If you’re running an ambitious accounting business, then our advice is straightforward: move your business to the cloud. Xero research reveals that cloud-based accounting firms have five times more clients on their books than traditional firms. On average, these cloud-based firms enjoy 15.5% year-over-year (YoY) revenue growth, compared to 3.9% at traditional firms.
Based on our survey of more than 700 accountants and bookkeepers, here’s how cloud-based accounting practices stack up against traditional firms:
One of the biggest benefits of cloud accounting software is that it automates repetitive manual processes. In other words, it gives accountants more time to focus on strategic work like winning new business. This is evidenced by the fact that cloud-based firms can add and service more clients than their traditional peers.
In fact, cloud-based accounting software is transforming the very role of an accountant. Liberated from time-consuming administrative tasks, these professionals now have the time to offer clients important advisory services. Companies are no longer approaching accounting firms for mere number-crunching assistance, they’re also looking for expert advice to help them grow their businesses.
Keep in mind that, when your firm shifts to the cloud and starts providing the expert advice companies want, you’ll have to rethink your billing. With much of the time-heavy work managed by automated accounting software, value pricing is far more relevant. As opposed to billing hourly, it reflects the true substance of the work – and often means a higher return from each client.
Harnessing the cloud
Technology is ever-evolving. What’s more, there are many cloud-based programmes and platforms to decide between. For many traditional firms, this presents a daunting task – which software do you choose, and how do you implement it with as little disruption as possible?
The truth is, a successful move to the cloud won’t happen overnight. The process requires careful planning, dedicated resources and senior-level support. It’s crucial that you appoint a team to manage client conversion. This will help ease the transition for potentially cloud-shy clients and keep them reassured from one day to the next.
To successfully harness the cloud, your firm will need to re-prioritise certain functions until all is up and running smoothly. Setting this expectation from the beginning will get everyone on board and working towards the same goal.
Your employees are a critical component of your cloud strategy. The millennial workforce is tech-savvy by nature, adaptable and comfortable with change. These young employees are key to moving your firm to the cloud. Not only are they unfazed by new technologies, they can help their less confident colleagues adapt faster.
Migrating your practice to the cloud may sound unnerving but it’s long-term benefits far outweigh any initial concerns. As a cloud-based financial advisor, you will be able to add more value to your clients. This will help solidify relationships, improve loyalty, increase profits and boost your position as a top accounting practice.
By Colin Timmis, Xero, Head of Accounting, South Africa