Hiring an accountant is an important milestone for most small-business owners, a sign that the business is successful enough to require such expertise. It also leads to important steps in digital banking, such as when an accountant asks for access to financial data to prepare a report or a looming tax deadline forces a scramble. The stakes get higher when the accountant has critical tasks such as making outgoing payments.
A new report from Javelin Strategy & Research, How Accountants Shape Business Finances, and What Banks Can Do to Help, allows financial institutions to better understand their role in getting these financial professionals up to speed.
A Teachable Moment
For business owners who have never done this before, enrolling an outside accountant in the digital banking process can be extremely challenging.
“You don’t really know how much access you should be giving to somebody that maybe you haven’t been working with that long,” said Ian Benton, Senior Analyst in Digital Banking at Javelin and the author of the report. “You don’t what the standard guidelines are for a growing business of your type. At any online small-business forum, there are a ton of questions about: How do I delegate access here? What are the best practices? The banks aren’t providing a ton of guidance around this.”
It’s up to the banks and other financial institutions to help business owners understand their role. To properly participate in the process, the first step for the bank should be looking for certain activities that indicate a small business has brought on an accountant.
Setting Up Entitlements
One of the keys is entitlements, the detailed rules that determine what a sub-user can do within digital banking. This could include an administrative user who manages a small business, a couple of employees who are granted access to handle payments, or maybe an accountant who needs access to download certain things. Typically, the bank can set security settings with enough detail to identify each user. Then the account owner sets the limits of the outgoing payments each person is able to make or limits the accounts they can view and what they can do in each of them.
“People who are more comfortable navigating online and mobile banking will go into entitlements and figure it out themselves,” Benton said. “But that tends to be the minority. Most business owners are not the experts on things like that.”
The new accountant will likely be accessing the entitlements for the first time. The first time they go through that process, the bank can be more structured about it. It’s an opportunity for them to say, “Hey, are you doing accounting for the first time? Here’s what we recommend.”
Another transitional sign is when the business is running payroll for the first time or downloading financials. These often indicate that someone else is helping the owner out. Again, these provide contextual opportunities for the bank to say, “Would you like help onboarding an accountant?”
Don’t Over-Permission
Entitlements are typically set up only during onboarding, when the business first opens its account. Someone from the bank should keep an eye out for situations where a finance employee or bookkeeper needs to receive access.
“A lot of times a business will hire somebody and just give them full access, which is generally not appropriate,” Benton said. ”Don’t fall in the trap of over-permissioning just because it’s easier.”
Even an accountant probably does not want that level of access or the liability if something goes wrong.
“I would recommend that the owner work with the accountant, especially if they’re making payments on your behalf, to create systems that will keep things safe for you while giving you the oversight that you need,” Benton said. “The accountant probably knows better than you do.”
A Retention Moment
The bank does need to be careful here. If business owners get lost or confused, they could get frustrated enough to find a new bank that can meet their needs. There’s also the potential for fraud if the person presenting themselves as the accountant is not who they claim to be. This is an important step for banks and business owners, a true retention moment.
A bank can always put educational material on a public site, telling customers how they can do these tasks. But Benton recommends providing a template for entitlements. Whether someone is just doing tax prep, putting together a balance sheet at the end of the year, or executing regular payments, show them the exact things they need. There are certain profiles, like accountant or accounts payable employee or even CFO, for which the bank could have templates ready so neither the bank nor the customer has to go through and make adjustments.
Keeping the Process Secure
How can the business make sure the process is secure? First of all, establish that the person getting the access is legitimate because there can be a lot of fraud around these permissions. A growing business may be reaching out to an accountant for the first time. It may never have physically met or spoken with that person. Make sure to check their credentials and ensure they are who they say they are.
“Then build trust over time,” Benton said. “Maybe implement view-only access for only a few of the accounts that they need. They can download transaction lists, but keep it fairly close to the vest initially. Once you gain trust, you can move into payments and things like that.
“There are opportunities to make digital banking a shared experience for those types of folks. Let’s say you’ve brought on accounts payable staff, or other personnel like that. There are certain tools within digital banking that can help integrate them into those roles. It has the ability to do collaborative work across different users, to say, ‘OK, we’re going to analyze cash flow together, or we’re applying for a loan, so we need to get together all this information.’ We can do that collaboratively.”
