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Why big accounting firms are trying to sign small business clients

Posted 5 years ago in Xero news by Guest
Posted by Guest

Things we count as “common” today were only figments of science fiction writers’ imaginations forty years ago. Motion detecting doors, self-parking cars, global video chat. These are now an ordinary part of life. Change is happening rapidly in every sector, leaving no one unaffected. How is this impacting the accounting industry? What else is to come?

How the accounting industry has changed

All of us in the Xero community have watched these changes over the past five years, and they are not trivial. The shift is not just “cloud based accounting”. In 2011 there were at least 17 cloud based accounting systems available in Australia, the UK, the USA, and New Zealand. But what Xero has done is truly significant. And it’s based on the accelerating pace of change in today’s world.

Xero’s contributions are wide and broad. But three elements stand out.

  1. Xero woke up the world to cloud based systems as the future of the industry. Despite many other cloud systems, it was Xero that shook up Intuit, Sage, MYOB, and others.
  2.  Xero built their sales vision around helping SMEs. Whether the client was an accountant or the business owner. For Xero, the objective was to bring companies to greater financial stability and performance.  Xero driven accountancy firms focus on service, not just tax and compliance.
  3. Xero expanded its global universe through working with value added developers (e.g. Receipt Bank, Deputy, ProfitSee, and hundreds of others), who all share a passion for helping SME companies.

Big accounting firms are now moving into the SME marketplace

This expansion of value added developers has generated another massive shift.  Features and services that were only available to large corporations are now available to SMEs.  In many cases, the seamless integration with real-time data in accounting software has provided tools and benefits far beyond what is being done in Fortune 100 companies.

This has created an impact on accountants they did not expect. The demand for value added services to SMEs is growing very quickly. Business owners find out what can be done, and they go “shopping” for where to get it. How large is this impact?

Historically, accounting firms that primarily service SME companies offered only tax and audit services. The accounting firms that were offering value added services were the bigger organizations. Places like Ernst & Young, KPMG, Deloitte, Price-Waterhouse-Cooper, and similar sized firms. The difference was that their services were from mid-sized on up to large corporations.

That has changed. Many of these large accounting firms now have a dedicated focus towards the SME marketplace. Why? Their traditional clients have grown “smarter” and are squeezing the price/value proposition. The larger accounting firms have realized the SME marketplace is the largest opportunity for their companies globally.

Though most of them are in the early stages of learning how to provide these services to SMEs, one thing is certain. They have deep pockets and a long, successful record of service to business.

The chain reaction has begun. In today’s world, five years is a long time. Broadening your services to the SME market is occurring faster than you think. The accounting industry will be unrecognizable to most five years from now.

Embrace the change. Those that do not will be left in the past.

 

Peter M. Vessenes is the CEO of ProfitSee. ProfitSee gives you access to financial intelligence and reporting tools typically reserved for large corporations. They provide CFO-level financial insights for small and mid-sized businesses. 

3 comments

Jordan S Zoot CPA
September 8, 2015 at 1.08 am

Its clear that the writer of the post has a rather skewed view of the accounting profession. He also has a HUGE sense of self aggrandizement. The Big 4 and other large firms have always been involved with small businesses. One thing is absolutely certain…based upon what we read here, we will NOT uses his company’s product, nor will we work with it for client. There is absolutely no reason to make the accounting firms out to be the enemy.

Xero has a good product, but there are other good products that we work with as well. This is yet another example of why we DETEST the smug arrogance of those that refer to themselves as “niche” firms and would have you believe that the rest of us are like [link removed]. All I can say that you might publish is OH HELL NO…and we are a Xero Accounting and Cloud Integration Partner.

Andrea Silvers
September 8, 2015 at 7.36 pm

Hi Jordan. We appreciate the different perspectives that people bring to our blog through their accounting experience. Peter recognizes that the landscape has changed significantly for accountants – and everyone that wants to succeed has to adapt or they may get left behind. New technology has leveled the playing field so both large and small firms can now add the same value for their small business clients. It’s a win/win for everyone. We value our accounting partners large and small – there’s room for everyone to thrive.

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November 10, 2016 at 3.10 pm

Good post. I learn something new and challenging on blogs I stumbleupon on a daily basis.
It’s always useful to read through articles from other writers and
use a little something from their websites.

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