When moving to cloud-based accounting software, it’s essential that practices validate the popularity, reliability and financial viability of prospective software solutions.
Today’s accountants face a range of challenges, not least pressure from ever-tightening client budgets. At the same time, the widespread use of mobile and tablet devices has created an expectation for faster responses to queries and problems.
In turn, many are looking to cloud-based technologies to help deliver a quicker, more consultative service – without negatively impacting on margins. Indeed, according to a recent Censuswide poll, the biggest contributing factors to the sharp rise in take-up of cloud-based, online software amongst practice-based accountants included the opportunity to cut internal overheads such as travel and data input costs (48%). Improving service and increasing client satisfaction – cited by 44% – was also a key objective.
Providing a point of competitive difference and demand from clients were also major drivers. Crucially, the research also found that, in many cases, the technology was living up to its promise. In fact 42% of practices already using online accounting software cited the greatest benefit as being the opportunity to boost service standards and improve client satisfaction.
Strategic business model
Accounting has not traditionally been at the forefront of technology change. However, the fact that more than half of UK accountants polled (55%) confirmed that they are either already using or plan to use cloud-based online tools shows growing recognition of the strong business case for the software.
In particular, with the rise in clients’ use of mobile technologies and the repercussions of the downturn still being felt, the opportunities this technology offers modern practices are extremely important, particularly when it comes to opening up new service lines.
When a client moves to online accounting technology, it becomes far easier to boost their service levels and provide timely, strategic advice – without having to increase the number of hours spent with clients or physically travelling around. This is especially true for practices that deal with small and micro-businesses.
The advantages of using cloud software to gain access to real-time information also works in the clients’ favour. For example, in many cases, small business clients often struggle to ensure that they are paid on time and tend to lack the time and visibility needed to manage their cashflow.
Rather than being supported by their accountant, the important task of maintaining credit control frequently falls to the owner/manager or other non-financial user, as it is too expensive for the accountant to visit them individually to gain regular access to paper files, spreadsheets and software systems. However, if a practice’s client base moves to online accounting software, the accountant can effectively service multiple firms’ credit control needs, without having to leave their desk.
With more time to act – and more data to act on – accountants become better able to advise clients on how they could improve financial performance. This may include, for instance, working out that the company can afford to recruit the new member of staff it needs or to invest in a new piece of equipment.
Crucially for practices, the fact that data is stored in the cloud and can be accessed at any time also affords them the flexibility to offer new value-added services that would previously have been too costly to deliver. As such, the practice benefits from potential new revenue streams while the client has greater access to financial support they can trust.
Finding the right provider
The Censuswide research also showed that some practices are yet to move to the cloud because they are waiting to see if online software takes off industry-wide before making the switch. Others fear that the technology or its supporting infrastructure may fail or not be secure.
As the pace of change towards online technologies continues to accelerate, those adopting this wait-and-see attitude run the very real risk of getting left behind their competitors. However, those who are worried about the technology itself are right to be cautious about exposing their business and its client base to anything which may prove not to be completely secure or reliable.
As such, as with any cloud-based technology, it’s essential that practices validate the popularity, reliability and financial viability of any prospective vendor and software solution. This should include finding out about their service provision record and get specific assurances on uptime (the measure of service/software availability and unplanned maintenance), which is less likely to be a risk with larger, established vendors with large customer bases compared with newer or less well-known providers.
Other worthwhile checks include seeing how active and interactive the provider is with customers and accounting partners on social networks, as well as asking for their personal experiences and views. It is also well worth finding out what technical support the software vendor offers and asking for a trial to get a feel for the product.
Wowing its customers
In 2010, The Wow Company converted almost all of its clients to online accounting and now manages around 98% online. Despite the tough economic environment, since introducing the technology the company has seen an increase in its average client value.
Rather than putting up fees, this was achieved through providing new value-added services for its small business client base. Extra services now delivered online include higher-level reporting and project work, with strategic advice on issues such as staff recruitment or tax allowances, for example.
In embracing an online working strategy as a business model, The Wow Company has realised significant internal efficiencies, streamlined the service it offers to clients and boosted choice by offering new ways to interact. Workflow Max (Xero’s online job, time and invoice management tool) is used for practice management, in conjunction with Practice Ignition, a collaboration platform that enables accountants to maximise engagement and value with their clients on desktop and mobile devices.
Xero is used for internal billing and reporting and Xero Workpapers is used for producing year-end and management accounts. Alongside these tools, The Wow Company has introduced RightSignature to e-sign all documents, from contracts and forms to NDAs.
This signature process, which previously took days or weeks using post or courier, can now be done far quicker – in some cases automatically. As well as contributing to faster turnaround of work, bringing in RightSignature has meant that, apart from the occasional birthday card, no paper leaves the office. This has brought greater security, as well as time and efficiency savings.
‘Many firms have dipped their toe in the water with online working, but this online-offline mix invariably leads to a split culture,’ says The Wow Company’s director of accountancy Paul Bulpitt. ‘The fact that we do almost everything online in a simple, logical, automated way has brought us real authenticity and credibility with clients. It's a never-ending journey. We’re constantly looking for ways to provide a better service to clients and to use technology to streamline what we do.’
Gary Turner – managing director, Xero UK