Is your Accounting firm generating leads for other firms with Cloud Accounting?

We've been running Cloud Accounting quality audits with firms for over 12 months and we have seen a worrying trend...

Cloud Accounting is being implemented in a poor manner and is essentially becoming advanced bridging software for Making Tax Digital (MTD).... Having discussed this with many firms over this period, they hadn't realised the risk they have with this type of setup - they are generating leads for other firms, we call it the HOPS (Helping Other Practices Succeed) syndrome.

So what do we mean by quality? Cloud Accounting system in place with:

  1. Real-time Bank Feed (should be less of an issue with Open Banking)
  2. Invoice Automation - connected to a ReceiptBank, AutoEntry, Hubdoc, Datamolino, Lightyear, etc.
  3. Regular processing frequency - monthly as minimum.

This level of quality setup gives the accounting firm the foundation to offer their clients comparative reporting, forecasting and offer App Advisory services such as Virtual Credit Control - essentially a much more real-time experience which can promote more relevant conversations and opportunities with clients.

I have run many audits... Here is an example of the outcome I have seen based on a firm with 250 clients on cloud:

  1. Bank feed connection - 88% connected
  2. Invoice Automation - 22% connected
  3. Processing frequency - 11% monthly or more frequent

Very statistical but let's break this down into some real terms:

  1. High level of bank connectivity to the cloud accounting system - tick in the box!
  2. Poor levels of adoption of Invoice Automation - this meant nearly 200 businesses were manually processed... We would expect this to be 80% adoption as the minimum and see between 20 & 40 still manually processing due to bespoke processing needs.
  3. Processing frequency - approx 25 businesses processed a minimum of monthly. The rest of the estate was being processed in accordance with VAT or yearly Accounts processing.

Final result out of 250 clients only 11 clients ticked the box of all 3 areas which leaves 239 clients at risk of another cloud advisor showing the client a lot of improvements to their cloud accounting estate with minimal effort.

Not sure if this is your firm? Here are some symptoms that accounting firms feel if they have adopted Cloud Accounting in the above manner:

  1. Limited improvements (<5%) in internal efficiencies 
    1. Better recovery on client jobs for example
  2. Limited improvements (<5%) in client/staff experiences
    1. The engagement for staff/clients feels no different
  3. Limited or no new services being offered to Clients
    1. Business or App Advisory for example
  4. A limited number of staff engaging with Cloud Accounting fully.
  5. The overall feeling that they just aren't where they thought would be by this point of time and not getting the return on investment.

Normally the underlying issues to the above are lack of communication (staff & clients), lack of new process adoption, lack of understanding as to where the firm is trying to head with cloud adoption and lack of accountability with an overarching lack of planning.

Is your firm suffering from HOPS Syndrome??

We facilitate over a free group with over 200 members that discuss elements of Cloud Adoption quality & building their App Advisory function. Join here - we don't even ask for your email details.

Until next time!

Matt

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