Farnell Clarke's race to the future
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Francois is a writer, editor and broadcaster specialising in business.
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Novel fee structure?
I seem to remember a certain 'boot camp' from 20 years ago recommending this!
Fixed fees with free advice
I formed my new Practice Pearson & Associates in August 1995. Three years later or so, in 1998-99 I moved us to fixed monthly fees with bundled free telephone, email and face to face advice.
The definition of Novel is "new and not resembling something formerly known or used". So I am with Vaughan - perhaps the adjective applied should have been "atypical".
Adrian
www.checkmybooks.co.uk
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So this guy does pretty much what everyone else does then?
Fixed fees, looks after the client, and using cloud software.
Whoop do whoop.
Quite frankly if there is anyone NOT doing this it would be more of a story.
And the coffee!
At that time much was made about us having a decent coffee machine and clients dropping in for a cuppa!
Now tell us about innovatively systemizing our processes and the benefits to be found.
Dare we mention his name...... google 'Ron Baker' and you will get that same feeling when as a child you found out that the Romans had central heating.
I do think that it's novel
It's novel in the sense that the flat fees are pretty all encompassing. The point is he moved onto the cloud in '09. The moral of the story isn't "cloud" -- it's early adoption. It's about an attitude of doing business.
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Its not novel Francois, its the standard model to charge fixed fees and treat clients in this manner.
Nothing in this guys press release is new or different, apart from being a relatively early adopter of cloud if he went all in with Kashflow in 2009. We had clients on it in 2009 too, but switched most of them out to Xero around 2011 to 2012.
Presumably as they are now owned by one of the big players (who I wont name), this release came from them?
I know you have to think of the advertisers, but if you are going to edit this site please do take account of its long standing members who have been running business in this period.
Yep
We have been quoting per client for the year ahead, to include any contact, since April 2008 and adopted a Cloud only policy 4-5 years ago. Hate to admit it but this all started after reading Ron Baker's book about dumping the timesheet, provided free of charge by the ACCA.
I speak to lots of practices and, as said by Adrian, these approaches are still atypical.
Early days yet but I'm left wondering what the reaction would have been to this article had it been posted 5 years ago.
Thanks for feedback
The thing I was looking forward to most having been asked to share our experiences was the feedback we would get to see from fellow AW members. As a business we are and have consistently delivered 35-40% year on year growth and we often get asked what we put this down to and for us that is our approach. Which is in essence our approach to fees, our service model and our use of technology. Of course we are not unique but if everyone was doing what we do surely our growth would be shared with other firms with a comparative offering. My own view is that everyone id not doing cloud and far from it, having 10-20 clients using cloud software is not using the cloud, my guess is if we take something like Receipt Bank less than 10% of the firms in the UK are using this or similar technology, for me this application is central to a new way of working yet they are only touching the surface of the accessible market right now.
Look at the software providers directory of partners there are not that many Platinum, Gold partners etc, which suggests most firms are applying cloud across there client base if we accept there are circa 30,000 UK firms?
I guess the other thing is that the people reading this feature and AW content are perhaps those firms that are already looking to the future and adopting new service models, so of course a lot of what we do won't be so different from the norm for these firms but it is the majority that continue to bury their heads and believe the traditional fee and software models are sustainable that I believe are at risk, if they don't make a change.
Will
Off the cloud
I have now moved off the cloud as clients could not do as good a job as my book-keepers nor is cloud software as good as non-cloud software.
@AccountingWeb
I have now moved off the cloud as clients could not do as good a job as my book-keepers nor is cloud software as good as non-cloud software.
See, that's the article that you should be publishing, somebody who is bucking the trend...
My experience ....
I have now moved off the cloud as clients could not do as good a job as my book-keepers nor is cloud software as good as non-cloud software.
Precisely. Only bigger clients would go with the Cloud concept once I have trained their in-house book keeper who then goes the whole hog and I then lose the client.
novel - all encompassing...
Francois...you may benefit from asking a few of your members what they include in a fixed fee...I would dare to suggest that no firms that have fixed fees in place charge for phone calls/meetings over a coffee or an email....you are getting confused with solicitors.
An unexceptional article about an unexceptional business model. At least Bob with his provocative claims and absurd and contradictory 'solutions' has you thinking.
