For small firms, embracing technology is key to success
After working for more than a decade as a tax and accounting specialist, I joined the millions of people who lost their job at the height of the pandemic. But instead of losing motivation, I decided to look at the chaos around me as an opportunity.
With small business owners seeking Payment Protection Program loans and completing the related—and complicated—financial reports, I quickly realized that more must be done to support small businesses and their accounting needs.
That’s when I took a leap of faith and founded my own accounting firm, not only helping entrepreneurs navigate pandemic-related headwinds but also becoming a small-business owner myself. As my days grew longer and my operating expenses added up, however, I needed once again to pivot to stay afloat. My first step was abandoning antiquated payment systems.
There has to be a better way to pay
There were several time-consuming tasks that needed a better solution. When receiving payments from third-party merchants, I spent way too much time trying to apply payments to the correct invoice.
Because of deducted service fees, I often did not receive the full amount on bank transactions, and it was difficult to apply the payment to the correct invoice without knowing the exact total of the service fees to subtract from the invoice. I then had to take additional steps, such as logging into the merchant portal and printing the reports, before I could apply the payment to the invoice.
That’s when I leaned into innovative technology to save time and money—both for my business and for my clients.
Technology comes to the rescue
There are dozens of platforms and apps specifically designed to help tax and accounting professionals do their jobs more efficiently, and many of them are free or come at a low cost. Especially for small firms like mine, where resources are spread thin, it is critical to take advantage of these tools.
After searching the market for the best option for my unique circumstances, I began using a payments platform called Melio, as both a standalone service as well as through its integration with Intuit’s QuickBooks. With Melio, I was able to cut down the time I spent on accounts receivable by 80% and save my clients $60 a month just in merchant fees.
Technology is not a panacea, but it can certainly help firms navigate times of economic instability. More than ever, small tax and accounting firms—as well as small businesses, in general—need to leverage technology.
Small businesses are often exceptionally selective about the investments they make, but I can promise you that taking the time to research technology that can address your pain points is well worth it. Using a client portal, for example, will help streamline the onboarding process and make it easy for new clients to sign up.
Cybersecurity is a concern, not a barrier
When using online tools, it’s important to continuously educate yourself and your staff on preventing and responding to data breaches and other cybersecurity threats. A 2015 report found that 60% of all targeted attacks struck small to mid-sized companies. In the years since cybersecurity only grew as a concern.
In the tax and accounting space where we’re responsible for our clients’ most sensitive personal and financial information, it’s necessary to invest in reliable security software and learn how to keep your clients’ information safe.
A billing paradigm shift
As part of this conversation on technology, I also want to urge my colleagues in the tax and accounting space to use value pricing instead of hourly pricing. In our business, we should be paid based on our knowledge and years of experience, not how long it takes to complete a particular job. Digitization saves us time, but it doesn’t necessarily mean we should charge less.
A lesson for the post-pandemic world
The pandemic reminded us that with every challenge comes the opportunity to grow into something even greater. Like so many others, I was forced to adapt and reinvent myself. I learned numerous lessons, but one of the most important was the necessity of embracing the digital revolution and searching for new tools to save time and money. For a small business like mine, technology increasingly takes a central role—and that’s a positive thing, because every dollar counts.
This article originally appeared in Bloomberg Tax.
Sabrina James is a Melio user and the owner of virtual accounting firm AccounTAXstic.