Digital accountancy -
state of the nation

Leading CEO’s share with Digital Accountancy magazine their views on all matters digital!

We recently spent some time in the company of some of the key people in the UK digital forecasting and reporting arena.

They are all highly talented and experienced people when it comes to digital accountancy and all have significant experience within the areas of forecasting and reporting.

They gave us their thoughts and views on the introduction and uses of forecasting and reporting for clients, how accountants can make changes and move into advisory and provided their insights into the industry as a whole.

It was a really interesting discussion with some very useful tips for all accountants at whatever stage they are at on their digital journey.

Hannah Dawson
CEO, Futrli

Andrew Jordon
Director, Fathom

Caroline Plumb
CEO and Founder, Fluidly

Colin Hewitt
CEO and Co Founder, Float

How should you introduce forecasting and reporting to a current client as a new service?

HANNAH - Simply by finding out what they really want! Discover what your clients’ needs and wants actually are. Forecasts and reports should act as a sat nav. It therefore makes sense that, in order to provide value, you need to program them to suit the journey your customer wants to take.

ANDREW – I think you need a strategy to match your portfolio and ideal service aims.  There is not a one size fits all firms approach.

An example of a business advisory process that has worked well for others would be firstly, segment your portfolio into those who are large enough to pay and to whom you can add value through this service; secondly provide an example teaser Fathom report with their statutory accounts. Yes, this is a small sunk cost you may not recover, but it differentiates your firm’s offering and uncovers those clients who may never ask you for the service otherwise.

With Fathom, it is an easy 6-step setup to add a client to the platform either via Excel from the account prep software or directly via Xero or Quickbooks Online.  You can then use a template Fathom report to focus on a few Key Performance Indicators (KPIs). One tip would be don’t overwhelm clients with too many KPIs and instead provide a short-tailored report on cash, working capital cycles and profitability.  

COLIN - A lot of progressive accounting firms are introducing cash flow forecasting and reporting to save themselves time, improve their services and generate additional revenue. However, there’s no one-size-fits-all solution for doing so. Every firm is different, so is every client.

Firms must decide what’s best for them. Some roll out cash flow forecasting to their entire user base. Others only for clients that meet a set of specific criteria, for example all Xero users or all start-ups. Of course, the simplest option is to charge per individual licence for all clients who want it, but that can mean leaving money on the table. We’ve seen a lot of success when firms introduce cash flow to attract clients to a higher tier of accounting services, or when creating a bolt-on cash flow forecasting service. Firms often bundle Float with other key applications like Receipt Bank and Chaser as part of a digital ecosystem of accounting apps.

Who are the target clients for forecasting and reporting?

CAROLINE - Who isn’t? I've yet to meet a business owner who doesn't wonder what their bank balance will be after salaries have been paid, if they can afford to take a dividend or if they can invest in new equipment. 

Intelligent cashflow forecasting is about seeing ahead, so you can spot opportunities and threats. It all comes down to control, certainty and confidence around cashflow, which are critical, as they go hand in hand with business decision-making.  

COLIN - I want to set the record straight; cash flow forecasting is for everyone. It isn’t only for cash-strapped businesses or start-ups. It is for every business of every size.

That being said, there are some businesses to whom the benefits of cash flow forecasting are going to be more immediately apparent. Businesses struggling to keep a forecast in their head or on a spreadsheet (usually companies with four or more employees) are obvious candidates for cash flow tools. Likewise, businesses that have embraced services like Xero and QuickBooks and do their bank reconciliation monthly or weekly, are more likely to get more value from cash flow forecasting.

It’s usually easier to sell the benefits of cash flow to businesses that are planning for the future,

have a specific business challenge or can expect a lot of financial uncertainty. It may be an organisation in the process of hiring new staff or opening new offices who need to understand the financial impact of these events. This can also include start-ups facing a potential cash shortage, seasonal/project businesses with a lumpy cash flow, businesses paying off debts or those with high up-front costs needing to map out payment terms.