Bucking the trend?
Seeing as trend A has been around for 35 years and trend B for 5ish (or 0 for a huge number of firms), how can going back from B to A be bucking the trend?
Although I consult for a Cloud accounting company, I'm only a few years off retirement and so, with my objective, practice hat on and 35 years experience of trend A, if an accountant can't take advantage of the benefits of Cloud accounting it's not Cloud Accounting's problem.
Bucking the trend.
how can going back from B to A be bucking the trend?
Because the trend is to go from A to B.
Cloud
The cloud has its place but as MJshort suggests its not for all businesses. Some make more of a mess on a software package its easier to keep them on excel.
Receipt bank,again mixed feelings on that. It works for some of our clients but not others.
We do use fixed fees, but each is tailored to every client. You provide the best service possible, give as much help and advice as you can and charge a reasonable fee. Pretty much what everyone does, i assume.
Growth, we had a number of years at 50%, but are now steady at 20% a year with no marketing, mainly referrals.
What does the future hold... not sure, but when i speak with other accountants who have been around longer than me there has always been the next thing that is going to kill the industry. Just keep adapting with any changes.
Bad Cloud
"Cloud" is hardly a new trend-does anyone remember life with distributed data on Unix servers/AS 400s etc
Its just going back to using PCs as dumb terminals.
(In case anyone wonders about my computer ability I spent the 90s analysing and programming risk management software in 4 computer languages for international banks before going back to Accountancy in 2003)
What are the 'benefits' of cloud accounting-not these items?
1. Spend more time correcting client's mistakes rather than putting in data correctly yourself
2. Slower software processing even though we have 60Mbps broadband
3. Software that isn't as functional as a PC based system.
4. Lower fees s the client think they are doing your job.
5. Lower profits as you make less from book-keeping
6. Ill-informed clients who believe their own numbers prior to you correcting them
Bad cloud
My experience precisely. Clients become instant experts as soon as they adopt Cloud. Sadly it's guys like us who have sort put the mess at no charge to the client who of course will never admit their shortcomings. They tell you " it's what We are paying for!""Cloud" is hardly a new trend-does anyone remember life with distributed data on Unix servers/AS 400s etc
Its just going back to using PCs as dumb terminals.
(In case anyone wonders about my computer ability I spent the 90s analysing and programming risk management software in 4 computer languages for international banks before going back to Accountancy in 2003)
What are the 'benefits' of cloud accounting-not these items?
1. Spend more time correcting client's mistakes rather than putting in data correctly yourself
2. Slower software processing even though we have 60Mbps broadband
3. Software that isn't as functional as a PC based system.
4. Lower fees s the client think they are doing your job.
5. Lower profits as you make less from book-keeping
6. Ill-informed clients who believe their own numbers prior to you correcting them
Cloud vs Non-cloud Bookkeeping
4. Lower fees s the client think they are doing your job.
5. Lower profits as you make less from book-keeping
6. Ill-informed clients who believe their own numbers prior to you correcting them
I see what you mean, but funnily enough, I find it makes the clients more aware of their shortcomings and of the work that we do. On Xero, for example, it is clear when they have failed to update bank feeds or allocate bank transactions and it makes clear what the difficulties are when they have to ask us how to do things.
Yes, you lose the bookkeeping work, but quite frankly, who wants it?
@Paul
My point being that it is common to hear of people moving TO the cloud. We don't hear many stories of people moving AWAY from the cloud. I think moving in the other direction IS bucking the trend (and that's why I think it would make a more interesting article than this one).
@mjshort
Just for a little balance here.
1. Not if you educate clients, which is now much easier on the Cloud;
2. Not here it's not, even on 3G;
3. My clients get all they need and more in the Cloud, including Fixed Asset register, auto depreciation, shareholder's register, dividend documentation, auto bank feeds, FRS V Std VAT reports.
4 & 5 Was a godsend to reduce the time on sub-standard work like bookkeeping and replace it with more valuable work, making the same or more fees overall, in less time.
6. Who ill informs your clients? See 1.
@mjshort
I totally agree with Paul - unfortunately (for you?) cloud is the future whether you like it or not!
I'd love you to show me a desktop package that's better than a cloud one - let's just hope you're not referring to S*ge.
