The Benefits of Using an Online Accountant
Updated: Feb 7
Xtract Accounting, the small business Accountants for Directors and Limited Companies, explains what an Online Accountant does, how they work, and how they can benefit your small business.
Online Accountants have become increasingly popular over the past few years, particularly as more and more small businesses adapt to the new digital age of accounting and finance solutions and processes.
As you would expect, the volume of Online Accountancy practices has increased too, and with that has come a remarkable change in the services being offered to clients, as well as the overall client/accountant relationship.
In this blog, we explain how using an Online Accountant, such as Xtract Accounting, can benefit small businesses, and why switching to an Online Accountant, especially in these ongoing uncertain times, might actually be the best decision you’ll ever make.
What is Online Accounting?
Firstly, let’s start by explaining the term Online Accounting, also known as Cloud Accounting.
This refers to the practice of managing your business accounts and finances online using Cloud Accounting Software. This software is accessed through an internet connection (hence the term ‘Cloud’), meaning there is no programme to install or maintain on your own computer systems.
What is an Online Accountant?
An Online Accountant, such as Xtract Accounting, can remotely access your business records on the Cloud Accounting Software, and use your real-time financial figures to provide insightful and proactive advice as well as support at an instant.
Often, a Cloud Accountant can provide their clients with free access to Cloud Accounting packages, thereby increasing the cost effectiveness of the Online Accountant.
Here at Xtract Accounting, we have partnered with the UK’s best Small Business Cloud Accounting Software provider, FreeAgent, and are proud to be able to provide their easy-to-use accounting solution free of additional charge to clients who join our proactive and fixed fee Monthly 'FD' service.
How does an Online Accountant work?
To understand how an Online Accountant works, we must first understand how a traditional high street accountant works.
The chances are that you will only ever meet your traditional high street accountant once or twice a year… Firstly, to drop off your yearend accounting records at their offices, and maybe a second time to collect them again once your accounts have been completed and signed off. It’s usually the same service offering and process year in, year out.
You will also be aware that any additional meetings or telephone calls may cost you extra in hourly fees, so you may be reluctant to ask for support when you need it.
Then of course there is the annual accounts bill… It always comes as a shock, doesn’t it? And at the worst possible time for cashflow too!
And you know that small paragraph or two of text in your yearend accounts letter, the bit they like to call “Tax Advice” … Ask yourself, how much is that really costing you?
Well, here’s the truth… a lot more than you think when you take into consideration you’re contributing to their office rent and business rates bill!
That’s not something you need to worry about with Online Accountants, such as Xtract Accounting – because we’re online, we don’t have costs such as office rent, or business rate bills. Lower costs for us means lower costs for you!
By using an Online Accountant, you will not receive the same personal service as you would expect from a traditional high street accountant – You will receive an exceptional personal service! More proactive, more insightful, more benefit to you and your business.
Instead of meeting your accountant in physical spaces and handing over paper files, you simple manage everything online and remotely. You have phone and email conversations, send files digitally and closely collaborate on your businesses financial health and development using Cloud Accounting Software.
Now we’re in the 2020’s, where everything a modern and growing business does is accessible via digital platforms, and in consideration of the on-going Coronavirus pandemic, working with an Online Accountant just makes perfect sense. When you can do everything online, and achieve so much more by doing so, why wouldn’t you?
In summary, what are the key benefits of using an Online Accountant?
Smaller overheads for the accountant mean reduced costs for the client. Not only that, but an Online Accountant will be more efficiency conscious, investing its time and money in software and assets that will increase efficiency for both itself and their clients, again driving down costs for both.
Increased value for money
Online Accountants can also provide increased value for money through their proactive services and instant support, the majority of which will be included as part of their service offering. Something which traditional accountants who provide annual services, simply cannot do.
Unlike with traditional high street accountants, Online Accountants are more inclined to provide fixed fee services.
Here at Xtract Accounting, we take that one step further and offer clients who join our Monthly 'FD' service the ability to pay their annual fees in fixed monthly instalments, thus providing cashflow reassurance.
