FinTech Targets The Cash Flow Needs Of CPAs

The Certified Public Accountant (CPA) today now has a plethora of FinTech solutions they can use to manage their clients’ money, with the number of digital tools — including cloud accounting portals, cash flow forecasting solutions and intelligent technologies like artificial intelligence (AI) — continuing to rise.

However, there’s an area of B2B FinTech that appears to have left a gap in the market: While there are solutions for CPAs to better manage their clients’ funds, Dustin Hall, director of CPACharge at card processing company AffiniPay, says CPAs lack a seamless way to get paid from those customers.

In a way, while there are FinTech solutions for CPAs to offer more strategic financial services to their clients, the FinTech solutions designed for CPAs themselves are few and far between.

“We saw that a vast majority of payment solutions available to CPA and accounting firms today were broadly created for general use by businesses across virtually all industries,” Hall told PYMNTS in a recent interview. “These solutions create a disjointed, and sometimes ‘bloated’ experience for accounting professionals.”

How CPAs Are Paid — And How They Want To Be Paid

Accountants have particular needs when accepting payment from their clients, including specific data for reporting and compliance purposes. Also unique among CPAs and accounting firms is the need to offer gross deposits, meaning the processing fees are billed separately when CPAs are paid, for more precise accounting and reconciliation with their clients.

At the same time, he noted, accounting firms must adhere to the payment demands seen across industries, namely the need for businesses to accept payment online in an intuitive, user-friendly way.

That’s a requirement that doesn’t stop when a corporation or small business is making the payment, and according to Hall, SMBs and corporates can pose unusually large challenges to accounting firms: with larger firms, delayed payments are among the most significant pain points, he said, while with SMBs, that friction is linked to the variety of ways small companies want to pay their accountants.

Credit and debit cards, along with eChecks, are the most common ways businesses pay their accountants, Hall noted, though businesses’ payment preferences don’t always match an accounting firm’s.

“Businesses typically prefer to pay by credit card, as it gives them more flexibility, control over the transaction and sometimes points,” he said. “CPA firms typically prefer to use the payment method that incurs the lowest total fee.”

That’s traditionally been the paper check, with accountants embracing the eCheck to minimize payment acceptance fees, meet clients’ demand for online payment methods and streamline the collections process. Hall added that CPAs and accounting firms are increasingly accepting cards (and the fees they come with) to avoid the collections process and mitigate the risk of delayed or nonpayment.

Changing CPA Roles

The role of the corporate and small business accountant is changing.

As the number of FinTech solutions and automated, intelligence technologies continue to rise, so does the ability for a CPA and accounting firm to go from number-cruncher to strategic adviser. Moreover, despite fears that automated, cloud-based accounting solutions would eliminate the need for the human accountant, the industry is gradually realizing that these solutions can be a strategic asset, not a replacement, for the advisory services of the CPA.

This is increasingly true amid industry shifts like accounting standard changes, tax reform, and regulatory adjustments in areas like payroll. Experts expect these factors to disrupt corporates and SMBs, which will be looking toward their accountants for guidance.

“Private companies are starting to realize it’s not business as usual,” said Deloitte Private Enterprises Managing Partner Mark Davis in an interview with Accounting Today about the accounting standard changes last October.

According to Hall, the ability to accept electronic payments in a seamless, online fashion supports the ability for CPAs to step up to that elevated role for their business clients. Also, just as CPAs support their clients’ cash flow management needs, online payment acceptance is key to an accounting firm’s cash flow objectives.

Electronic payment acceptance means offering an experience that clients expect, which, Hall said, means “they’ve enabled their clients to pay more quickly and easily, which directly contributes to stronger cash flow.”