When it came to numbers interrogation the ‘numbers power’ used to rest with the Accountant. Unless the Accountant is involved with the client in implementing cloud accounting then the power will rest with the client.
The reason for that is the reports and data that comes out of cloud accounting systems are reports and data that Accountants used to provide to their clients for a fee. They are very powerful and tell a compelling story. In essence, software has taken away some revenue from Accountants.
If you just leave it to your clients own devices then you are missing out – big time. Do not let your client choose which application to use (just because their friend recommended it), get involved in the decision. Help them choose an application that suits their business needs. Some firms are considering aligning themselves to one provider only which is crazy. In an Accounting firm the ethical thing to do is help the client chose the application that suits them. That means you will end up having 3-4 primary applications in your client base.
Fast forward. You’ve worked with the client and picked a solution for them. After that some Accounting firms are basically saying ‘go for it’ to the client and letting the client do the data conversion from the current system. Business owners are not that interested in accounting! Do not let them do it on their own. Take it away from them and do it for them. Have a number of ‘product champions’ in your firm that know the products inside out and do it for the client. Charge your client for the conversion as well. At least you’ll know it’s done right – and the client has someone to blame if it is not!
Once you’ve implemented the new system train your client how to use it properly. How to enter data, link to point of sale software, scan invoices, send invoices, manage inventory / payroll & cash….accounting for non-Accountants. Maybe even run a workshop on this.
And don’t leave it there. The real power with cloud accounting is that you the Accountant now have access to clients financial data in real (close to) time. Which means if something is going wrong you can do something about it – before it’s too late. Instead of waiting 6, 12 or 18 months to get the data you can have access to it on any device, anytime anywhere.
To connect to all of your clients (no matter which cloud application they are on) use an application like our PANalytics dashboard below. This will consolidate your clients data into a ‘traffic light’ dashboard system and automatically push information to your device when things are going wrong or right. It will also give you advice, tips and hints as to what to do about what is happening in the client data.
To find out more on how to implement cloud accounting with your clients come to my upcoming seminar which is visiting 14 cities around Australia and New Zealand starting on March 17 & right into April. We’ll have independent speakers, vendors and Accountants who have already implemented cloud with their clients. The day is all about the ‘how to’. You’ll gain knowledge, skills, training, get your team engaged and understand which tools are available for you and your clients to use. Go to www.cloudseminar.com.au for booking dates and more information.
I was honored this week with the No. 1 position of best business blogs in Australia. Smart company did the review. You can check it out here.
The vast majority of Accounting firms operating systems are server based rather than ‘cloud’ based. This has not been an issue up until now because the vast majority of team members in a firm have been ‘office bound’ and any access to data was from the desktop in the office. Having everyone bound to a desk is very last century thinking. The world is flat and with cloud based operating systems you can have team members anywhere working real time with no synchronization or terminal server issues.
Take my business for example. My business is a professional services firm like yours. I have a regular office in Brisbane with 11 team members who live locally. On top of that myself and co-director, Colin, go into the office around 1-2 days per week only. The rest of the time we are ‘away’. I have a full time person Darwin, 1 in Vancouver, 3 (soon to be 7) in the Philippines and 1 in India. That’s 5 permanent locations. Both team members in Darwin and Vancouver were relocating from Brisbane and instead of having them leave the company (both are excellent at what they do) we set them up locally and they continued to their job form their new location.
All team members wherever they are only using 1 database, 1 accounting system, 1 project management system, 1 document management system, 1 document creation system and many other cloud based applications to help them to their job. All systems are linked together so we can see real time what is going on. No speed issues, no dropouts (unless the internet goes down) and improved productivity. The management team get an automatic KPI report every morning that is generated by the system. It just turns up and it shows the heartbeat of the business.
We have team meetings with each person on video on the big screen and other than touching them it is like they are with us in the same room. My cloud based system has been up and running for 2 full years and we could never ever go back to a server based system. The old system was just too restrictive for workflow, collaboration and overall efficiency. Remote people seamlessly working together is just one of the advantages. The biggest thing for me as the CEO is the access to management data no matter where I am.
For an Accounting firm the ideal cloud based ‘practice management system’ needs to be able to do the following as a minimum:
- Everything the current server based system does – tax, accounting etc except for 1 database only!