Clients could not do as good a job as bookkeepers? Of course they can't, that's why bookkeepers do what they do. Why can't your bookkeepers use cloud software?
And you make less from bookkeeping? Maybe you should charge more for it then.
I am aiming for my practice to be 100% cloud over the next month or so and my fees have never been higher.
VT is better than any cloud programme at what it does
I'd love you to show me a desktop package that's better than a cloud one
VT, as an integrated bookkeeping/final accounts programme, is better at what it does than any cloud programme. I use it in those cases where it is more appropriate than Xero, Clear Books etc.
Moneysoft Payroll Manager is better than any cloud payroll programme I could find.
Flexible billing is better
Customers like fixed prices. Though what does fixed pricing cost to small practices? I'd say tons of work and not so big profits. Setting low fixed prices, many accountant practices then try compensate with more customers. And even though the workload increases, they most often prefer to not hire extra personnel. This lead to mistakes. That is the reason I changed my accountant twice. Now I prefer to pay little bit more (I'm also considering hiring one of big fours) and have all my accounts perfectly managed. No disrespect for the small practices, but some of them should start being realistic and admit that there are some limits of how many customers they can handle. My point is - flexible billing is the key to the perfect relations between a business and an accountant practice.
Fixed fees or Fixed fees
Hi John - I think you are drawing the distinction between "shopping list" fixed fees, with no differentiation between individual clients, and tailored Fixed Fees, sometimes known as value pricing, eg Your fee for the year ahead will be £X,XXX, based entirely on the client's needs and a judgment over how much that client values the services compared to another client.
You are right, reading some of the above it's not clear on which side of the fence some people sit. I have always been on the value side but that suits how I work, there is actually no guarantee a shopping list firm will lose money, but many I've come across need to think of a figure, then add 10%.
In my experience, when somebody switches accountants several times this is usually a symptom of a problem client rather than problem accountants.
Its nothing new
There is nothing new under the sun, BUT Will makes good points, just to underline what most of us know, but don't put into practice.
Its Working for Him - Be Happy
Why can we not be pleased for and even congratulate a fellow accountant who is doing well. Maybe his approach is not unique but it appears to have been successful. Let's stop snipping and be pleased for him
So I think we are all agreed...
The headline phrase, 'novel fee structure' is inappropriate!
I
As I am not an accountant, but work with many, it is interesting that all of the negative comments come from the side of the accountant and, as someone who has also been a client of WIll's, he is successful because he has looked at it from the side of the client.
You can sit there and moan about how much it does not work for you and all of the flaws that you perceive/see, but by looking at it from the other side, accepting the criticism (justified or not) and making change is the route to growth and success.
Accountants are no different to any other business - they need to adapt, develop, market themselves and respond to the outside world.
Thank you for the inspiration Will!
Articles like this inspire young accountants like us - We are in early stages of developing into a bigger practice - While we agree Cloud is the future we also think software providers are increasingly putting the prices high so we have taken the step to implement our own - it's going to be tough competing with big players like free agent, Kash flow, Xerox etc but we certainly can offer bottom prices rather than burdening clients with additional software cost.
Like to know from Will whether he thought about developing his own software rather than being a re-seller.
@chatman
I may have to agree with you about Moneysoft - the only cloud payroll provider I know of is Payroo and that's a shocker.
However I disagree about VT - yes it's a great final accounts package but as far as bookkeeping is concerned compared to the automation of importing bank statements then using cash coding on something like Xero there IS no comparison.
VT is better than Xero
I may have to agree with you about Moneysoft - the only cloud payroll provider I know of is Payroo and that's a shocker.
Hi Jaybee - Yeah, I tried Payroo too, because I really wanted something on the web (I would love it if VT went cloud), but it just couldn't compete with PM.
However I disagree about VT - yes it's a great final accounts package but as far as bookkeeping is concerned compared to the automation of importing bank statements then using cash coding on something like Xero there IS no comparison.
