Yesterday in Auckland was my last seminar in the series. We called the event “Capitalising on the Cloud”. It was a truly awesome 1 day seminar with amazing feedback from those that attended. It was a massive production that lasted 5 weeks – Monday, Wednesday and Friday for 5 weeks.
It was actually my 2nd largest seminar tour in Australasia in 20 years. Here are the event stats:
- 14 cities
- 660 Accounting firms
- 1,354 people attending
- 27 flights
- 25 hotel room nights
- 30,289 KM of air travel
- 1,036 KM of road trip
- 636 Questions answered (loads of questions each day)
- 672 songs played – 48 per event
- 322 funny jokes/stories told (at least they laughed at most of them)
- 81 people supporting – team on site + event partners
- 4 games of golf (not enough I know)
- 6 fish caught (lovely rainbow trout)
And the BIG one. The 660 Accounting firms committed to signing up another 46,200 of their clients to a ‘cloud accounting’ system in the next 12 months. That will take our tally on my cloud product PANalytics to more than 84,406 users.
Special thanks to our event partners, MYOB, CCH, Accountancy Insurance, FeeLink & SMSF advice.
Time for a rest!
Are you a ‘Real time Accountant’ (RTA) or a ‘Redundant data Accountant’ (RDA)?
The vast majority of Accountants I meet have around 80% of their revenue coming from annual compliance services. That means once the financial year ends they start preparing financial information so it can be lodged with the various Government agencies. By the time they present their findings back to their clients it is 4, 6 and sometimes 9 months (or longer) late.
Seriously, what good is data 9 months after the fact? It’s redundant data. I cannot run my business based on redundant (albeit accurate) data that is chronically late. It’s useless.
It’s interesting that in these ‘annual presentation’ meetings (of the redundant compliance data) Accountants attempt to offer help. ‘Why did you do that?’ and ‘you should have done this’.
There is no point looking in the rear view mirror while offering me advice. I’ll probably hit the oncoming car whilst you’re giving it to me!
As a business owner (and all of my business owner friends say the same thing) I don’t want a RDA, I want a RTA. RTA’s do it differently. They actively promote ‘cloud accounting’ solutions so the data is real time and accurate. They don’t sit around and wait for things to happen. They visit clients. The have their team members trained in offering value added services – the ones that make a difference to my condition. They are connected to their clients through real time financial dashboard. They are alerted to the financial trends in the client site as it happens. They are truly useful!
Get your firm into a position where you are real time not redundant. Rise the Real Time Accountant.
In the last 12 months there were approximately 25,000 Australian office jobs sent to the Philippines alone. According to experts this number is set to double this year. It can be a touchy subject with some people but it’s not going to go away. Clothing has been manufactured overseas for years and now its office jobs. When the labour costs are 1/5th to a 10th of what we pay locally it is a compelling opportunity for businesses to consider. There is also an abundance of people who are educated and very keen to work.
Although many Asian countries are offering outsourcing resources I am most familiar with the Philippines market. There are approximately 1.2M people currently hired and it is growing at 20% pa. They cannot build the office facilities fast enough to house them all. To become a qualified CPA it takes 5 years after university and you can hire them for around $4 – $7 per hour. This is considered a good salary.
When I first visited on an outsourcing study tour the following line got me: “any job that is done over the phone or behind a computer we can do for a 1/5th to a 10th of the cost”. So basically any non-customer facing role can be done cheaper and often better.
The use of cloud technology is critical to making this happen in Accounting firms. Instead of sending large data files backwards and forwards the off shore Accountants are working on the same file you are. If Accountants locally are not adding value to the work they are doing then their days are numbered.
The Accounting firm of the future will have local team members who are customer facing and adding value. Everything else will be done somewhere else. This is happening right now.
At my upcoming “Capitalising on the Cloud” 1 day seminar I am interviewing an Accountant who has hired 38 people in the past 3 months to work for his Australian clients. He has 28 people on the Gold Coast and now 38 in the Philippines. It’s a fascinating story. I am going to step you through all of the options on how you can capitalise on this opportunity. The seminar tour has 11 cities to visit from March 24 – April 16. For more information and registration details go to www.cloudseminar.com.au.
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.
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.