- Relevant KPI reporting – Revenue, Profit, WIP management, Debtors, cash balance, average hourly rate (AHR) all hours, AHR on job by job basis, productivity etc
- Pipeline management – not current workflow but sales pipeline / opportunity management
- Client relationship management – ability to know what clients are buying what services and the ability to create marketing campaigns to existing or prospective clients
- Run your firm based on best practice – no charge rates ($1 per hour), hours budgets on jobs not $ budgets, pricing up front etc. Link to your clients who are also on the cloud so you can have the heartbeat of your clients
The bonus ‘wish list’ items like document management, document creation, project collaboration can be sourced through other applications that do not require additional client databases to be created. To help you choose the right system for your firm, and to learn about what cloud solutions can and can’t do I am presenting a 1 day seminar with a range of speakers around in 14 locations in March & April this year. For more information and how to register go towww.cloudseminar.com.au.
If Accountants want to retain their ‘trusted adviser’ status then they need to be much more involved in their client affairs. They need to get closer to their clients and understand their clients’ financial affairs even more than before. Having deep ‘financial intimacy’ with a client is what needs to be achieved.
Having financial intimacy with a client includes which accounting software they use. No longer are clients going to a retail store and buying a boxed product for their accounting software. The vast majority are buying their software over the internet – not in a box. The software is internet or ‘cloud’ based. The estimate is that around 7% of current businesses use a cloud based accounting product. That number is growing dramatically every month.
Are your clients coming to you for advice which software application they should use or are they just using one recommended by their friends? Surely the Accountant who is ‘doing their books’ should be involved in that decision.
There are some Accountants who are heavily (some aggressively) promoting 1-2 cloud based products yet the majority are not. It is farcical to think that just one application suits every client you have or want. In any Accountants client base the right thing to do is have 2-4 primary applications throughout the client base.
The movement to cloud based applications is one that no one can stop. Social change says that people want the information on their device 24/7 and technology companies are building applications to suit that appetite.
I think you need to get on the front foot and aggressively promote this unique opportunity. That means running information sessions, seminars, webinars, having product champions; KPI’s on how many clients are on cloud and mentioning it in all promotional material.
The major benefit to the Accountant is having real time information where you can offer real time ‘value added’ advice. Instead of having financial intimacy after the fact (up to 18 months later) you can have real time data at your fingertips. By adding value to the data and deepening the financial intimacy the secondary benefit is that you will strengthen the relationship with your clients and keep the client for longer.
Unless you get ‘on the front foot’, promote cloud solutions and add value to the data then someone else will.
If you want to know the ‘nitty gritty’ detail of how you can capitalise on this unique opportunity then I am running a full day seminar in March & April (starting on March 17) this year on the topic. Check out www.cloudseminar.com.au for more information. Click here.
There is one word to describe the future of compliance….commoditized. With a repetitive task eventually systemization kicks in and after that commoditization. Once a product is commoditized then price pressure and new competition takes over. This is what is happening with statutory compliance for individuals and companies.
The reason is simple. Cloud accounting software. New technologies at the clients end makes it far more streamlined, accurate and thus efficient. The data received by the Accountant is more accurate and better quality. There are fewer errors to make at the client end due to the way cloud solutions work. With the data in better shape what that means is that there is less time needed at the Accountants end to finalise the work. The software applications also offer reporting that previously only the external Accountants would provide – such as consolidated executive summaries with key performance indicator variances, budgeting & cash flow analysis.
In the past 18 months I have seen new entrants (Accountants) who have a very low cost base and are offering 50% – 75% reduction on standard compliance work. I am also seeing a growing trend of Accountants setting up teams of people in other countries and offering book keeping & other accounting services for $10-$20 per hour.
The next phase will be when the cloud based systems will offer ‘one click lodgement’ to the government agencies. This will by-pass the Accountant all together for these functions.
The reason this is happening is social change and technology companies who are fighting to remain relevant. Social change says that people want to access information on their mobile device whenever or wherever they want – including accounting and other key business data. It is hard to do that if all the information is on a hard drive at the office!
Technology companies know this and they are either creating new applications that are internet based or they are migrating their current ‘hard drive’ products to be internet based. If they do not then they will go the way of the dinosaur.
Cloud accounting gives the power to the client in real time. Previously the external Accountant had the power.
As an Accountant you cannot stop this. Social change, technology companies and the government are creating this change. You can choose to ignore it or embrace it. Ignore at your peril I say. If you want to embrace it and capitalise on it then you need the right education and tools to help you do that. Starting on March 17 into April 2014 I am running a full day seminar (14 cities) on how you can capitalise on this big issue and amazing opportunity. Go here or more information.