Lately there has been a lot of press and commentary (some would say hype) about cloud accounting systems.

So what is reality and what is hype?

First of all some facts:

  1. The cloud accounting (or the original term is SaaS – ‘software as a service’) has been around for a long time. The technology has been available for at least 10 years.
  2. Cloud accounting is where your (or your clients) data is stored on the internet (instead of a PC or server) so they can access it easily and efficiently.
  3. As of today there are approximately 3-4% of small / medium sized businesses who use an internet (cloud) based accounting system.
  4. The early adopters (the cool ones) have jumped on it and enjoy the simplicity and innovative approach to it.
  5. Many of the late majority users will be currently concerned about security issues. They are the same ones that were concerned about internet banking security concerns and now they probably use some form of internet banking.
  6. Every single accounting software maker (who started as a CD/Server/Hard drive system) are spending bongo bucks (technical term) to get ‘cloud ready’. In fact I know (from the horse’s mouth) that one prominent supplier is spending in the vicinity of $100M to get ready.
  7. Around the world there are gazillions of dollars being poured into any sort of internet based computing systems. The venture capitalists and financial markets are backing this space.
  8. Cloud accounting systems will not fix every issue you have with your clients ‘cleanliness of data’ – if they input incorrectly then you’ll get a mess like you do now. Muck in – muck out.
  9. It is reported by the software vendors that at the accountants end you will have an efficiency gain of anything from 10% – 40% when your clients are using an internet based accounting systems. That means 10% – 40% less time on the same job.
  10. When a client has their data on the internet it is easier to transport the data from one accounting firm or accounting software supplier to another. Click of a button.
  11. Every week we are hearing of clients who have switched accounting firms because the other firm did not offer an internet based accounting system.

And the final fact.

12. This is going to happen whether you like it or not!

This is a revolution going on in the accounting space. And you are in the box seat to capitalise on it – or possibly be wiped out. You need to be like a surfer and ride the wave. As one supplier told me 2 weeks ago – we’re only 5 minutes into the 90 minute game.

So here is what I see as the future of all of this.

This revolution is like internet banking was 10-12 years ago. The early adopters got onto it (internet banking), the banks made it easier to use, increased security and now it’s just the way we transact.

I see this wave coming where clients will demand you set them up on an internet system and they will switch firms because of it. You might say the strength of your relationship will stop that. I question the strength of that relationship when you only see your client 1 or 2 times per year. What would happen if you only saw someone you loved 1 or 2 times per year? Ok, some of you might say that would improve things!

I believe that compliance will become a commodity with internet accounting. The technology will simplify everything. The technology will link to government agencies, other portals of interest and it will feed content down to the end user. If compliance becomes commoditized then where is the accountants ‘mystique’?

There is no formal connection between accountants and client. There is a history/relationship/mystique connection – but you are not ‘connected’ formally. I see that internet accounting will diminish the loyalty accountants currently enjoy – unless you connect with them formally.

I truly believe that these new systems will make it easier and faster to process compliance. That means that run of the mill annual compliance will become a commodity. When products/services become a commodity then inevitably price pressure starts. If you are charging an agreed fee and you can take out 10% – 40% of the time, and the service is a commodity, then what is the ethical thing to do? My view is you need to reduce your price and price based on your value you provide.

There will be a new breed of ‘price cutting’ accountants start to appear. Internet based accountants. No relationship with the client. All delivered via the internet. Online support if needed. The work is done ‘wherever’. Who knows where? And for some who cares.

I think these new systems have the power to wipe out traditional/tired/stuck in their ways/yesterday based accounting firms. If your clients want it and you’re not delivering it then they will fill find someone who will. Are you going to pull down your shingle, sell out or get with it and ride the wave?

My view all this change equates to massive opportunity for savvy accounting firms who are truly interested in making a difference with their clients.

You see, when your clients are ‘internet accounting enabled’ the data is real time and more accessible. Your clients can see what is going on every day on any mobile or fixed device. It is a bit like what the late, great Steve Jobs said when he launched the Apple iPod® he said this device will allow you to have “1,000 songs in your pocket”.

I am going to say something similar – your business data in your pocket™. Your clients have their data in their pocket at any time – in real time.

Is cloud accounting your friend or your foe? Depends how you look at it. It’s your friend if you ride the wave and capitalise on it. It’s your foe if you do nothing.

Let’s say you want to make it your friend.

Imagine you have helped your clients get onto any one of the major internet based accounting systems. You guided them which one to choose and helped them get set up on it. You got on the front foot and promoted it to your clients before another accounting firm did.

