We spoke to Tom Edwards, Operations Director at Churchill Knight & Associates, to find out his thoughts on developing consultancy services within accounting firms, and how technology can make it easier…
Small accounting firms have remained largely consistent with their business models since the arrival of the digital age. The number of clients an accounting firm can service has, historically, depended on the number of personnel within a company.
The software used in accounting firms has changed in the past decade, helping accountants make some internal processes more straightforward. But manual data entry is still a significant component of accounting firms’ business models. At least, until now.
Innovative accounting firms, like Churchill Knight & Associates, are finding exciting ways to grow their business without needing to drastically increase the size of their workforce. Churchill Knight has now even extended its support to Umbrella companies, assisting with managing contractor payments – we covered the story in an earlier post. Efficiencies, enabled through technology, are also creating the opportunity for small accounting firms to dramatically improve their customer service, retaining clients on a value basis.
When Modulr spoke with Tom, we learned how the company had grown their operational capacity through technology. And he also offered advice on what other ambitious accounting firms can learn and apply to their own businesses.
Small accounting firms will need to be more competitive if they are to retain clients in future. Customer expectations have skyrocketed recently with 66% of millennials, the largest customer base by size, reporting that their customer service expectations had increased in the past year
At the same time, technological solutions have reduced operating costs for accounting firms, lowering the bar for entry. Ambitious accountants interested in setting up their own firms can do so more easily than ever before. With competition likely to increase, accounting firms of the future will need to evolve, proactively supporting their customers to safeguard their existing client base.
Previously, expanding the client service capacity of accountants would have been difficult due to the manual nature of verifying financial accounts. But new technological solutions can create enough efficiency to allow accountants to achieve more with the tools they already have.
By contrast, small accounting firms that are resistant to change and insist on traditional methods won’t take advantage of efficiencies afforded by modern technology.
Hiring additional staff is a significant business risk, which means that a lot of small accounting firms, with limited capital to invest, won’t be able to expand their service offerings in line with market expectations.
As Tom explained, clients base their decisions to invest on outputs and aren’t concerned with back-end processes behind the scenes. If a competitor offers a superior service for the same cost, there’s no reason to stay with a more traditional firm.
So how did Churchill Knight manage to use technology to dramatically increase efficiency and customer service?
Churchill Knight uses Modulr’s Payments Dashboard for all operational payments, including every invoice and client payment, totalling receipts worth approximately £10 million every month. According to Tom, the most significant difference Modulr makes to the business is how seamless the technology makes the process for outbound payments.
With accounting software integrated with Modulr’s payments platform, there’s no need to evaluate and re-evaluate BACS files manually. When payroll is run, Modulr automates the process, ensuring that there’s no room for human error.
Reconciliation occurs between Modulr and My Digital, Churchill Knight’s payroll system, in seconds. Staff at Churchill Knight are thus available to take on additional clients and provide a more personalised experience for their current customers.
For ambitious accounting firms, the advantages of leveraging tools that integrate with real-time payment platforms like Modulr couldn’t be clearer. Successful accounting firms of the future will be more customer-centric, thanks to recent technological innovations that are at their fingertips right now.
Resisting change, however, will put more traditional accounting firms at increasing levels of risk. Adapting today could save the viability of traditional accounting firms in the coming years, but they will need to move fast if they hope to catch up on a rapidly evolving market.