In our many years of cooperating with accounting firms and assisting their clients in delivering ERP projects, we have discovered that many companies recognize the value of outsourcing accounting services- especially in the early stages of their business operations. They aim to devote their resources and valuable energy to the development and operation of their main business. As opposed to setting up an accounting department by themselves. They recognize that professional accounting firms can provide them with more seasoned and efficient daily accounting services.
At the same time, these companies also attach great importance to the management of daily business data. They recognize the need to use a complete ERP system to manage their daily orders, inventory, receipts, payments data, and so on. Business data managed through Excel tends to bring about more trouble in the long run.
In this case, the customer has two simultaneous requirements. One is the outsourcing of accounting services, the other is the ERP system application. These two needs are inevitably connected. A client of ours joked that they currently have two suppliers, “one is you and the other is our outsourcing accounting firm”. For customers, the best course of action would be for them to find a supplier to provide these two services. In this way, they won’t need to spend more energy to procure and evaluate two suppliers.
Therefore, the combination of accounting services and ERP system applications has pivotal value and is favoured by customers.
Let’s first analyze the value that this combined service brings to clients and firms.
Value to customers
1. Reduces the risk and cost of choosing a supplier
In many cases, customers first need to find an outsourcing accounting services firm to help them establish a company and set up its financial accounts. After they have developed trust in this outsourcing accounting firm, they will undoubtedly give priority to the service providers recommended by this firm. Learning that this accounting firm can also provide ERP system application services, would be a bonus. This will reduce their choices and assess the supplier’s risk. The ERP system service providers selected by accounting firms are usually companies that have been assessed by the firms and have previously collaborated on many projects. In this way, the service quality of ERP system service providers will be relatively safer.
2. Financial and business data synergy
The client and the outsourced accounting firm are using the same system at the same time. The customer enters the daily order transaction data in the business system. The corresponding journal entries are automatically generated when the transaction data is reviewed. The accuracy and timeliness of business data and automatically generated journal entries are higher than those entered by accountants. Since customers are more familiar with business data.
Outsourcing finance only needs to enter the corresponding financial data in the financial module every month. This includes bank receipts, payments, bank reconciliation and the required manual inputs. Allowing for quick and efficient, complete generation of monthly financial statements and bookkeeping.
In this case, if customers need to access some accounting-related data, they can also look it up directly in the same system in a timely manner. This would save on the communication costs, that would have been incurred from communicating with the outsourcing accounting firm, through email or telephone.
3. Less system training costs
Since the finance staff of the accounting firm is already well versed with this system, when the customer implements it online:
- There is no need for repeated training for the accountants. Which reduces the implementation cost of the project.
- They can also reversely find errors in customer data entry, explain and correct them in a timely manner. Which increases the accuracy of the system data.
Accurate business data can provide customers with a more reliable basis for decision-making.
Just imagine, if the finance staff are not familiar with the ERP system used by the customer. They will not be able to find the customer’s business data entry problems and make necessary suggestions for modification.
Value to the firm
1. Expands the scope of services and increase the chances of ordering
Firms that can provide a nexus of both accounting services and ERP system application services are more attractive to customers, in contrast to firms that can solely provide accounting services. This is because these two needs of customers, ineluctably go hand in hand and exist at the same time. Customers prefer a supplier that can help them deal with these two needs concurrently. This would greatly reduce the time that would have been consumed in looking for suppliers. Otherwise, the customer will have to engage in three-party communications, which imposes the need to communicate with the outsourcing finance, and with the ERP service provider.
2. Improves accounting efficiency and data accuracy
The system is used in collaboration with the customers, so customers directly enter business data and automatically generate invoices. The accuracy and timeliness of this data are higher than that of financial data based on the relevant materials sent by customers. We previously encountered a situation whereby. Customers often missed some materials for the accounting firm. When they found out, it had been several months later. At this time, the client found that the financial statements provided by the firm did not match the statistical data of their manual EXL table, and then took time to check and asked the firm to modify it.
In addition, sometimes the accounting information sent by the customer does not fully reflect an accurate status of the business. This makes it difficult for accountants to accurately determine the real stature of the business and make accurate journal entries. For example, whether it is necessary to estimate temporarily, or whether an invoice for advance payment. However, the business data entered through the ERP system will automatically generate accurate journal entries according to the corresponding business scenarios.
3. Provides customers with advanced management consulting services and provides reliable basic data
Many accounting firms provide advanced accounting consulting services while providing basic accounting services. If you are using the same system as your customers, accountants can easily use the business data in the system to make assessments of the operation of the company. Allowing for more accurate and sound accounting consulting services provided to customers.
The financial analysis reports provided based on this business system data will make customers feel more confident.
4. Increase customer stickiness
A firm that provides both ERP system services and accounting services, will have higher customer stickiness and irreplaceability. Unlike a firm that provides bookkeeping and accounting services solely, those who sync with clients using an ERP system benefit from understanding clients’ businesses much better, so have better chances of providing value-added services more accurately. The level of quality is highly welcomed by serious businesses.
Introduction of INNO
We are a supplier specializing in the efficient delivery of ERP systems for small and medium-sized enterprises. We provide and deliver ERP systems suitable for clients to our partner accounting firms and end customers.
In addition to the local Kingdee software, we have introduced a simple and easy-to-use ERP system from Australia called DEAR Inventory. The most substantial features of this system are:
- Easy to use
- Low cost of learning
- Short on-line cycle
- Chinese and English bilingual function
- Cloud deployment
This has brought prerequisites for the firm’s finances to use this system proficiently. Just imagine, if a client chooses to use a complex ERP system to manage daily business activities including accounting, how much extra work it will create for accounting firms to learn the system and get to the proficiency.
Author: Jano Tse – the founder of INNO
Jano Tse has 12 years of experience in implementing ERP systems for foreign and local companies. He also specializes in the accounting processes in China’s business environment. Jano’s passion for disciplined delivery and methods for meeting goals on time and under budget is exactly what INNO brings to each of the clients.