FinTech Payments

Data Hurdles Keep Accountants From Elevating Their Role

June 26, 2020 at 01:00PM

With more organizations embracing FinTech in the back office, businesses are increasingly aware of the importance of data integration between various portals. FinTech solution providers have moved quickly to fulfill that need, yet manual data entry, missing or inaccurate information, and other data-related pain points remain all too common.

This challenge exists for professionals across the back office, but in business accounting, the lack of data integration and accuracy mean finance experts are spending valuable time correcting information and moving numbers from one platform to another.

That simply won’t do for companies in today’s market climate, said Adrian Blair, CEO of digital accounting platform Receipt Bank.

“Accountants and bookkeepers are telling us demand for business advisory services has increased dramatically in the wake of the pandemic,” he recently told PYMNTS. “Small businesses in particular need cash flow forecasting, financial resiliency planning, advice on payment scheduling as well as consulting on applying for available government help. All of these things require reliable data in real time.”

Supporting an Accounting Shift

Well before the pandemic, however, the corporate and small business accounting community was in the midst of a massive industry shift away from number-crunching and toward providing the advisory services that businesses need so much today.

The B2B FinTech ecosystem has responded to that shift, too, in the form of automated tools that aim not to replace the job of the accountant outright, but to take care of highly manual and tedious tasks that allow accountants to spend more time on value-added services.

Yet, according to Blair, many accountants and bookkeepers continue to struggle with data problems that result from non-optimal integrations and data connections.

“You can see this when it comes to practical challenges like cash coding in Xero,” he said, offering the small business cloud accounting platform as one example. “When an existing invoice is reconciled in the bank using ‘Create Transaction,’ Xero creates a duplicate with both an unpaid invoice and a paid transaction for the same item, which can result in paying a supplier twice.”

Those are small data hiccups with the potential for damaging consequences. To tackle this challenge, Receipt Bank recently announced the acquisition of Xavier, a deal that will allow the accounting platform to wield the data aggregation and quality management technology offered by Xavier.

Announced earlier this month, the acquisition will target the 150,000 businesses that use both Receipt Bank and Xero to support data accuracy and a higher degree of quality within these platforms.

Financial Fitness

Today, the future of many small businesses remains uncertain, rendering accountants’ advisory services even more valuable.

For the accountant, that means data inaccuracies or other points of friction are not simply an inconvenience. For some of their SMB clients, it could mean the difference between survival and shutting the doors.

Data improvements can position the accountant to more quickly gain access to the critical performance metrics necessary to guide a company’s strategy going forward. For the finance professionals who have several clients, real-time access to accurate data also offers the ability to prioritize, connecting accountants to insights into which businesses need the most attention, Blair noted.

And the opportunities to expand accountants’ value-add to their organizational clients continues to grow. Blair pointed to open banking frameworks that support the drive toward access to data in real time, for example, meaning that accountants don’t have to rely on weeks- or months-old data to provide guidance. Open banking also enables small businesses to keep their existing bank relationships without sacrificing the opportunity to unlock the data their FIs hold.

With some businesses teetering on the edge of collapse, and others developing new strategies to endure market volatility, data will continue to play a central role in promoting financial well-being — and accountants will have an even bigger opportunity than before to elevate their role with business clients.

“When it comes to accounting, better data means better advice,” said Blair. “Getting the right data is essential. Ensuring the quality of that data is critical.”

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