When Paul Donno started out as a trainee management accountant in 1985, and the World Wide Web was still a twinkle in inventor Tim Berners-Lee’s eye, he could not have imagined he would one day be winning awards for his innovation in digital accounting.
Fast-forward to 2017 and Donno has achieved acclaim for being one of the most forward-thinking accountants in the UK, and one of the first to take his company, 1AccountsOnline, fully online.
Donno has become such an evangelist for cloud accounting that he is recognised by the Sage software group as a ‘thought leader’ on the subject, and has travelled the world from Dublin to Barcelona and New Orleans to convince others to jump on board.
He was recently highly commended in front of 300 delegates at the AAT professional member awards at the June Annual Conference in Windsor, for his ability to adapt to technology changes by operating his accounting firm completely digitally.
Donno says he is driven by the belief that there is no turning back from the dawn of digital accounting and that professional accountants need to either get up to speed with it or risk being left behind.
He sees his role as not only running his own firm and helping clients to maximise the benefits of doing their accounts online, but also to help his peers understand the merits of fully grasping the future of accounting and the dangers of not doing so.
“Conducting business in the 21st century demands immediacy,” he once said. “Clients expect relevant and accurate information to be available in one click.”
In an interview Donno explained firstly why his modern business strategy is a no-brainer for clients, especially as the British government prepares to roll out its Making Tax Digital initiative, requiring small businesses to keep digital records and send HMRC quarterly updates.
“It’s without doubt much better. We’ve got instant access to their data and support is a lot quicker,” he said of the customer who join up with 1AccountsOnline.
Digital accounting offered huge advantages to consultants, for whom raising invoices was often a chore, he argued.
“You can raise your invoice from your iPad or your smartphone, track the changes, the invoices, record the payments, connect to your bank account with bank feed,” he said.
“The ease of use, anywhere around the world, is so much more than the old desktop software.”
Working in the Cloud also makes it easier to work together with your accountant, he explained.
“Your accountant and anyone else that you want to involve in your business have access to your data if you grant it. Collaboration is a big thing.”
A popular practice at Donno’s business is the abolition of timesheets.
“[Customers] know exactly where they are. We haven’t had any disputes over fees. If a client doesn’t want to pay for a fee we don’t do the work, rather than doing the work and then disputing, it’s all done beforehand,” he explained.
Donno ran a traditional accounting practice for about 18 years, before merging with another company and then realising the wisdom of going completely online to embrace the modern era.
He founded 1AccountsOnline and quickly discovered it was the recipe for a successful business model. His company has grown from two employees to five since last year, and is now looking to recruit another apprentice.
Donno attributes the rapid growth to “strong marketing and the fact that we will only do digital.”
He now urges fellow accountants to accept inevitable change and take similar steps to ensure the future success of their business.
“They’ve got to embrace the software, and they’ve got to stop fighting it in my opinion. There are too many out there who are fighting the Make Tax Digital campaign and saying how bad it is. But in my opinion it’s a good thing, they need to embrace it,” cautioned Donno.
“I think that there’s a lot of businesses out there, smaller ones and even slightly larger ones that don’t know where they stand in terms of their profit or cash flow until they’ve given their accounts to their accountant,” he explained.
“Doing the accounts online regularly, submitting to the inland revenue every quarter, as is proposed at the moment, forces them to be accountable and hopefully understand their business more.”
Going digital helped companies to get a grip on their cashflow by having all of the information in front of them rather than being unsure about whether somebody owed them money or they were making a profit.
“They can hopefully start budgeting for their tax bill and it’s not a surprise when they get their accounts done at the last minute and finally get a big tax bill that they can’t afford. There are many many positives,” said Donno.
Clients of “all ages” had welcomed digital accounting, he said, adding: “I don’t think age is a barrier, it’s more fear.”
He believes that accountants should be leading the way and helping their clients to negotiate the digital revolution, rather than resisting, as many currently are.
“Making Tax Digital is going to make people have to go online or at least find someone who will help them go online in the next couple of years, so it’s not going to be a choice thing really,” he warned.
“People don’t like change,” he said, but added that practices who did not enter the digital age would have difficulty developing their businesses in the future.
“At some point they need to draw a line under what they’ve got…then only take on new clients who are going to do online accounting because I do personally believe that especially the smaller practices will struggle big time if they don’t adopt online accounting,” he predicted.
Donno’s top tip for accountants thinking of making the leap is simply to “understand the software.”
“It’s easy for me to say because I’ve done it now for three and half, four years, but don’t look back.”
Nicola Smith has spent a decade reporting for The Sunday Times on both the European Union and South Asia.