By Gary Turner*
Cloud technology is having a transformational impact on the accounting industry, especially when it comes to broadening services to include more value-added and revenue-driving offerings. According to research by Censuswide, more than half of practice-based accountants in the UK are either using or are planning to use cloud-based software in their operations in the near future, with the aim of streamlining costs and increasing client satisfaction.
For practices that make the switch, the rewards can be significant. In particular, one of the biggest benefits of an online software solution is making it possible to work more collaboratively with clients because both parties have shared access to the accounts and can access them at any time and from any location. Equally, by offering higher-value advisory services that go beyond the basic tax and compliance package, practices can increase revenues and are more likely to be viewed a trusted business adviser, as well as a service provider.
Rather than taking a bite out of revenues, the fact that a cloud-based approach can help accountants deliver additional services for clients makes it possible to base fees around the value they add – rather than the hours spent on the job.
Crucially, rolling out more strategic services should also plug any revenue gap left as a result of having automated some of the more mundane manual data entry tasks. In this way, practices can use online accounting platforms to move beyond a basic level of service towards value-added functions like management accounting, data analysis and business consulting.
Having shared access to data also makes it more practical to spend time talking to clients about what their financial numbers really mean and focus on the decisions that can be made to move their businesses forward – rather than wasting time trying to get the numbers right and finding and fixing those hard-to-find data entry errors.
From a client perspective, many businesses will welcome the fact that cloud solutions are subscription-based and therefore typically priced at a low monthly rate. As a partner, this in turn enables practices to provide consistent monthly billing and more predictable costs for clients.
Making the transition
As with any significant change, a move to online accounting is unlikely to be entirely seamless, not least because it involves shifting practice management, tax, accounts production and bookkeeping systems online.
For this reason, as a first step before recommending cloud-based accounting software to clients, it’s well worth becoming more familiar with the technology by adopting it for the practice’s own accounts. Having used it within the practice, accountants not only gain the knowledge and experience needed when working with clients on the same platform but will also discover first-hand the broader benefits of working in the cloud.
The next step for the practice would be to identify which clients to move first by thinking about which would be most receptive to the technology and which would benefit the most.
In terms of company profile, this might include (but not be restricted to) younger firms of less than two years old or those which are particularly tech-savvy and have fewer than ten employees. However, it is also well worth identifying those who are currently struggling with their accounts using Excel spreadsheets as, using online accounting, they can import existing data and carry out processes which previously took days in a matter of hours.
*Gary Turner is managing director of Xero UK