After being on the ground in the USA a little over eight months, we have witnessed something unexpected among our US-based Xero partner community – an acquisition. Xero Gold partner Harshman Phillips & Company based in Atlanta, Georgia acquired Xero partner Lift Accounting of San Francisco, California. The combined practice will operate under the name HPC and their aspirations are nothing short of being the largest Xero partner in the USA. East Coast meets West Coast with the goal of gobbling up everything in between.
I’ll get back to the acquisition but first let’s look at the broader picture.
Accounting professionals all across the USA are telling us that there is a new kind of client emerging. This client wants their accounting professional to move at the pace their business is moving. Fast. They want a technology savvy accountant that will do things online and make their business paperless. And they don’t need to meet in person. These clients understand the value in moving to the cloud and are looking for a strong, dedicated partner to lead them through the transition.
We are also hearing early success stories from existing Xero partners who are not only growing their top line, but also their bottom line because of the cloud. Nick Bird, of Utah-based Lucid Books, says he doubled his business in the last 6 months and increased profitability. He attributes this to Xero’s timesaving functionality.
Xero Gold partner Chaney & Associates in Sacramento, California has also had a positive experience with the cloud. He cites material timesaving and new client growth, with an average of five new leads per week driven from the Xero advisor directory. “Small businesses are looking for cloud solutions and automated processes,” says Steve Chaney. “We help them get up and running quickly providing 100% cloud-based CFO advisory services.”
So why the acquisition?
HPC’s new Director of Technology Services Trevor Smith, a self-professed tech junkie, first met Bruce Phillips at a Cloud Xero event in San Francisco. Over the previous two years, Bruce had taken his traditional CPA firm “70% of the way to the cloud, but was struggling to get that last 30%”. He was searching for ways to expand his firm’s cloud-based solutions, but like many firms, was struggling to find a dedicated tech resource to take them to the next level. It was a perfect fit. Combining Harshman Phillips & Company, a well-respected 20 year CPA firm, with the technology savvy of Lift Accounting created what Trevor calls “the 21st Century CPA firm”.
HPC has a diverse book of business including software companies, professional service firms, e-commerce, and international companies who need help with U.S. tax & compliance. Most of their clients are interested in becoming tech-connected businesses, living and transacting online, or have already made the move. Some of the new clients they’ve come across are simply desperate for a CPA firm that ‘gets’ the technology side and is also comfortable dealing with the IRS.
But it’s not only the client that is driving change. Trevor says cloud solutions make the entire practice more efficient. HPC can service their clients at the same level or better than a practice that is next door to the client because of the 24/7 anytime, anywhere access capabilities the cloud provides. “With solutions like Xero, where you are physically located really doesn’t matter anymore. All the client cares about is how quickly you can respond to their needs so they can get back to running the business,” says Trevor.
Trevor sees Xero as the central hub of their business. They looked at other cloud vendors, but went with Xero because they appreciated Xero’s product vision and open API. They also like Xero because clients love using it, citing the fun, fresh, friendly, and intuitive interface.
We are just in the early innings in the US, but all signs are pointing in the right direction. It is certainly an opportunity for forward-thinking accounting professionals who can see into the future.