"With Xero, there was no more manual data entry. Automation became a real thing. I was thrilled."
Bruce Phillips, CEO, Harshman Phillips & Company
Based in Atlanta, HPC began as a traditional audit and tax practice. Today, HPC is a Platinum Xero Partner and specializes in CFO business consulting, U.S. tax planning and compliance, Xero setup and conversion and SaaS back-office solutions.
Bruce Phillips: A unique leader
Bruce Phillips is co-founder of HPC and brings a unique background to the firm. Prior to founding HPC, he was an audit manager for a Big Four firm. He was first introduced to cloud technology while serving as a CFO and COO of a digital media technology company. When he returned to HPC in 2008, he implemented much of the technology he was exposed to while working in the digital media industry.
Prior to Xero
HPC used Peachtree exclusively for client engagements until moving to a hosted QuickBooks desktop solution in 2008. Still, the accessibility, collaboration and cost savings now synonymous with cloud products hadn’t yet been fully recognized. HPC and its clients had to navigate a myriad of desktop-based obstacles:
Compatibility. Different parties working on different versions of the desktop solution created file compatibility issues.
Logistics. Because it was difficult to transfer files electronically, HPC had to often visit clients to receive their accounting files.
Printing. Even after receiving the files, it was still complicated to print and save locally from the hosted environment.
Accessibility. The desktop solution required multiple logins.
High cost. The desktop solution required individual licenses for each user.
Complexity. Working in the desktop solution proved very challenging for non-tech-savvy clients.
The move to Xero
Bruce realized that the cloud was the way of the future. And while attending an accounting conference in late 2011, Bruce met Xero CEO and founder Rod Drury. Rod shared his vision with Bruce — the idea that Xero could be used as a tool that improves the way accountants and SMBs work together. The conversation left such an impression on Bruce that he signed up for a Xero account when he returned to Atlanta the next day. It was the automatic bank feeds — and concept of zero data entry — that resonated with Bruce.
HPC: Two years in the cloud
Since adopting Xero and other cloud solutions in late 2011, HPC has achieved an annual top-line net revenue increase of 100% while increasing FTEs by only 8.5%. HPC’s success stems from the changes to its business model that were made possible by cloud technology. Prior to its transformation, about 50% of HPC’s revenue was attributed to tax preparation; 30% to accounting, bookkeeping and advisory services; and the remaining 20% to audit. In the two years since, HPC has sold its audit practice and now drives 70% of its revenue through accounting, bookkeeping and advisory services and 30% through tax preparation.
"We were mostly an audit and tax firm for many years. These clients came back every year but we wanted to take these annual services and provide them monthly in order to generate recurring revenue and consistent cashflow. Secondly, we wanted to be closer to our clients by providing more value and advising, versus just doing their tax return."