I did say "at what it does". It is not better at what Xero does than Xero is, but it is better at what VT does, which is integrate the bookkeeping with the final accounts. For a simple client who submits correctly analysed data quarterly and just wants VAT returns, payroll, CT600 and statutory accounts it is far cheaper and faster than Xero. How long does it take you to get from TB to final accounts in Xero? In VT, it could be seconds; minutes if there are adjustments to be made. And how long would it take you to book the tax in the final accounts and reflect it in the Xero ledger? In VT, the journal goes into both the ledger and the final accounts in one go. VT even does the tax comp for you. Xero would take at the very least and hour longer, and that is for the most simple set of accounts. Actually, some of teh bookkeeping functions are better too; eg you can reverse a VAT return.
Don't get me wrong; I love Xero. It's just that VT is better at what it does.
@chatman
I have to agree with you, and I guess until final accounts come into Xero it will be quicker.
I suppose what I really meant was that day-to-day bookkeeping is always going to be quicker on cloud than it is on desktop for various reasons - it was really in response to the earlier comment 'dissing' the cloud which, for me, has transformed the practice.
But you're right - until we get a GOOD cloud payroll system plus final accounts in the cloud directly from bookkeeping, then it won't be quite perfect...
I think VT have said they WON'T be going 'cloud' didn't they?
Nationalise Philip Hodgson
I think VT have said they WON'T be going 'cloud' didn't they?
Unfortunately, yes. Philip Hodgson needs to be nationalised immediately and forced to do a web-based version of VT. There are some things the private sector just can't be trusted with.
Every Cloud has a silver lining - or does it?
Experiences of the Cloud will differ according to both the user approach and the Cloud based offering. Cloud really just means sharing programs and data across the internet with the central processor hosted in a variety of different ways.
VT is simply Excel based technology and therefore is as shareable as Excel even if Phillip Hodgson chooses not to create his own hosted Cloud offering. Any practice can use their VT in a Cloud based environment, allowing access to office based or home working staff and clients.
I personally use our own Cloud hosted by Azure for our own software and Microsoft. I no longer practice but serve a handful of clients and our own PI brokerage. The advantage I derive from the Cloud is that I rarely need to visit clients or they me, I can work from home, which is over 100 miles from my nearest client and I can still work when based in the Caribbean for some of the winter months.
Long live the Cloud and enjoy yours.
Well done Will
...sounds like your business is doing very well and going in the direction you want it to.
I do think the article is poorly written though and demonstrates a limited understanding of what the majority of active AWeb users are doing and talking about.
Plenty are using cloud software, mind you I'm not sure how you would move your practice to the cloud?
Is it somewhere near Milton Keynes?
@peterhool: using the cloud
@peterhool: Hi Peter - I think you are probably doing much the same as most of the people on AccountingWeb. I would imagine most of us can probably do our work from any in the world with an internet connection and are not forced to visit clients.
Clients making a mess of their books
Quoting from qhas's post above:
"Clients become instant experts as soon as they adopt Cloud. Sadly it's guys like us who have sort put the mess at no charge to the client who of course will never admit their shortcomings"
In my experience the cloud has nothing to do with this, the fact is, if you leave an inexperienced client alone with any sort of accounting software, desk or cloud, they will make some sort of mess with it.
The point is that the mess is now so much easier to spot and correct as you can see it happen as it happens and can point it out to the client, educating them and ensure they don't make the same or similar mistakes in the rest of the year.
More importantly, in any practice I've ever been associated with, no inexperienced client has ever been left alone with accounting software, desk or cloud, we have always trained and supported them only, again, this is now many times easier to do as we can actually restrict access to anything we don't want them to get involved in and only release it to them as they get used to the bookkeeping, this was impossible when the software was sitting in their office.
It might be that qhas is talking about a client coming to him/her for the first time, having been using their own software, ie nothing to do with qhas, but, again, this used to happen all the time with desk software, the problems are identical.
What puzzles me is why s/he would correct the books free of charge, clearly s/he didn't [***] up the books so why do it gratis and, if the client is silly enough not to take responsibility and to correct under my instruction (for a fee) or ask me to correct (for a bigger fee), then they can go and pester someone else.....maybe qhas?
I know this is getting boring (and I'm not picking on qhas - honest) but when s/he refers to training up an in-house bookkeeper and losing the job, how does that differ from pre-cloud days. It happened to me several times.
Unless I'm making the wrong assumptions, the fact is that if you charge a client for doing something that they are perfectly willing and able to do themselves then, once they discover it, why would they need you to do it? Like bookkeepers have been doing for several years now, as more and more businesses do their own books, they are re-training in more advanced work like accounts prep and tax, why should it be any different for traditional accountants?
