Building a modern cloud accounting practice doesn’t happen overnight. The process is executed successfully with careful planning and access to the right resources. Starting by choosing cloud accounting software, while a great first step, is certainly not the last step.
Speaking at Xerocon SF today, Global Vice President, Education & Head of Accounting, Amy Vetter explained that as more clients expect their accounting firm to be able to collaborate in the cloud, firms that start out in the cloud from day one are at a competitive advantage. If you’ve only just started moving clients over to your cloud accounting software, there’s no better time than now to go all-in.
More than 700,000 Xero subscribers, who are collaborating seamlessly in the cloud, are already demonstrating just how impactful cloud technology has become. Recent Xero research shows that firms with a higher concentration of clients using online accounting software are adding more business and seeing higher year-on-year revenue growth.
Accounting firms with nearly 100% of their clients using online cloud accounting software, reported the highest growth, posting 15.5% increase in year-on-year revenue, compared to 3.9% for firms not all-in on cloud accounting.
Here are four ways you can build a modern cloud accounting practice.
Make a plan
When making a full transition, it’s important to establish a clear plan with milestones that you’re trying to achieve along the way. Decide who is dedicated to converting clients and who will take care of the day-to-day.
This may mean that attracting new clients has to take a back seat. The focus needs to be on developing this new infrastructure. Rest assured that you’re making an investment in your firm’s future. When developing this plan, make sure you’re not taking what you have today and duplicating it. You should be taking what you have today and enhancing it for the future.
Having diversity within your firm is part of what will make it successful. If you haven’t already got millennials working in your firm, you will. They have already become the largest group in the workforce.
Technology generally comes as second nature to millennials. Growing up in front of screens puts them in a position where they are quick to adapt to new technology. This should help ease the transition. Passing on your knowledge to this generation adds value to the profession.
Attracting millennials to your firm is not as simple as posting a job listing. In Vetter’s Keynote at Xerocon, she explained how.
“It’s not just the technology, it’s the culture you put in place,” Vetter said.
Vetter said working toward this culture means implementing mentorship, growth opportunities and a fun work environment in your firm.
With the majority or all of your clients now on the cloud, you can work seamlessly on one ledger using one set of data. It means accountants can increasingly shed the amount of data entry work, replacing it with higher value advisory services where you can help your small businesses grow. Vetter talks about moving from “credence” good to “experience” good and becoming invaluable to small business clients.
“We want small businesses to say, ‘I can’t imagine not having you as part of my business on a monthly basis’,” Vetter said.
Value pricing, while a relatively new concept to accounting firms, is a more reflective way to bill in a cloud-based firm. Services are grouped into bundles for which a set amount is charged, giving firms further incentive to improve efficiency. This gives the small business owner a set amount to budget for and frees up time for accounting professionals to work on advisory services. Vetter said it’s about shifting the vernacular.
“Accounting firms should change the terminology from time and billing to effort,” Vetter said.
Implement a social media strategy
Once you feel comfortable with the way your conversions are traveling and you’re ready to take on new clients, what better way to advertise your modern practice than on social media? Have a clear picture of your market and develop a strategy as to how you can best market your firm.
Develop a social media guide for your firm to follow. Keep in mind the visibility of the platforms as you may need to ask staff to perform an audit of their accounts. Xero has a social media guide you can use to get started.
Laying down the right framework and equipping your firm with the right tools will ensure the transition to a modern cloud accounting practice is smooth sailing.