater use of tools and apps such as instant messaging, Zoom, Facebook Messenger, WhatsApp, and the like. Good communication is crucial, as well as the right cloud accounting software to allow accountants to work effectively remotely, really underpins the success of a virtual accountancy service.
How does a virtual accountant add value?
When an accountant is physically present, clients can see them doing work, which creates value that the client can understand. In a virtual setting when the accountant is not there, the value provided can be less evident to the client. Instead of time served, the focus moves to achieve the end result without putting in all that time—especially time spent face-to-face. This is how virtual accountants are making sure that their clients are receiving value and why the communication and cloud accounting software is critical to success.
Many businesses will typically have an accountant on the team to do the day-to-day tasks, the month-end, preparing the year-end, tax filing, and so forth. Having a virtual accountant creates an opportunity that wasn’t there before. The in-house person provides a vital service for the business, but they may not see something happening that could trigger an audit or impact cash flow in a year because they are too close to it.
By contracting a virtual CFO, the client business gets a new higher value service that can oversee the finance function and provide an element of mentoring to the in-house accountant. This can help the staff accountant move beyond day-to-day detail and start thinking and working more strategically on a longer-term outlook—resulting in a hugely positive impact on the business.
For businesses, they can have an accountant with great experience, living in a smaller town, who can serve their needs for half the price of a typical CFO. For firms, virtual accountancy enables them to expand their own talent pool by looking at a much broader geography and casting their net much wider.
With the virtual accountant proposition, there is scope for flexibility in terms of pricing and service bundles. Given the choice between the uncertainty of a monthly fee that varies with their fluctuating service requirements (that they can’t budget for) and a fixed-price package combining all the services they need, including a virtual CFO, business owners are more comfortable with the latter.
However, communication of the value-add has to be spot on. Otherwise, what prevents a client from deciding to use a practice just down the street? If clients don’t understand what they’re getting for what they’re paying, virtual firms are going to run into trouble.
Demand for virtual accountancy services is growing, driven by clients who understand the role that a virtual CFO could play, without having to pay a full-time salary. However, that old adage “out of sight, out of mind” can still ring true. So make sure your communication works, that you are continuing to provide value, and that your clients can clearly see the business benefits of the virtual services you are providing.