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A new breed of accounting firm

Lucy Danon

In my role as Associate Account Manager for Xero UK, I deal with a large number of new Xero Accounting Partners in the early stages of their move to the cloud. In recent months I’ve noticed an interesting trend – more and more of these firms are being run primarily as businesses, not traditional accounting practices.

The subtle difference in many cases is the owner I talk to (or one of the owners) is not necessarily a qualified accountant but instead a business person/entrepreneur looking to take advantage of cloud disruption.

Firms which are built as a partnership between accountants and entrepreneurs are thriving with the entrepreneur driving the business side and the accountant doing what they do best: providing expert advice to clients.

With the direction of the accounting firm no longer driven primarily by someone with a background in doing traditional accounting work (such as annual accounts and tax preparation), the focus moves to marketing and business growth.

As these practices become established with Xero they move on to Senior Account Managers (SAM’s). The feedback I get from the SAM’s is that having a different profile of person at the helm of this new breed of accounting practice also has flow on effects to how the rest of the practice operates.

The firm’s owners don’t tend to have the traditional portfolio of clients to deal with – instead they focus on running the business, making sure existing clients are happy and attracting new clients. This has had a noticeable impact on three main areas that are all interconnected:

  1. The skill set accountants are hired on now includes client service skills. With more of the firm’s staff having face time with clients this skill set has become increasingly important.
  2. Marketing messages are shifting from establishing professional credibility to “certainty of fees”, or “proactive help to grow your business”. Behind the ‘fee certainty’ message is often a fixed fee bundled service offering – so this changes the pricing model.
  3. Fixed fees has lead to eliminating timesheets – reducing admin on staff and freeing them up to focus on the priority of delivering client service.

As clients expect more from their accountant and more for their money, being able to advise them in real time, and the ability to manage all clients in one place, is increasingly important.

I know from talking to my peers on the front line across the global Xero team, this new breed of firm is emerging everywhere. And given the UK has historically been considered a more conservative market it appears the time has really come for change in the profession.

How is your firm adapting to the changing environment and client needs? Talk to your Account Manager about how you can work with Xero to create the cloud strategy for your firm. Email partnerteam@xero.com.

 

Read more about Accountants, cloud accounting

 

11 comments

Alan Broome
25 January 2014 #

Very interesting post. We are exactly like that. Entrepreneuer (me) with admittedly a background in running accounting and tax business, with experienced, qualified experts providing the advice. Works well.

John MacPherson
25 January 2014 #

This is exactly our business model at Immersed Accounting and something we often talk about with our clients.

As soon as an ‘owner operator’ becomes and ‘owner manager’ everything changes and we believe it’s vital to focus on strengths and avoid weaknesses. Managing a business successfully is an art and has a completely different skill-set to operations, sales, marketing, IT and indeed accounting.

I embrace working with colleagues or partners that are more experienced and qualified in certain areas than myself as I learn from them every step of the way.

Many small businesses are formed through workplace progression by someone who is excellent operationally in their trade but may have less experience in running a company. In this instance, bringing someone in at Director level (even if only part-time or even freelance) has huge advantages and as the founder is likely the shareholder, they retain ultimate control.

Excellent article, really positive to read.

Matt Creed
28 January 2014 #

I disagree, almost entirely. I cannot just sit here while you all congratulate yourselves on a job well done.

The shift you describe above represents a change from accountants providing the service that is so valued to providing something designed to provide the accountants value (and not the clients).

Maybe your article is talking about adding value to the clients…but it seems much more focused on these “SAM”s adding value to the practice.

If you did want to add value to the clients, I think flexible partnerships with business coaches and business developers are a much more liquid arrangement that also protects your client base from the risks of a kind of business that accountants are not as valuable in (I include myself there).

Cameron
29 January 2014 #

@Matt – Unfortunately you are expendable as there are probably 100 other people in your area offering the same services as you. As the industry shifts from the traditional model to the cloud model, business owners on the receiving end of these services are increasingly looking towards entrepreneurial accountants to advise them matters pertaining to their business and creating efficiencies wherever possible. Unfortunately, as can be evidenced by your statement above, most accountants are still living in the stone-age while the rest of the world is passing them by. The smart ones are partnering with entrepreneurs to create these 21st century cloud-based firms and are offering value added services such as business consultation with regards to Xero add-on’s and creating/implementing a well designed system for their clients. This is what clients are coming to expect. This “valued” service that you provide is still being provided…

Paul Bulpitt
31 January 2014 #

Great blog post Lucy. Absolutely bang on. The first balanced article I’ve read by someone who understands this trend.

@Matt – interesting that you assume that giving ‘fee certainty’ as Lucy calls it and proactive advice is NOT giving clients value or what they want. Read any client survey and you may be surprised.

@Cameron – well put! “most accountants are still living in the stone-age while the rest of the world is passing them by”

Steven Pastel
4 February 2014 #

I’d rather go to my local ‘stone-age accountant’ thank you – at least he won’t try and send me to Mars, and then bill me for the pleasure.

Troy
4 February 2014 #

@ Steven Pastel. Wow you really have got the wrong end of the stick. We are finding that clients are hungry for our input and in most cases they are happy to pay for greater involvement. Even in cases where they are not so keen we are still providing greater support as we want them to be successful. It benefits all of us.

Clayton Moulynox
4 February 2014 #

Great post Lucy. I’ve attempted to coin a term for this new breed of accountant: The “Accloudant” – http://moulynox.com/2013/12/accloudants-a-new-kind-of-bean-counter/

STEVEN PASTEL
5 February 2014 #

I am still unsure of the differences between an Accountant an Accloudant. If an Accloudant is simply an impatient technophile, (s)he/(s)him will be wanting the fundamental acuity demanded of a successful professional accountant. I hope an Accloudant won’t be telling me to be ‘creative’, ‘p-p-p-passioate and to ‘think outside the square’ in running my corner store…because that line is at least three centuries old now and if the truth be known, it is a load of utter bosh.

Elaine Mullen
9 February 2014 #

After over 30 years as an accountant and 17 with my own practice I totally agree that if you need to keep up to date with emerging technologies to stay in the game. 3 years ago I moved my practice to the cloud, changed to fixed fees for service which my clients love, started outsourcing and hired a marketing company. Firstly, yes I am an Accountant and my clients get the benefit of my expertise, but I’m also a business owner and have a life outside of my work. Moving my business to the cloud with Xero practice suite was the best thing I ever did for my own practice. It was therefore a no brainer that if my business could benefit and allow me to spend time with the data processing and more time working on the business then it made sense that my clients could benefit too. Within a year most of my small business clients moved to Xero and the feedback has been great. Their business data is always up to date, allowing them to monitor cashflow and their profit and loss statements at the push of a button. My staff and I can monitor how they are going, provide support and timely advice, fix mistakes on an ongoing basis by log in in real time and seeing exactly what they are seeing. Our clients love spending less time on their paperwork and more time working on their business.
In this ever changing world of Internet, social media and new technologies, if you don’t keep up you will get left behind. Remember the Y generation are the the new business owners of today. My older less tech savvy clients still get our respect, great service and advice.

Elaine Mullen
9 February 2014 #

Few typos above. Sorry about that. Wrote it all on my iPhone. ????????????

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