A veteran of the Dutch on-premise ERP software company Baan (and later CODA), Kwakernaat set up Twinfield 10 years ago when Cloud accounting was still a laughable novelty for most UK accountants.

But things are different in the Netherlands. Blessed with a much more comprehensive and reliable broadband network, Dutch citizens and business people have enthusiastically taken to the Cloud. Twinfield already has more than 6,000 customers and is the default back-end system for accounting firms including KPMG Netherlands and BDO.

“I’m so surprised about the reactions of people [in the UK]. They look at iXBRL as an end result but don’t realise the whole A-Z stuff,” Kwakernaat said. “They only take the document and see how they can file with HMRC. That’s it.” Instead, he argues, practitioners should seize the opportunity presented by the introduction of iXBRL to change the way they work with clients. “It’s happening in Holland,” he said, and is being driven by banks rather than the government.

“Banks are the motor for online accountancy, because they want you to do your banking online. And if you pay online, it’s on the account in the next second. Then we integrate the banking with accounting, so it goes into your ledgers immediately.” ING Bank, for example, is promising that if you send in a set of accounts to accompany a bank loan in XBRL, it will be willing to authorise an immediate loan of €500,000- €1m. The electronic file allows the bank to run the figures automatically through more than 7,000 risk assessment questions required under the Basel II lending protocols.

The UK profession isn’t faced with these pressures yet, and because clients are still paying what the accountants are asking them to, there is no need for accountants to change, said Kwakernaat: “If customers are not complaining they will bill more next year and nobody will change. No pain, no change.” Twinfield’s strategy to output an iXBRL file containing the clients’ statutory final accounts runs the risk of alienating practitioners who see it as a threat to the services they provide. But Kwakernaat is unperturbed. “No - people still want to have an accountant to protect them from HMRC,” he said.

Returning to the pressures that will force the UK profession to change its habits, he continued: “Look at social media to see how fast things are happening. Wake up! “If you do shoebox acting, you throw everything in a box for a year, so it’ll be a year before your tax and annual reports are ready. In Holland, we call these ‘coma companies’. They’re almost dead until their accounts are processed. If their accounts are done in the year, accountants and tax advisers can do so much more.”

Kwakernaat says he started Twinfield because he was convinced everything would go via the internet. Mobile devices are moving the game on another step. “Now we are doing things on mobile devices. If you are a service company, it’s about hours and expenses. The iPhone connects to accounts and finance just has to check. You can do accounts, timesheets, expenses and mileages electronically. All that has to be done is enter sales invoice - so the whole process is there. You can make life easier and more efficient for the accountant, so they can do fewer bookkeeping hours (below cost) to get the extra work.

New firms in the Netherlands have come on stream that offer what Kwakernaat calls a “cafeteria” approach to billing. As new clients join a firm, they just have to complete an online form detailing the number of employees they have and number of sales and purchase invoices they are likely to raise to generate the fee. “What do you want and what do we do for your money? These guys are growing very quickly,” he said. “Pricing will be a big issue in the next year. Clients will have more guts and ask more difficult questions,” Kwakernaat argues. An accountancy firm is just a production line, leading from the shoebox to the annual report and tax return. The arrival of new technology is going to force UK practices to change their production lines, he added. “We can prove it, because Deloitte and BDO have standardised on Twinfield in the Netherlands and [UK firm] Goodman came across and are changing.”

Andre Kwakernaat spoke to AccountingWEB.co.uk after participating in an online chat iXBRL - beyond the deadline that examined how online accounting could streamline the production of iXBRL accounts.

Original text/source: Accountingweb.co.uk