How the accounting profession has changed – and why it’s great news for your business

How the Accounting Profession has Changed
15
Feb

It’s been over 500 years since an enterprising Franciscan friar named Luca Pacioli came up with the concept of double-entry bookkeeping.

Although he probably didn’t realize it at the time, what Pacioli was doing was setting the foundations for the formalized industry of accounting and bookkeeping –producing a system that allows entrepreneurs, business owners and finance teams to account for every single transaction that comes through their business – and by doing so, know exactly where their money’s going.

Until very recent times, accounting hadn’t changed that much since the 1400s when this double-entry system was first invented. Bookkeepers noted down every payment and cost incurred by the business, and the accountant then took these ledgers and turned them into formal paper accounts – giving the business owner and their management team a historic view of their financial affairs over the past year.

But as technology and software have filtered through into the accounting industry, changes to the way bookkeepers and accountants carry out their work have revolutionized that way we manage business financials.

In short, rather than dealing purely in historical transactions (and what happened in the past), a modern cloud-based CPA can now help your business forecast its future financial performance.

And being able to ‘see into the future’ is an exceptionally powerful tool for any business owner to have access to…

No more looking in the rear-view mirror

For over five centuries, accountants and their business clients have been metaphorically ‘looking in the rear-view mirror’ when it came to examining accounts and business numbers. All the time and effort went into looking backward, pouring over those historic accounts and looking at what had HAPPENED, but what couldn’t be CHANGED (unless you happened to have a time machine).

The quantum shift that’s taken place in the past decade or so, is that accountants and CPAs are no longer focused purely on those past accounts, and have realized the value of projecting your business numbers forward in time.

To follow our metaphor through to its logical conclusion, accountants have stopped looking in the rear view and are finally looking out the windshield. And as any driver will tell you, you’re clearly going to have a much less accident-prone journey when you’re looking at the road ahead and not the path behind you!

Learning to the look to the future

Historically, accountancy has been quite self-depreciating as a profession. We know that the popular conception of a CPA is of someone obsessed with getting the books to balance, and when we refer to ourselves as ‘number crunchers’ or ‘bean counters’, you can see how that misconception has been given weight.

But, in fact, modern, cloud-based accountancy leaves almost all of the boring, tedious ‘bean-counting’ to the software. With the help of software automation, financial tools, and mobile business apps, most of the actual bookkeeping is now done by the machines – and that’s freed up the average accountant’s time to get a lot more proactive and strategic with their business advice.

Cloud accounting solutions, like Xero online accounting, combined with the latest in online reporting, forecasting and business intelligence tools, have given accountants the ability to step into the future.

  • Client’s financial data can be easily pulled out of Xero and projected forward in time – so we can tell you your potential profits in six months, two years or ten years down the line.
  • We can look at the trends, patterns and seasonal dips in your business’s cash flow over preceding years and tell you exactly when to rein in your spending to keep you in a positive cash-flow situation throughout the year.
  • We can create clear, insightful reporting for you – with data visualizations of your sales, revenues, overheads, and expenses – and give you the solid empirical overview your bank will need before lending money, or investors will want before buying into the company

In essence, by working with the new breed of cloud accountants, you get a combination of technological expertise, real-world business experience and financial insight that helps you avoid every bump in the road… and reach the most profitable destinations without running out of gas or hitting an unexpected roadblock along the route.

A year-round working relationship

In the bad old days of accountancy, most business owners were lucky if they saw their accountant more than annually. Once you’d submitted your return with the IRS and filed your annual accounts, you were done for rest of the year.

In 2017, the real-time nature of cloud accountancy means we can have a proactive, in-depth working relationship with your business throughout the whole financial cycle. Online accounts can be accessed at any time, from any location with an internet signal, so an effective collaboration process between CPA and client is far easier to achieve and far more productive in its output.

  • We’ll talk to you regularly throughout the year, checking in with you on performance and providing the reporting and forecasting you need to be efficient and profitable.
  • We’ll work with you to create a solid, practical business plan that will be the driver behind your profitability, growth potential and long-term success.
  • When there’s a big business decision to make, we’ll be there to provide the hard numbers, supply the forecasts you need and give you our insights into how each scenario will impact the business.
  • If there’s a sudden cash-flow crisis, or sales take a nasty dip, we’re at the end of the phone line to help you plan a resolution, get your finances back in order and keep you on track with your business plan.

As cloud business advisors, we’re no longer distant strangers who complete your accounts at the end of each business year. We’ve now very much part of your management board – an integral feature of your strategic thinking, business decision-making, and financial management – but for much less than paying a full-time CFO.

That metamorphosis from historic bookkeeper to cloud-based advisor really has revolutionized the value of working with an accountant– and that’s great news for business owners that have big, aspirational plans for their future.

Find out what a cloud accountant can do for your business

At Polay+Clark, we’re obsessed with delivering efficiency and cloud integration for our business clients

We help every client to get the absolute best from the cloud. We’ll implement your business systems, talk to you regularly, and use your financial information to help you make the right decisions throughout the year.

If you’ve gotten used to the old way of working with your accountant, now’s the time to switch to a CPA who can do more for you.

Get in touch with us and see just how much value a modern accountant can bring to your business.




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