The 20% of cloud enabled firms transforming business
Today, I attended the QuickBooks GetConnected event at Dorney Lakes, near Windsor along with about 70 accountants, several speakers, 4 app providers and of course the hosts from Intuit.
What struck me was just much the accounting industry is changing and the potential to re-invent itself into an incredibly valueable service sector.
According to Will Farnell, accountants are the most trusted professionals in business and the 5m businesses in the UK are serviced 30,000 accountants. Put another way, accountants have the potential to advise or influence every business of every size, in every sector in the country.
But traditionally, accountants have provided advice on an occasional basis, often re-acting to a client question or problem and engage with clients during the annual audit. The advice offered is usually based on historic and often poor quality data and so delivered little value to forward looking entrepreneurs and managers.
Bookkeeping, once seen as a low value service, is becoming a critical offering because it allows accountants to capture huge amounts of transactional financial data on an ongoing basis. As more accountants recognise the value of having real time visibility of their client's data, they are able to deliver timely, proactive and more valueable advice to their clients.
Rather than engaging with clients once a year on a fee basis, forward thinking accounting firms can deliver value continually for a regular monthly subscription. The really smart firms, also recognise that by standardising processes and using cloud based automation tools, they can scale their businesses profitably whilst retaining their client's business.
Interestingly, another valid point made at today's event was that hugely valueable financial data is usually securely hidden away within accounting software and only accessible by authorised users such as the bookkeeper, accountant or FD. So much so, that there's often a disconnect between data used for business decisions and financial outcomes that result from the actions.
With cloud based accounting software and the specialist app ecosystems, companies and their accountants can now access this data 24x7 from where-ever they are located. Another critical fctor that is revolutionising business is the joined up nature of business processes and consequently the necessary connectivity of business software.
Once-upon-a-time, businesses would implement software to solve a particular departmental (vertical) or functional requirement. HR would have software designed for HR. Manufacturing implemented software to automate the product of goods. The warehouse had its own inventory management software and finance would install accounting software. Systems would rarely talk to each other and departmental silos of information would exist.
No longer. With a far greater focus on process automation, more businesses are streamlining and joining up every step in their profit generating 'machine', be it finding, winning and retaining customers, flexing production up or down in order to reflect demand, optimising inventory, integrating in logistics, handling customer service, supply chain, finance and a host of other functions.
The common theme? Every process that a business conducts impacts in some way on the financial performance of that company.
So why aren't more accountants extending their influence into more areas of their clients business?
Instead of simply dealing with purchase invoices, why not add value earlier in the process such as helping to set and manage budgets, enforcing POs and invoice approvals? Can accountants analytical skills help companies optimise stock levels or advice on pricing? How about working more closely with HR to guide companies toward increasing productivity and attracting the right talent in order to drive faster and more profitable growth.
So with only 20% of accounting firm recognising the importance of managing client data using cloud applications to automate processes, there's a significant and timely opportunity to release your team from manual processes to add real value to clients and extend your service offering.
There's never been a better time to transform your business.