What does it mean to go “beyond accounting?”
It means taking full advantage of the automation tools available. It means using them to streamline business practices. As 2016 is an election year, it’s even more critical for accountants to understand the tools available to help the economy grow by keeping small business thriving.
Here are 10 ways accountants can stay ahead of the game and become digital savvy connected advisors:
1. Understand the market
Small businesses spend trillions of dollars and are responsible for job creation, which translates to huge opportunities. Small businesses that use Xero are three times more likely to stay afloat than those that don’t. Xero can decrease the average time it takes to get paid by vendors from 41 to 26 days.
2. Implement fixed billing
In the world of accounting, time is traditionally the inventory of a practice. Each staff member has a 1:1 relationship with a client. There’s a limit to how many minutes or hours you can bill when you’re charging out your time in six-minute increments. Make the move towards fixed billing based on value, and move away from the “time as inventory” model. Clients are prepared to pay for your expertise and the value you bring to their business. This also helps the cash flow planning of a small business so they can properly budget for their advisory costs each month.
3. Take control
The move from being an accountant to an advisor gives you control. You can start by moving systems and processes off of desktop software (or filing cabinets), to cloud-based options. People already expect their businesses and services to be available where they are. That means on their phones, laptops, work computers and home computers.
Making this digital transformation allows you to be one step ahead of the business and take control. Leading your clients rather than being led by them. The rate of digital change doesn’t seem to be slowing down, nor does the amount of work clients expect of you.
As a connected advisor, you can achieve a value pricing model by automating the processes in your practice. For example, use online e-sign documents, use Skype or live-chat for your client communications, and rely on software for the real-time syncing of data between vendors and customers.
To move away from inventorying your time to a value-based model, procedures and processes need to be automated. This way you have more time to build your business and secure more clients. Becoming a connected advisor means that anything that can be automated, will be automated. Despite the automation factor, it doesn’t change your value to your client. They want you for your expertise and how you can analyze the numbers of their business, not for how long it takes you to run a calculation.
5. Start small
Despite the very best of intentions, you can’t expect instant results. Especially for those with an established accounting practice or system in place. It will take some time to make the digital shift in order to achieve long-lasting results. Starting small can help make big shifts in the long term. Once you have an efficient model, you can duplicate it with other service lines your offer. Pick one or two things to increase the efficiency between all of the accounting functions that are occurring in your business and then move to the next one or two things.
6. Embrace technology
Technology is such an important topic for me, I’m even giving a talk on just this at the Flagg NJ CPA event. Many people have problems embracing new technology because human nature itself often resists change. However, adopting new technology allows you to work smarter, be more efficient and ultimately be more profitable. It will help improve your collaboration with clients. It will also make the work more enjoyable for you if you can free up more of your time and be able to be more proactive with your clients.
7. Set expectations
Given some of the legacy systems in place, the modernization of accounting takes time. Different people will have their own expectations of value and time. But to ensure these are reasonable, you can help set the right expectations:
- Management: a business plan is key to managing the right metrics and understanding that the process will take time
- Staff: help them overcome the fear of change by showing them how the changes will improve both their work and quality of life
- Clients: explain how cloud-based accounting solutions can help create a win-win revenue model and add value to clients’ engagement with your business in new ways
8. Go next-gen
Millennials now outnumber both Gen X and the Baby Boomers in today’s US workforce. Some reports are saying that there are 2.5 billion of them worldwide. The technology you use has the ability to attract the next generation of talent. It can also attract up-and-coming startups and other small-business clients that will create longevity for your firm.
9. Be a partner
A connected practice strategy allows you to create a win-win model with your clients. Partnering for success means developing a human relationship and marketing yourself as a lifestyle advisor or spending coach. Having your backend technology together actually creates the power of knowledge for you.
10. Understand the data
Understanding the different KPIs in various industries allows you to better explain to clients how they’re doing. New features included in Xero’s Business Performance Dashboard can help by incorporating detailed analytics reporting that, at a glance, can show you simple metrics and graphs that reveal how your accounts are performing.
To modernize accounting you have to leverage technology to work smarter, not harder. It means offering clients more overall value for their money — and not just more of your overburdened time.
It also means that you can go “beyond accounting” and be the strategic partner in your client’s businesses that they need you to be.