There was once a time when the quality of a face-to-face accountant relationship was the reason why small business owners chose to work with traditional high street accountants. Not any longer!
Online Accountants provide a better quality of service through their instantly accessible online channels, like Chat, Skype, Teams and Zoom – something which has become crucial for small business owners since the arrival of the Coronavirus pandemic.
The trouble with local traditional accountants is limited choice of accountant and services. With Online Accountants, there are plenty doted all over the country, all offering varying services to suit your needs and requirements.
Enhanced workflow and productivity
When you’re running your own business, you know the administrative tasks needs to be done, but you also know there’s a long list of things you would rather be doing. That is exactly where Online Accountants can ease the pain!
By using the easy-to-use Cloud Accounting Software provided by your Online Accountant, you could reduce your administrative burden by taking advantage of the many time-saving features the software has to offer, for example automated invoicing and payment chasing, and bank feeds.
Less time spent on your accounts means more time to develop your business!
Informed business decisions
There is no worse a feeling than preparing for a meeting with the bank manager and realising your accounts are 13 months out of date… Good luck asking your traditional accountant for help, because they won’t… not for a significant fee anyway!
Thankfully, this wouldn’t be a problem when collaborating with an Online Accountant, as they will be proactive in helping you to keep your accounts and tax organised, accurate and up-to-date.
Need to know whether your business can afford to buy a new van or perhaps you’re wondering whether you could bulk buy stock of a popular toy ready for the Christmas rush? Not a problem… a quick review of your real-time business financials, and your Online Accountant will have the answer for you.
Reduced tax bills
Get yourself a proactive Online Accountant, and your almost guaranteed to reduce your personal and business tax bills.
That is because, unlike traditional accountants, the proactive nature of Online Accountants means that they are regularly reviewing your live accounts data to ensure that it is accurate and that all available tax reliefs are being claimed. If they spot an opportunity to save you tax, they have the potential to inform you about it there and then.
Traditional accountants on the other hand, will often provide their tax advice annually and only once they have completed your yearend accounts… by which time it is too late to act upon it!
Just think about that for a second… how much tax do you think your accountant has cost you?
What kind of businesses can benefit from Online Accounting?
Any… Ultimately it comes down to what your business goals are and whether they match the service offered by the Online Accountant.
Switch your Accounts to Xtract Accounting Today!
Here at Xtract Accounting, we work exclusively with Micro and SME Owner Managed Limited Companies based throughout the United Kingdom, specialising in helping Directors Xtract more out for the work they put in.
We understand that in today’s economy, small business owners find themselves working harder than ever just to survive. Unfortunately, that means that tasks such as the bookkeeping, or even paying yourself a salary, often get forgotten about.
That is why we created our proactive and fixed fee Monthly 'FD' service. We streamline your administrative tasks whilst also helping you to maximise your tax efficient profit extraction strategy.
About the Author of this Blog post…
Hi, my name is Gordon Roe and I am the Founder and Managing Director of Xtract Accounting. Having worked in an accountancy practice setting for well over a decade, I had become accustomed to the same annual routine for clients - Books in… Analyse… Queries out… Answers in… Finalise… Accounts and Tax Advice out.
Then, in 2020 I realised I could use advancements in technology and software to significantly improve the relationship between accountant and client, and at the same time, provide an insightful and real-time tax advice service. After all, that is what the modern client expects and deserves!
And so, Xtract Accounting was born…
Xtract Accounting are online accountants based in Lincolnshire, who offer proactive small business accountancy services exclusively to Directors and Owner Managed, Micro and SME Limited Companies throughout the UK.
We specialise in helping Directors Xtract more out for the work they put in!
Our monthly 'FD' service with fixed monthly fees, sees us take on the more proactive role of Finance Director for your business, and offers a plethora of benefits including:
Inclusive accounting software provided by FreeAgent,
Your very own dedicated accountant,
Regular insights into how to maximise your tax efficient (or even tax free!) income,
Jargon-free telephone and email support,
Plus, much, much more!
With Xtract Accounting, you can be sure your accounts and tax will be kept up-to-date and organised.
Find out more about us or connect with us on Social Media (below)