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Adapting to the cloud: New brands

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27th Apr 2016
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One of the more interesting approaches that we have seen in the last two years is existing firms creating entirely new brands focussed on providing cloud first, fixed fee, general accounting services, says Richard Sergeant.

Although relatively small in number, this intriguing area is seen as having great potential for established firms to adapt quickly to the opportunities of cloud without major disruption to the existing practice.

In the beginning

Chris Wrighton is a partner at Harold Sharp a more traditional accountancy business, and now also director at FlowOnline. He explains there were a number of factors that combined to give them the motivation to create a new brand, including the age profile of their clients: “Some of the relationships go back for many years, and they have grown up with us”, he explained, adding “another key influence was Iris. They were pushing OpenBooks, and for some clients we thought it would suit really well”.

As seen in previous articles this is not uncommon among general practice, however they were convinced that there was a bigger opportunity “The harder we looked we saw people moving quickly - web based, fixed price, and attracting people from around the country”.

The opportunity was big enough then to look beyond the confines of the existing practice. “What we didn’t want to do is have on page 23 on our website that “we do cloud accounting”. It was such a big topic and message, we needed to handle it in a separate way”.

How is it different?

“The FlowOnline brand has been developed from a marketing point of view so we can differentiate ourselves in that market place. Its clients look at things in a different way, and this is something that will continue.”

“It is fixed priced, agreed in advance, paid monthly and clients seem to be happy with that arrangement. It’s better for their cash flow, and they are used to paying for software and services monthly already, so it’s not a big leap. It’s also good for our cash flow too.”

How it works ­- compliance and insight

“We talk about the requirements, provide them with appropriate software, and the full set of accounts and reporting they need through the year. In terms of the basic data some will do it all themselves, and sometimes we do it.

Interestingly a key part of the service is in the software selection “The advisory role initially is in helping them to select the technology rather than the debits and credits bit.”

Compliance then provides the data to fuel the relationship “We can then start looking at the reports ­ using things like Spotlight reporting ­ and feed these back to clients. This is where they perceive greater value”

Making an impact

“We use a marketing agency, who handled the website, SEO and social media. As well as direct mail via email and a series of events”, using a specialist to fuel lead generation means they can be highly effective in their targeting.

“It’s having the desired effect by attracting a younger business owner, and reinforcing the brand and image we’re looking to create”, Wrighton added.

The relationship with the existing practice

The two businesses are not expected to work hand in hand from day one, but Wrighton identified the potential benefits: “If a business grows considerably, they may need access to specialist services, for example an audit or detailed tax planning”, however there are no plans to move clients between the two readily. “What is happening here is that the experience of the service is being built upon. What we are not trying to do is move clients around”.

And what about the future

Wrighton is clear that the benefit of FlowOnline is that it increases the scope of the kinds of clients that they can do business with “People are different, while some are happy to be based in London, do it all via Xero, email and Skype, there are some clients that will always want to see me. Different services are there to adapt to different clients.”

Like others interviewed for this series, Wrighton sees potential in the transition to Making Tax Digital “If it is a case that reporting will be made more often, then there will be more contact with clients, which could only be a good thing. The more detailed the work the more there will be a need to make sure that things are just right ­ and that’s where working efficiently with clients will pay off”.

Snapshots

Mark Nichols of Cinnamon Accounting, a division of Smith & Brown, while taking a similar approach has a distinctively different agenda: “We see the role of the new brand as providing a feed into the main firm, with the aim of then helping them from a £100,000 contractor turnover, to a small business to helping them grow further.” So the micro and new business market is an essential feeder into the traditional heart of the business.

SE + Accounting from Moore & Smalley shares many of the attributes of the FlowOnline service, however the difference is rooted in a clear partnership with a single vendor (in this case QuickBooks Online). Working with slightly larger firms in this way has obvious advantages for the software suppliers in terms of scale and reach, and should provide significant benefit by the way of marketing resource and highly competitive pricing in return.

What can you take away from this?

Integrating efficient cloud first services into an existing practice is not easy, and sometimes not desirable. Providing the motivation and strategy is clearly defined, creating a separate brand could liberate your firm’s approach and help to open new markets.

Richard Sergeant is the managing director of Principle Point.

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Replies (4)

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jlsmith
By jlsmith
28th Apr 2016 11:06

Serious question. I'd be interested to know what's the process in getting such advertorials written about one's company and published in this way.  Do you pay?  Do you need to know the right people?  

Thanks (3)
Replying to gainsborough:
Francois
By Francois Badenhorst
28th Apr 2016 17:31

Thanks

jlsmith wrote:

Serious question. I'd be interested to know what's the process in getting such advertorials written about one's company and published in this way.  Do you pay?  Do you need to know the right people?  

Hi there,

Nope, that's not how it works. Richard's articles are from an everyday perspective. He's a real person involved in everyday accounting. If you think his experiences are completely invalid and you've got interesting insights into transitioning to cloud, we'd be very interested to hear from you.

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Richard Sergeant
By Richard Sergeant
28th Apr 2016 11:25

Pay me

In all seriousness, no firm is paid or pays to be in any of my articles.

I just research and look for interesting people to talk to that I think can represent a specific view of what is going on. Interviewees are selected from approaches after desk research, recommendations, and my own network. 

I do accept multiple currencies for other work, but generally quote in sterling.

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avatar
By North East Accountant
29th Apr 2016 07:29

Brand name or seperate company

I would be interested to hear from those that have done this their thoughts on why they chose  doing as a separate brand of existing business or a separate company.

Thanks.

 

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