HANNAH - Everyone. Historically, it’s been too complicated and time-consuming but no client wants to run blind. It needs to be automated - pulling in invoices, bills, tax, with AI doing the difficult bits like seasonality. Then it’s a simple check-in. “We thought this would happen, but something’s changed. Want to take a look?”

ANDREW - Micro businesses who need to give a lot of energy to whether they can pay suppliers or employees in the next few weeks or months can really benefit from a short-term cashflow solution like Float or Fluidly.  

It tends to be slightly larger businesses, probably above £150,000 revenue who are more interested in service lines that include a management reporting element.

What do you consider to be the top 3 factors a firm should consider when implementing forecasting and reporting?

HANNAH - First, remove size from the equation. Small businesses might need complex scenario-modelling and large clients might not need a board-pack!

Two, remember not every client likes numbers - communicate in a language they understand.

Finally, and most importantly, remember that your clients just want to know they’re okay - that alone makes a huge difference.

ANDREW – Firstly, you need to decide if you are going to offer a highly bespoke forecast and reporting service. In some cases, the use of the forecast or report will dictate this, for example, if it will be used for fundraising purposes. 

If it is bespoke, your price point should then reflect that. For scalability of service, it needs to be ‘productised’ meaning you need a repeatable process that uses technology and benefits from using template reports in Fathom.

Next you need to ascertain if the client will pay for this service. Some clients won’t pay for this high value service so don’t target them.

Finally, do you have the data? Sounds silly but if you are not confident in the books being correct, you need to address that first. Bad data does not make for good reporting.

CAROLINE - If you haven’t already moved your accounting processes to the cloud, start there. Shifting to cloud accounting software is the basic first step before making use of a forecasting tool.


The same goes for clients. Get them hooked up to a reliable cloud accounting tool, so you can work together more seamlessly, access their accounts anywhere and implement other software add-ons. 

Once the first two are in order, the next priority is clean, accurate financial data. With cashflow forecasting, it’s far easier to work with businesses with regularly reconciled accounts.

What do you think firms do well at the moment within the forecasting and reporting arena?

CAROLINE - Progressive accounting firms, like creative industries specialists Raedan, do a brilliant job of communicating how the different tools they offer all feed into each other. 

Take receipt capture software, which lays the groundwork for other tools by ensuring uniform, standardised data coming into a general ledger. It fits together with other applications like a layered pyramid, by supporting the software that sits above it. If you can package this interplay back to clients in an accessible way, it’s very compelling. 

HANNAH - Some firms are excellent at putting their clients first. They know that each team within a business will have different needs, that priorities can change frequently and without prior notice. It’s important for a firm to keep up to date with those needs, in order to keep providing consistent value.

COLIN - There are firms that prioritise cash flow forecasting and reporting and they get the maximum benefits from services like Float. These power users are usually the firms that prioritise advisory, are willing to embrace technology and have the know-how to create a suite of digital tools to service higher tier clients. This is great for adding value, increasing conversion to higher tiers and reducing churn.

Progressive firms that adopt this kind of approach to digital services have made themselves truly indispensable to clients.

What do you think firms do badly at the moment when it comes to forecasting and reporting?

ANDREW – The upsell.  Many firms fundamentally undervalue the value of reporting and forecasting to an SME.   This service can keep an SME in business and allows them to grow. If a firm doesn’t believe in the value of their service then the client definitely will not.

HANNAH - Unintentionally, advisory has been pushed down a certain path and there are a huge portion of clients where the resulting services do not suit. To provide the greatest value for your client, services should be bespoke and realistic for you both time and resource wise. A tall order, but something that the tech solutions, such as the Futrli Platform, intend to solve.

COLIN – I think it took a while for firms to see cash flow forecasting and reporting as a ‘must have’ rather than a ‘nice to have’ and this is happening now in earnest.

Some firms were way too slow to adopt digital services and it means that they are not as skilled in these areas as they should be and so are lagging behind early tech adopters. Likewise, you have some firms that are paying lip service to cash flow because they feel like they have to but they don’t necessarily have the skills they need to help their clients get the most value from forecasting.

How do you see the future of compliance and advisory work for accountancy firms?