Your clients accounting is now in the cloud. Once you get the hang of it you now have excess capacity and you now have some choices to make. You can either downsize your team, buy some fees or you could do what most have wanted to do for years – add value in a positive way to your clients with that new found excess capacity.

Imagine if you are now formally connected to your clients via the internet and you can see what is going on in their business in real time. With this data you can then become more relevant and more useful.

Imagine if you could see a consolidated view of your clients’ data, in real time, on your mobile device or PC. You don’t have to wait for next year to see this year’s balance sheet/P&L and financial situation. That is looking in the rear view mirror at history. It’s bordering on useless. We’re a real time society and you as the accountant need real time data. Real time on your phone, tablet or any PC.

And it didn’t matter what accounting system your client used. Your consolidated view would be with all clients and all accounting systems.

Imagine if the system would alert you if something untoward is happening – debtors up, payables up, cash down etc. The system sent you a text message or email when your clients go in the ‘red’ or it gave you a health check of all clients – no matter if they are in the ‘red’ or the ‘black’. If the system told you this you could then simply react to your clients’ situation and either alert them to the issue (good customer service) or you might have a meeting with them to help them solve the issue on the spot or have them buy a higher level service from you if need be.

Imagine if that same system fed up content to you and gave you help on what to say, how to say it and how to fix business issues. Imagine if that same system coached you and your team members on what to do, how to act and how to be better advisers to your clients.

Imagine if the system did real time benchmarking with the same industries that your client is in.

Imagine if the system enabled you to do a business performance review – on the spot. It enabled you to be more meaningful at your annual meeting with your client.

Imagine if it showed you how to plan the next 12 months with your client and with a click of a few buttons it prepared a budget & cashflow statement that was robust and ‘financier ready’. And then with the live data feed it helped you and your client monitor their daily, weekly, monthly, quarterly and annual results.

Imagine if you had ….

“Your clients’ business data in your pocket – anytime, anywhere…real time™”

That’s the future.

Available very soon for Proactive Accountants around the world.

I am a very keen (mad) golfer. I golf in the rain. My clubs are always with me and I have 3 major golfing goals. One is easy the other 2 hard:

Goal 1 – Play every top 100 golf course in Australia

Goal 2 – Play every top 100 golf course in the World

Goal 3 – Play off scratch (zero handicap)

So with goal 3 I have regular coaching. I really love my coaching sessions. James my coach always challenges me and finetunes something. Each session I learn something new as well. And as a good coach he keeps me accountable.

This weeks lesson he invented a new game where I had to chip (46 metres) into a made up hoop. It was quite a challenge. There were points allocated to each good shot and points taken away for each bad shot. A bad shot was when I did not get in the hoop. I was on minus 13 (not good) after 20 balls.

I was getting quite frustrated and said “I am going to play this way I would normally play it”. James snapped back (and he’s the pro remember) – “PLAY IT THE  WAY I TEACH YOU”.

Ahhh. He’s the pro and I’m not. So I did play it the way he taught me and it worked. I got to plus 16 for the next 20 balls.

How many times do you listen to experts and not do what they say? You should only listen to people who are much much better than you. When I am playing golf often I have my opponents (who are not pro’s) say “can I give you a tip”. NO is my automatic response.

I am only going to listen to someone who is much much better than me. In life and in business. Who are you listening to?

After 18 years working within the accounting profession I have developed a brilliant 3 step delivery model which my coaches follow and all of the content we deliver follows.

To develop an accounting firm we coach and teach them to…

1) Get better with what they have got
2) Get capacity
3) Grow revenue substantially

Most accounting firms are busy busy busy. So it is pointless marketing extensively if you cannot deliver on the new work. Typically we can get a firm to ‘run out of regular’ work in the first year. A typical result is what you used to do in 12 months now takes 9 months. That creates capacity. You need to be offering value added services early so you can fill the pending capacity.

The diagram below highlights the 4 key areas we help firms with. Workflow, People, Revenue & clients. There are 26 sub points which we feel are vitally important to work on and get right. We have the tools, content, proven processes to fix each area and develop the firm.

To be a successful accounting firm you need to have all 4 major areas working like clockwork.

Roadmap to success

A little story that has never been told before in this amount of detail.