Speaking to a few accountants the other day, and asking them about their views on Cloud software, one said that they had picked up several clients using it but had yet to spend any time seeing how it worked or how the clients were doing and another said that she too had one or two using it but, seeing as she never got involved in what software they picked to do their books, she didn't care one way or the other.
The prime benefit of cloud software is in enabling us to get involved in real time and to help produce up to date & accurate books, what's telling is that the businesses get it.
Client Visits and Teaching
Chatman-"are not forced to visit clients"
I think that visiting clients is great for building lasting relationships and picking up referrals. In fact one of our KPIs is the number of client visits (along with referral requests). This seems to be working as our business has grown 88% in the last 3 years.
Paul Scholes- We have found that cloud software corrections took up too much time and is to inaccurate. Can you not do a better set of books than your clients-we certainly can? Also VT+ is faster than any cloud software and Sage (non-cloud) is better.
Maybe people spend all their time training their clients, do you use specialist tutors, I could not do it -my daughter is the teacher not me- I'm a Chartered Accountant.
Misunderstanding
Chatman-"are not forced to visit clients"I think that visiting clients is great for building lasting relationships and picking up referrals
I absolutely agree with you and I visit clients as much as possible. However, I don't have to visit them just to get data or to look at their records.
Once an accountant always an accountant?
Paul Scholes- We have found that cloud software corrections took up too much time and is to inaccurate. Can you not do a better set of books than your clients-we certainly can? Also VT+ is faster than any cloud software and Sage (non-cloud) is better.
Maybe people spend all their time training their clients, do you use specialist tutors, I could not do it -my daughter is the teacher not me- I'm a Chartered Accountant.
With regard to cloud software corrections taking too much time, again I'm a little puzzled over why this would be any different in the cloud than on a desktop. Perhaps you haven't tried the right cloud software yet? As I say above, the whole object is to get to the point where there are no corrections needed, surely that's in everybody's interest isn't it?
So if I have a client who, despite my best feedback, makes the same mistakes year after year then they may be willing but they certainly aren't able and so should either go to work with you, or get themselves a bookkeeper.
The vast majority of my clients prepare 90% or more of their own bookkeeping (and all do their own payroll and dividend administration) and I hardly spend any time now correcting or adjusting the books either during the year or at the year end. So, I'm guessing, in a similar way to VT, I have a TB, which matches the chart of accounts in Iris, and takes a few seconds to import with accounts & returns following soon after.
Yes, in most (but not all) cases I could probably keep the books at least as well as they do but, and it's a big but, I don't want to, I have better things to do plus, as I said above, if a client is willing & able to do the work why should they pay me to do it.
Your next point about training left me a bit bemused. I don't know if you have staff but do you just appoint them and let them get on with it or do you train, guide & support them? I know a few Chartered Accountants and they all seem to do it OK.
I certainly don't spend all my time training clients, It's a setup then support activity that they pay me for (at a higher rate than bookkeeping) with the object being to educate them, I can't believe you keep all the mysteries of accountancy and tax to yourself, surely, even as a Chartered Accountant, you impart some wisdom, and expect your client to retain it?
One of my daughters is a neurosurgeon and it an excellent pianist, but there was a time when she was neither. I was a Chartered Accountant, then a Chartered Certified Accountant now I'm just.....an Accountant, I suppose. When I started out I could handle personal bankruptcies, company liquidations and give investment advice, but then things changed and I adapted, with the prime driving force of trying to do stuff I enjoyed and yes, using my clients as a testing ground, I now go out and train other firms and users in Cloud accounts, as well as running a smaller practice.
So the "Chartered Accountant" plaque I had outside my office is now in my loft somewhere, I, thankfully, am not made of brass.
@mjshort
Paul Scholes- We have found that cloud software corrections took up too much time and is to inaccurate. Can you not do a better set of books than your clients-we certainly can? Also VT+ is faster than any cloud software and Sage (non-cloud) is better.
... so you're saying that visiting the client to correct it on their desktop software is quicker than sitting at your own desk accessing their account?
I must be missing something then!
I am afraid I stopped taking you seriously with your 'Sage is better' comment!