We featured in this Sunday Star Times article profiling leaders in online accountant services. We are thrilled to be seen as “leading the charge” into the new territory of accountants in the cloud.
By Tom Pullar-Strecker – Sunday Star Times, Business Section 20 July 2014
Accountants’ Heads In The Cloud
MOST SMALL businesses are used to having a close relationship with a local accountant.
But a new breed of accounting is seeking to commoditise the job of preparing end-of-year accounts for small businesses willing to forgo the personal touch.
It typically costs a couple of thousand dollars for a small business to have its end-of-year accounts prepared and checked by a chartered accountant, then filed with the Inland Revenue Department.
Some economise by having a bookkeeper do their annual accounts, or even by tackling the job themselves.
But discount accounting providers are providing a third option by using the internet and varying levels of automation to cut their fees to hundreds of dollars, while still having an accountant check over clients’ accounts.
Adam Ferguson, general manager of the accountants division of MYOB New Zealand. said they were a new phenomenon. Their “light-touch” approach and nationwide catchment means business owners can’t pop round for a cup of coffee and a chat, or not unless they pay for it.
One of the companies leading the charge is Taupo beany.biz. Its founder, accountant Sue de Bievre, engaged the services of former Weta Digital software developer John Curtis to develop a cloud-based online accounting service which integrates with accounting packages such Xero and lets clients upload documentation, such as receipts, electronically.
Beany.biz charges $899 to prepare and the accounts of businesses with a turnover of less than $1.5 million and fewer than 10 staff. Curtis says about 150 clients are now using the system, which launched in October. Their accounts are checked over by one of its team of three accountants.
Software from the likes of Xero and MYOB has changed the way a lot of businesses keep their books, but some accountants are still charging as though they are doing all the paperwork for clients, Curtis said.
Beany.biz’s philosophy is a summed up by a “frequently asked question” on its website: “Can I come visit you? We’re flattered. but no. There are plenty of traditional accountants around if you like to pop in for a chat in a well-appointed boardroom over a very expensive coffee.”
Further at the bargain basement end of the market is Auckland firm Tax Squared, which launched a $199 service in June aimed at small businesses with uncomplicated tax affairs that turn over less than $500,000 a year and which may not use any accounting software.
Clients download an Excel workbook they can use to key in their data, and upload it once it is in. Tax Squared then compiles their accounts and has them checked over by either an accountant or a chartered accountant, depending on their complexity, who will provide up to 20 minutes on the phone to sort out any issues.
Clients will need to print their accounts and file them with Inland Revenue. If businesses need their expenses coded, Tax Squared will arrange to have that done in India for “a small fee”.
Tax Squared owner Mike Levertoff said the accounting market was splitting between accountants that catered for businesses that might need to share financial information with a bank or other external stakeholders, and those serving the “bulk of New Zealand” for whom the services of a chartered account and the language of their reports were usually “overkill”. He defined the latter group as including the likes of “mum-and-dad businesses”, tradesmen and property investors.
Peter Vial, New Zealand tax leader at Chartered Accountants Australia and New Zealand, has a slightly different perspective. Although technology was having an impact, the accounting market had always been diverse. and practitioners had been offering different levels of service at different price points for a long time, he said.
lt was not just with external stakeholders that could benefit from using a chartered accountant. “Most people would realise they would need professional advice, and if they go to a CA they have got the backing of standards and qualifications. which is not what they are getting if they are just putting data into a computer. A lot of small businesses fail at the outset, and getting advice upfront and strategising as to how to grow is really crucial.” he said. “The statistics on business failures are a salutary lesson that it is best to get it right to start with.”