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.
From July 13-17 I am hosting our annual conference in Bali. This time we are opening it up to the world for any Accountant to attend. We already have 340 booked and paid which will make it our biggest most exciting conference ever. I recorded a short video a couple of weeks back. For more information and registration details click here.
I just returned from a visit to the Philippines. The purpose was to visit some Accounting firms (and interview them) and to meet my team for the first time. I filmed 3 Accounting firms who operate out of the Philippines into Australia. So their clients are in Australia and their Accountants are in Manila. What was fascinating was how easy it is to set up shop, find people, train them and get productive.
You can essentially set up shop 2 ways.
The first is to go through a “BPO” business (Business Process Outsourcing) where you lease the people from them and the BPO supplies the desk, chair, computer, supervision, office, software etc. Think of a labour hire business meeting a serviced office. There are around 200 BPO’s in the Philippines alone and it is governed by a professional association. That’s how I have done it with my current team of 3. They work directly for us yet they are housed in a BPO’s office. We like this method because it is simple and relatively fast. We’re currently hiring 4 more to take the team to 7. We pay them well, give them good conditions and the total (fully loaded) cost ratio is 4:1. That means we can hire 4 Filipinos to 1 Aussie. There is an abundance of labour, they are smart, eager to learn and this strategy has helped grow my Australian operation.
The second way is to incorporate your own company and then rent a space, fill it with desks, chairs, computers etc and hire the people direct. This is certainly a cheaper option (by about 50%) however the compliance and set up process is (I am told) very difficult. Having said that you are in complete control and if you want 10 Accountants then go for it.
The office you see below did not exist 3 months ago. In 3 months flat my friend who has a financial services firm on the Gold Coast of Australia has hired and trained 38 Filipino Accountants and admin team members. They are servicing Australian businesses with book keeping and compliance. Everything is ‘cloud’ based so no data is moving around and all the Australian clients know that their work is getting processed overseas.
Some people have a problem with this and that is their problem. I say just look at the clothing you are wearing and see where it was made! There is a lot of detail in how you do this. If you are interested in the topic then at my upcoming seminar “Capitalising on the Cloud”. I am touring 14 cities in March & April. Click here for more details.