It was June 2012 and I was attending a Xero Roadshow in Canberra. I was the newly appointed Xero champion for my firm and I was excited to get all the latest updates to take back to the partners. I thought with all the tangible evidence I now had, they would surely jump on board with Xero and other cloud-based tools this time around.
I had been receiving a lot of push back from them. They assumed technology and the cloud wouldn’t have an impact on their business or clients. I was determined to find a way to prove to them it was the way of the future.
I remember telling this to one of the Xero Account Managers at the event. His very casual, nonchalant response was just “go out on your own and do it”. I was quite taken aback and surprised, what did I know about starting an accounting firm? I’m too young, excuses, excuses, excuses…
Fast forward 12 months. I’d just completed my CA qualification and all the other things required to go out on my own. I was just about to jump in, when I realised that my contract had both restraint of trade and non-solicitation. I should have really checked that out sooner… oops.
Making a leap of faith
Not deflated in the slightest, I made the jump. I thought to myself, I’ll just go and get new clients, I don’t need to take my existing ones with me. How hard can it possibly be?
In early July 2013, with only $1,000 in my pocket, I carefully budgeted how many new clients I needed to have the business pay me enough to feed myself (and at what point I’d have to resort to 2 min noodles). I went out on a mission to implement all the amazing cloud technology I’d been pitching, this time in my very own accounting firm.
I’ll never forget the comment I got from one of the partners of the firm the day I left, “I needed $300,000 to start this business, you’ll be back here looking for a job in 12 months.”
Then I did the numbers:
Old school – Cloud based
Server = $60,000 – Google Drive = Free
Office Rent = $40,000 – Cafes and client’s offices = Free
MYOB = $60,000 – Xero Practice Manager = Free (On the proviso I got to 25 clients)
Receptionist = $40,000 – Having no office and no paper to print and file = Free
After two months I’d reached 25 clients, giving me access to Xero’s Practice Manager for free. And after six months I’d already reached my 12 month revenue target, had clients in Canberra, Sydney, Melbourne and Perth, and more importantly, I hadn’t had one meal of 2 min noodles!
Growth in this manner had only been possible with Xero and all the cloud technology we used in the business. We didn’t and still don’t have a filing room or a printer, and our meetings are mostly online or over the phone.
Time to scale
By January 2014, only six months in, it was time to get some help. Our first employee was by far my scariest moment in business. Would I have enough to pay their wage each month? Would I have to forgo my own wage to pay theirs?
Not only has this never been an issue, but we’ve put on more staff since. We’ve doubled client numbers, staff numbers and revenues every year for the last two years, and we’re on track to do the same for year three.
We moved into our first office in July 2014, and also brought on a partner in Canberra to head up our local presence there. Being cloud based there are no dramas about where files are kept, no calls asking for files to be sent over. Everything is just where it needs to be, in the cloud, accessible anywhere, anytime.
Our profitability is also well above the industry benchmark. Our total expenses, other than wages, only make up 10% of gross revenues.
Obstacles to overcome
All this hasn’t been easy though. There are many challenges unique to being 100% in the cloud. The main one is staff training, the second passwords. With all paper-based processes being replaced with apps, this means new staff have a huge learning curve when they start working for us. What app does what, how do I get the app to do this? It takes a little longer than in most traditional accounting firms for our staff to be all trained up. But once they are, they’re far more efficient and productive.
The password problem was solved with, you guessed it, another app. This app houses all our firms passwords in an encrypted portal. Employees can access all the programs they need to use, with just one set of login credentials.
Time to push the boundaries further
This year is poised to be another year of innovation thanks to being 100% cloud based. Watch this space for more of what we have in store this year.