Save content
Have you found this content useful? Use the button above to save it to your profile.
Practice Excellence Award
AccountingWEB
Practice Excellence and the cloud

Practice Excellence and the cloud revolution

by
23rd May 2016
Save content
Have you found this content useful? Use the button above to save it to your profile.

Fresh from the lectern at the recent Accountex event, John Stokdyk shares his latest findings about leading accountants are exploiting online accounting.

Compared to other countries the UK accounting profession was a little slow on the uptake with cloud accounting, but since we first spotted firms going online in 2006, they have more than made up for lost time.

Because of incentives within the tax system, a huge proportion of the 5.5m limited companies operated in the UK are one- or two-person personal services companies such as freelance consultants and software contractors. This sector helped to stimulate a very lively market for entry-level bookkeeping systems, with local independents such as FreeAgent, KashFlow and Clear Books setting the pace for early growth.

But the UK also enjoys a favoured position as an international crossroad in the accounting software market. When Australian developer Reckon One decided to expand internationally, this country was its first stop - as it was for Xero back in 2008-9.

European developers like Exact also look to the UK as their next stepping stone, and when Intuit stirred from its north American lair, the UK was the first international landing point for QuickBooks Online - making us the one territory served by all five of the international cloud contenders.

This means that we get to see an awful lot of cloud applications - and related marketing activity and education. All of the cloud developers emphasise the link between online collaborative clients and the “trusted advisor” approach to providing business advice rather than compliance services.

Thanks to AccountingWEB’s Practice Excellence Programme, we have five years’ worth of data to confirm that practices embracing cloud tools are the ones moving fastest down the advisory path.

For the past couple of years Practice Excellence Award entrants have shown that cloud accounting is a starting point for improving client service. A closer look at the different initiatives firms have undertaking show basic cloud accounting has featured among 42% of entries for the past two years.

Practice Excellence trends 2014-15
AccountingWEB

The emphasis on client grading and segmentation dropped slightly last year, and was accompanied by parallel dips in strategic advice and management information services - typical indicators of a proactive, advisory approach.

This rough analysis should not be taken as a sign that the trusted advisor model is going out of fashion. Pathfinder firms are still undertaking this kind of work, but the big rise in marketing related activities such as content marketing, events, social media and website upgrades suggest that leading firms are putting a lot more effort into telling the wider world what kind of services they can offer.

Combining the general trends illustrated by the chart above with a composite constructed from the firms shortlisted for last year’s awards, here is a simplified, step-by-step formula for Practice Excellence

  • Refine services around specific client needs - time and again, we hear from pathfinder firms about how they took the time to get off the daily hamster wheel and to really think about their client base, their strengths and where they wanted to take the firm. This clarity was the first step to rolling out a new strategy, and in many cases, it takes the form of a very conscious commitment to explicitly expressed brand values.
  • Get team buy-in and talent strategy right: compatible staff as well as receptive and enthusiastic clients are essential to Practice Excellence, and most of our entrants devote a lot of concerted effort to recruiting and training first-class people to deliver their vision.
  • Research and invest in technology - Here’s where the cloud comes in, by providing a bedrock for the new, proactive service model. Basic cloud tools are pretty much a given in the Practice Excellence world, but cutting-edge firms are continuing to experiment with innovations such as helpdesk tools to manage client queries and monitor satisfaction levels.
  • Promote the brand. Once they’ve got the winning formula in place, Practice Excellence pathfinders focus on getting the message out to the market. The top initiatives among last year’s entrants included:
    - Active referral strategy
    - Social media
    - Website & SEO
    - Content marketing
    - Events (seminars & webinars).
  • Measure the results - both for tracking new client conversions and overall client satisfaction.

Even among the shortlisted firms, the final point about measuring marketing activity and client satisfaction is not universal. But it should be. If there is one principle above all others that emerges from the Practice Excellence Programme, it would be that successful accountants bring their analytical and advisory skills to bear on their own businesses.

The elephant in the exhibition all at Accountex was HMRC’s making tax digital initiative. We will have to wait until after the EU referendum to get a taste in what is going to happen, but ministerial statements have made it very clear that HMRC is jumping on the cloud bandwagon and that all businesses will be expected to file revenue data drawn from electronic accounting systems (not Excel).

There’s no question that MTD represents a significant challenge to practices that have not yet joined the cloud revolution. But the message from AccountingWEB’s Practice Excellence Programme would be that if you worried about HMRC or software providers muscling in on your clients, the best way to counteract that risk is to start strengthening your relationships with them now by checking that you are giving them what they want beyond the basic accounts and tax preparation service.

To find out more about the Practice Excellence Programme and enter this year's awards, visit our Practice Excellence site.

Replies (0)

Please login or register to join the discussion.

There are currently no replies, be the first to post a reply.