Very few blog  posts spark my interest. This one is amazing. It tells the brutal truth about Accountants and why they do not want to promote Cloud Accounting.

It’s by my friend and client – Nick Sinclair from the very innovate financial services group Wealthfarm. Enjoy!


Why your accounting costs will decrease by 30% and why your accountant doesn’t want you to know about cloud accounting

By Nick Sinclair

Most accountants don’t want you to know about cloud based software because they know it will save you 30-40% of your accounting and bookkeeping time, which means your accounting costs could reduce by up to the same amount.

A recent survey found that only 14% of SME’s use cloud based software to manage accounts. This same survey showed that 52% of accountants are concerned with losing work due to SME’s replacing their services with cloud based services.

Accountants are currently rewarded for taking more time and being inefficient (by charging you by the hour, and often at laughable rates).

One of the biggest complaints we get from new clients when talking about their old accountants is “They billed me to read and respond to an email”, “I was shocked to see how well we did when our tax returns were completed six months after the end of financial year, this meant we paid more tax as we weren’t aware of this” or “I always got put through to a junior accountant as my accountant was too busy but still charged $150 an hour for this privilege.”

This is the old way of accounting and the future will look completely different to this. Accountants are scared of cloud solutions as you can see what they have or haven’t done, meaning they need to actually complete your work within a set time frame, instead of you just being another file on their floor. Now there is real transparency.

Where an old accountant used to provide value by producing tax returns, the new style of accountant provides value by working with you to help you grow your business, so you can grow your overall wealth. The duty of completing tax returns is now just a formality, with the real value being in assisting with understanding your business and helping you to grow it. The use of cloud accounting has aided this over the last few years.

Our business decided two years ago to source the best software to do this. Our research showed there was only one company (who we have partnered with since, and moved all our clients onto this system). This solution is Xero.

Xero has allowed us to have live, accurate figures for all our clients businesses, entities and even their personal situation. We can tell them at any point in time how their financials are looking, and what their current tax, GST and super obligations are. These are updated daily, and can be accessed anywhere in the world via the internet. Imagine being on holidays in Fiji and doing your payroll and wages while relaxing next to a pool. This is now possible.

Since making the decision to move all our clients to Xero, we have almost daily reduced new clients accounting costs from $10,000 – $15,000 to $4,000 – $6,000. The funny thing is we provide almost twice the amount of value to clients, at half the cost. Since their records are now live and accurate 24 hours a day, we can work with them to help you make more money.

I urge you to look at what value your accountant currently provides you. Do they offer a flat fee for the work they complete, or do they get rewarded for being inefficient? Has your accountant showed you how Xero can help save you 30-40% of your data entry time meaning the can add value by helping you grow your business? If you can’t answer yes to these questions, I suggest you speak to us about how we can save you money, but more importantly help we can help you know your current numbers, and how to make more money.

Goodbye to the old way of accounting!

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