Today's Technology for Tomorrow's Firm.
Issue link: https://cpapracticeadvisor.epubxp.com/i/382390
September 2014 • www.CPAPracticeAdvisor.com 31 COVER STORY While some might say this fantastic array of technolog y is ma k ing life easier for accountants, giving them time to focus on analysis and fore- casting and allowing them to take the occasional day of, others might argue that technology opens the door to a more esoteric practice of accounting, one not so ea s y to per for m a nd a challenge to sell to clients. W h e r e d o e s t h e 21 s t C e n t u r y accountant begin when it comes to recreating the accounting practice to embrace what technology has given? CPA Practice Advisor pursued this topic with Rod Drury, New Zealand-based CEO of small business sofware pro- v ider Xero, to learn if accountants "down under" know something that U.S. accountants have yet to grasp. CPAPA: In what ways do technology- sav v y accountants work w ith their clients that they couldn't do before? ROD DRURY: Accountants are moving away from just compliance and can now keep a real eye on the business. Under the old model, the accountant would just do the books when the fle arrived. With cloud technology, the accountant can see exact ly what's going on at any time. Having a single copy of the data is the key to unlocking value added services. Once they have ac c ou nt i ng sor te d we a re se ei ng accountants become add-on special- ists, adding line of business applica- tions on top of accounting. CPAPA: How does cloud make a dif- ference? RD: Cloud is an enabling technology. T he capita l cost of sta r t ing up a n accountancy practice used to be huge. Now everything you need to run your practice - email, accounting sofware, doc u ment m a n a gement – it 's a l l available on a monthly basis. Tere's almost no capital required to kick of an accounting practice. Barriers are coming down - there are lots of cases where people in slow moving practices who can see the industry in transition are peeling out and starting their own practices in the cloud. CPAPA: How do you see the accounting model changing? RD: We're seeing accountants going to a monthly billing relationship. W hat normally happens is the accountant comes up w ith three pricing tiers, ofering diferent services with each level. For example, one level might include end-of-year fnancials, monthly reports and a tax review, keeping an eye on the client. It's important to lay out the expectations on both sides. Perhaps you expect the client to take care of the bank reconciliation and other daily tasks. If the client doesn't do their homework, then ofer to move them up to the next level - generally the clients are likely to say that's all right. CPAPA: W hat are the advantages to moving to this type of monthly billing model? RD: First, there's much beter cash fow associated w it h get t i ng pa id each month. Te accountants have a goal of getting all of their costs covered by mont h l y c ont r a c t s . R a t he r t h a n working for an hour, this model cap- tures the value of the ser v ice. The accountant has more time to either provide more value or look for upsell opportunities. You now have a direct relationship with all customers, talking w it h t hem e ver y mont h , a nd t he opportunity to do more exciting work. Te accountants really get to use their br a i n to he lp t he s m a l l bu s i ne s s owners. CPAPA: What are the frst steps toward moving to a 21 st Century accounting practice? RD: Lack of technology has been what's holding everybody back. Te online accounting products are all prety good now — it's time to get in and get some experience, and then be on a platform where you can log in directly from anywhere. Move to bundled services for compl ia nce work a nd set up a monthly billing structure. The 21 st Century Accountant - A Q&A; with Jennifer Warawa By Gail Perry, CPA - Editor-in-Chief Jennifer Warawa, vice president & general manager, Sage Accountant Solutions at Sage NA , shared her views on how the 21 st Cen- tury accountant is evolving. CPAPA: In what ways do technology- savvy accountants work with their clients that they couldn't do before? JW: Tech-sav v y accountants are uti- lizing new solutions, especially cloud solutions, to make real-time recom- mendations for their clients, and those recommendations extend way beyond just compliance and tax. For example, they can advise a client that when they see a cash-f low issue on the horizon before it even happens. By having any- time, anywhere access to real-time client fnancial data, the accountant is beter positioned to become a true partner and more valued advisor to their client. Tis allows the accountant to take on a more active role in the client's business, such as business planning, development of budgets or providing feedback on an upcoming marketing campaign. The possibilities are endless, and the real enabler for the accountant developing this repertoire is technology. CPAPA: How does cloud make a difer- ence? JW: Cloud is ever y thing to the 21 st century accountant. Client demands are changing and we have a plan to meet these needs, and support accountants as they also meet these needs. The plan centers around utilizing cloud tech- nology to connect with their clients, and ultimately their data, to drive deeper, more meaningful and impactful relation- ships with their clients. Utilizing cloud technology also positions the accountant as someone a young business owner will be attracted to, creating a whole new client profle, and revenue stream, for the frm. CPAPA: How do you see the accounting model changing? JW: Accountants can no longer stay relevant by ofering the same old once- a-year tax services to clients. It has to be more than that. Clients want to work w ith someone year round, and w ith someone t hat ca n help t hem better ma nage t hei r busi ness. It ca n seem daunting to change everything about the cur rent business model, but it's becoming essential. It will likely take some time and some education, as it can be d i f f ic u lt to a l l of a sudden sta r t ofering value added services to clients. Firms must develop the necessary sof skills, and develop a realistic vision for what they want their frm to become. Building a vision and strategy for a frm's busi ness model a nd f i nd i ng a good education program that can help them get started on the path to success are two key elements to supporting this transi- tion. CPAPA: What are the frst steps toward moving to a 21 st Century accounting practice? JW: There is no shortage of amazing te c h nolog y to he lp a n ac c ou nt a nt become a 21 st century practice. What is equally important is how a firm uses technology to deepen their relationship with their clients. I believe the frst step is building a vision for the frm, and then a strategy to how they will bring that vision to life. Adopting cloud technology alone does not make a frm innovative if they don't innovate in the way they serve their clients.