I have been business coaching for 6 years. In my first year (2006) I did $975K in revenue. Every year since then it has been well into 7 figures:

2006 – $975K – just me coaching
2007 – $2.2M – just me coaching
2008 – $3.75M – me plus 1 part time coach
2009 – $4.75M – me plus 2 part time coaches
2010 – $5.75M – me plus 2 full time coaches
2011 – $6.5M – me plus 2 full time coaches

This year my business will do somewhere between $8M – $10M in coaching fees. There are 4 of us coaching this year and mid-year I will require a 5th coach in Australasia.

I was doing some research on the business coaching industry and it seems that if a coach can do $25K per month in revenue they are regarded as a super star. What a joke. My coaches do $165K per month (approx. $2M in annual revenue) – and they only work 60% of the year.

I even read of people who coach other business coaches and their claim to fame is that they might have done $400K in revenue in one year – and that qualifies them as a coach to the coaches. You have got to be kidding me. That only qualifies someone to advise on how to get a job.

There are even coaching franchises that you can buy for $50K – $200K. As I look at the numbers it seems that the individuals who buy the franchise are not the ones that are becoming wealthy. The only people who are getting wealthy are the franchisors.

Other professions are well entrenched in their business models – accounting, consulting, legal etc. And many of these professional service firms are gigantic organisations dating back decades.

The business coaching profession is relatively new and is very much a cottage industry. I invented a business coaching model that can create real wealth for the coach – the business owner.

The business model is very straight forward. It is 100% group coaching. It was originally called coachingclub and it has now ‘morphed’ into a formal network of Accounting firms – the Proactive Accountants Network. Here is my delivery model:

1. I have 8 businesses (of the same type) in each club
2. Each club meets 4 times per year face to face – with their coach.
3. Each club meets 4 times per year over the phone – with their coach.
4. A very cool online service is provided with loads of industry niche content, forum, cloud reporting system, success library, learning centre
5. An upfront fee is charged to join (2 day strategy session is delivered for this) of $3500 – $9000 – depending which service level is selected.
6. A monthly fee is charged for membership of $750 – $3000 – depending which service level is selected.

Now you have to be good for a client to pay you $10K – $30K per year. Very good in fact. And you must produce results for your clients. Our clients consistently rank in the upper quartile of results against their peers. We track their results every month via our cloud based monitoring solution. A client does not mind paying if they are getting value and their KPIs are improving every month.

So far my business has coached 525 clients and currently there are 290 active clients being coached. The average tenure of a client is 2.5 years and we are just about to roll out a solution which will keep them for double or treble that amount of time. With the clients who are currently ‘out’ of the program we are bringing them back in with different serviced offerings.

As I said each coach manages about $2M in fees and since starting 6 years ago I have billed $24M in revenue. Any business should create wealth for the owner.

Over the years I have had dozens of people ask me about the business model. I freely tell them – like I have told it here. But it will not work unless you know the 4 secrets that have been perfected. What I call the “Secret Sauce”:

1. The detail of what happens in the meetings. The accountability methods. The learning style and the group sharing.
2. The niche market (100% of my clients are Accounting firms) is important but more importantly than who is served it is the content that is delivered. The content MUST help improve the KPIs of the client. The content must be succinct and proven in that industry.
3. The finding and keeping client system. No point building a business unless you can find and keep clients.
4. The online experience. The meetings are one thing (and very important) but the online experience is equally important. Chat forum with their peers, learning centre with video based content, success library with templates and an online KPI monitoring service which benchmarks each client against their peers every month.

Why am I telling you this?

Real simple. I am going license my network and coaching model (for accountants) around the globe. I am looking for around 100 licensees who want to specialise in the accounting profession. My business operates in Australia and New Zealand only at this stage.

You might be a business coach, a consultant or a partner of an accounting firm looking for a new career. Ideally you know how accounting firms work. You need to be a business developer who is great at client relationships. With 1.5M accounting firms in the world we want to make a massive difference to the accountants and their clients. We think the market has capacity for about 600 licensees.

We are looking at English speaking countries first with one licensee per (approx.) 2500 accounting firms. No one in the world does what we do for accounting firms. No one gets the results for the profession and no one gets the results for themselves.

We love business success and our company purpose is to “Get business owners addicted to the thrills of success”.

We believe the right accountants can step up and make a difference to business.
We believe it is the accountant who is the natural trusted advisor.
We believe accountants can make a difference to their clients if they have the right tools, coaching and training. We have all of that – including new advice tools like cloud based KPI monitoring where we consolidate data of SME business right to the accountants desktop or mobile device.

If you are interested in pursuing this opportunity then send a direct email to me (rob.nixon@nixonadvantage.com) with your CV and reasons why we should consider you. We only want the highest quality licensees to represent us around the world.