ANDREW - In spring 2019, I went back to my old firm, BDO in London.  When I was there our average tax return fee was around £3,500 now clients are expecting to pay £1,500.

What does that mean? Well, when a service is a commodity, of which basic compliance is, it is very hard to differentiate your service.  So a big factor of competition is based on price (not to mention the increased globalisation of the industry with more and more accounting firms to compete with!).  Advisory is different though because value comes from a business being successful whether it be restructuring, debt management or resource allocation. You have a whole raft of ways to compete other than just on price.

CAROLINE - We see the market moving beyond ‘what’ is going to happen in the future, to answering the more valuable questions of ‘so what?’ and ‘now what?’.  

Up until now, cashflow solutions have forecasted based on assumptions, rather than learning from historical data. With Fluidly, we’re building an intelligence layer that automatically informs business owners about what they should actually do about a specific cash issue. 

At the heart of all this is empowering business owners to unlock their financial data, so they can monitor their cash in a smarter, more pre-emptive way.

COLIN - Cloud accounting is making it easier than ever for a client to switch firms, in the same way that it’s easier than ever to swap banks or mobile providers. As such, the ones that really thrive will be those that offer their clients everything they need and inspire their clients to run a better business as a consequence of their financial advice.

With this in mind, I’m seeing a new kind of firm emerging. Firms that start with the client workflow and puts itself at the heart of the client’s relationship with money, not just end of year tax. This includes compliance and advisory.

I think we’ll see more firms assign members of staff whose sole job is to understand where clients are having challenges in relation to their client workflow, be it employee expense reporting or budgeting and forecasting. This is a very different role than most firms currently have and these employees should be extremely proactive in offering advice and support.

What advice would you give a firm today?

CAROLINE - Just get started. It’s easy to dip your toe in the water, so get out there and find a software partner who provides support that goes beyond the tool itself.

The leading cloud accounting tools have their own app marketplaces where you can find the tools to fit your requirements. With a tool like Fluidly, there’s no lengthy set up – you can get going pretty much straight away. 

HANNAH - Evolve. How it’s been done in the past, is not necessarily the best way to do it. As we move into the next decade, more entrepreneurs are Millennials and Gen Z. They won’t want PDFs. They want user-friendly, visual data they can access anywhere, anytime. Differentiate now and get ahead of the curve.

ANDREW - Challenge your junior staff.  Young training accountants often have great software skills and they will bring fresh ideas to process and service offerings.  Not only that, they often want to get more involved with business performance.

COLIN - I’m a huge fan of two-way feedback, and I think its introduction would make a big difference to a lot of firms.  

If accountants don’t check in with existing clients often enough, they will leave. It’s as simple as that. The most successful accountants are those that have a two-way relationship and understand what clients honestly think of their services.

Yes, interviewing customers about price and service is time-consuming and yes it can be painful. However, it’s incredibly valuable. There’s a reason that customer appraisals are commonplace in digital marketing and advertising agencies and they should be standard practice in accounting too. If they don’t do it already, all firms should create a list of assumptions and interview 20-30 of their best clients to get a qualitative sense of whether they are accurate. If a firm is unwilling to ask directly about pricing, an alternative is to trial different pricing options with new customers to explore the impact. This can be a lot less scary than a frank conversation, but it still offers the level of feedback required.

What changes would you like to see in the industry?

HANNAH - I’d love to see a shift towards more client-centric offerings - the better we serve businesses, the better their shot at success. Paired with the aim to empower firms to deliver this. You don’t have endless time and resources, which is why we’ve built our new product range, Futrli Platform, to be completely hands-off.

ANDREW - For clients to understand the value in an accountant as an advisor rather than an accounts filler or tax return submitter.  The result of this will be greater success for SMEs and higher job satisfaction for accountants.

COLIN - Regular bookkeeping needs to become standard practice. It would do wonders for the industry and have a huge knock-on effect on other areas of accounting if more firms did this daily. Likewise, monthly cash flow forecast reports should become a staple of management reports. We’re seeing this starting to happen more and more, but it’s still far from being standard practice. 

