Home About Us App Advisory Accelerator Advanced Xero Training Blog Login JOIN THE ACCELERATOR Login

Is your Accounting Firm a Cloud Accounting Software Reseller or a Business Platform provider to your clients?

 With Making Tax Digital (MTD) really starting to trigger Cloud Accounting software conversations with accounting firm clients, we have started to see a trend of the software being sold and implemented in a very basic manner to businesses.

We should be looking at Cloud Accounting as a platform, not just a singular piece of software that can file an MTD return and cover basic compliance; however, that is pretty much what we are seeing. So, what is a good barometer for how we measure the quality of the platform we are giving to clients? Most firm’s barometer is "I have x amount on cloud…" That is not enough… 

The quality standards that I look to are: 

  1. Cloud Accounting System
  2. Real-time bank feed connected (where applicable but in the UK, we are soon to have Open Banking so hopefully the barriers less with this…)
  3. Invoice Automation connected (Receipt Bank, Datamolino, Auto-Entry, Hubdoc, Lightyear, etc)

Firms say to me “yes” we have this in place, my question back is “to what level have you adopted this?”. What I am looking for is adoption % of each:

  1. What % of your clients are on cloud accounting?
  2. Of those on cloud, what % are connected to a bank feed? Upwards of 80% is the level we are looking for
  3. Of those on cloud, what % are connected to Invoice Automation? Upwards of 80% is the level we are looking for

Surely that’s the end? No - one more statistic to keep in mind:

  1. Of the clients on cloud, how many are having their records processed at a minimum of 12 times per year, i.e. monthly? 

We are seeing many firms who have adopted cloud still follow their old routines and processes, the clients are still giving data at quarter end to fulfil a VAT return, or at year end for year-end accounts which means we are only receiving data from our clients 4 times or once per year.

What is the importance of this level of quality with adoption? If your firm aspires to talk more about the future of a business than the past, then this level of cloud adoption must be in place. If we are still getting data at a quarter-end, we are still processing data that is 4 months ago, yet we have tools available that can facilitate receiving data as soon as it is received.

Why do we see the lack of quality with the adoption? Quite simply, it hasn’t been thought through or planned. With the adoption of new technology, there are three aspects which must be considered: 

  1. Knowledge – we need to build knowledge of what the technology does for both the firm and the client, this is in terms of the technical elements of the software but also the business problems it solves.
  2. Process (including communication) – we need to change our processes to ensure we get the best out of the technology; we must change the internal processes and ensure we communicate this with both staff and clients.
  3. Commercial Model – with adopting the tech how do the commercials work? Are we taking this tech on to improve internal efficiencies? If so, we need to understand how we measure that improvement. Alternatively, if it is tech that we are adopting for our clients to engage with – how are we selling it? Is it part of a service we are offering or a product we give to them to manage? Again, how does the firm make money from that?

Once we have this base Business Platform level of adoption as the standard, we can move onto helping our clients build out their financial functions. With approximately 90% of the SME market having less than 10 staff, there is no doubt that they cannot fulfil an efficient and effective financial function without some help – and who best to help them? Accountants!

Building out a client’s financial function could be any of the following:

  1. Looking at how they get paid, are there any platforms they could utilise that integrates with their cloud accounting software?
  2. Do they need some sort of Sales/Purchase Approval process that can be intertwined with their cloud accounting software?
  3. What is their expense management process like? Could it be improved and linked with their cloud accounting software?
  4. How do they collect debts? Do they have a process, or do they chase the debts at crisis times? Could they utilise a system or could you offer them a service to do this? E.g. using tools that integrate with their cloud accounting software.
  5. Reporting – what are they interested in understanding more about their figures? Or what should they be interested in based on your experience? The business owner doesn’t know what they don’t know…

So back to the title of this blog – are you a Cloud Accounting Software Reseller or a Business Platform provider?

We have a free learning area on our website where you can view Cloud Accounting Fundamentals, get involved here.

Close

50% Complete

Just complete this short form and we can send you our latest content and insights.