However, the biggest change I would like to see is the introduction of more transparent pricing for services. There’s nothing worse than getting an unexpected bill, and I think some old school accounting firms are still guilty of this.  

CAROLINE - I’d love to see more tech providers not just selling bundles of licences but working to support accountants themselves.

Software companies like Xero, QuickBooks and Sage have set a great precedent, by providing a great deal of support to both small businesses and accountants. We should all take a leaf out of their book and do what we can to contribute to the ecosystem more broadly.

What is the most frustrating factor about the industry at the moment?

ANDREW - The value-action gap.  I spent my summer interviewing 50 UK firms about their biggest pain point with offering advisory services.  All 50 out of 50 firms identified they wanted to deliver more business advisory services. Yet when it gets down to the nitty gritty partners and owners will often be focussed on more myopic recoverability than creating time to explore new higher value service offerings.

COLIN - It’s frustrating to see firms doing advisory work for free and not communicating the value they are bringing to their clients. A lot of clients would be happy to pay more money if they could see the work that was really going on.

Also having a clear pricing automated solution like Practice Ignition or Go Proposal would allow firms to offer value add services like forecasting and reporting for a clear price and prioritise it in the firm for the value that it brings. 

HANNAH - Businesses are frequently pigeonholed. Just because a client doesn’t want a PDF report doesn’t mean they don’t want an accounting package. Every business needs those services. They just need the information in a language they understand. Some of us are number-blind and we need to better cater for that.

Why should a firm use your app for advisory?

CAROLINE - Fluidly offers a totally different approach – a new way of looking at cashflow, that can really bolster the advice you give clients. We view cashflow as a whole, lifting it out of the fixed, static world of Excel spreadsheets. Fluidly works like an autopilot - continuously monitoring, optimising and providing alerts to what’s coming ahead. 

We help partners save an enormous amount of time, get deeper insights into clients’ businesses and grow their accounting practice sustainably. We also provide extra services designed to help accountants roll out cashflow advice, like dedicated account management, client insights, marketing support and more.

HANNAH - Our platforms complement each other to provide a full-firm offering. Futrli Platform is your start point, translating data into simple to-do lists. Let your clients know they’re okay. Educate them on their business. Educated clients ask more questions and soon they will want more complex services with Futrli Advisor - complex reporting, forecasting, scenario-modelling, KPI dashboards.

ANDREW - Fathom has a quick client setup and is known as being a market leader in the flexibility and visualisations available within its reporting offering. More than that, the platform is designed for accountants.  We know the real value is having experts on hand to help with the setup but also service delivery.  

We have our UK support team of six based in Cambridge with phone support.  Our Head of Training & Implementation, Antoni, is there to assist you with getting up and running when you are short on time and his team also offers our popular in-person Training & Implementation Day.

COLIN - Offering a meaningful cash flow service can help set firms apart from the competition and enable them to create a valuable new stream of revenue. Having cash flow information at their fingertips enables accountants to proactively work with clients to plan for the future. If clients are planning for next quarter, next year or beyond, they need to know how those plans impact their cash position over time. Float is a platform that allows these advisory conversations to be had. In making forecasting simpler, and more understandable for clients, it bridges the gap between the need of the business owner and the knowledge of the accountant. 

Often with a cash flow forecast built in a spreadsheet, the cost of you updating it manually makes it feel like an expensive luxury for clients. Float’s automatic updates mean users no longer have to spend hours building a cash flow or keeping it up to date, thus making it far more affordable for clients.

We use the direct method of forecasting which involves looking at all upcoming bills and invoices, as well as historical actuals to forecast exactly when cash will move in and out of a business. This type of forecast is best for frequent, operational use to understand whether your client can afford to pay staff or bills, or what might happen if payments are delayed. It’s easier to understand and a more effective way of sharing financial information with clients.

With an increased level of detail, it’s possible to confidently make decisions in the short-to-midterm. Due to its accuracy, it is the FASB and IASB’s preferred method of forecasting.

Our scenarios feature is also extremely popular with firms, helping them model different hypothetical situations for their clients to help them make better business decisions.