Xero: 10 ways to modernise accounting in 2015
We’ve wrapped another successful Xerocon. The overriding theme, in addition to exciting partnership and product updates, has been what it takes to go “beyond accounting.” To go beyond is to strive to take full advantage of the tools now available and using them to streamline business practices across the board.
In the closing keynote, Amy Vetter, Xero’s Global VP of Education & Head of Accounting, offered some valuable insights on how to modernise accounting. She offered 10 ways accountants can overhaul their practices to become a digital-savvy “Connected Advisor.”
1. Realise that small business is a big market As accountants, don’t disregard the opportunity that small businesses present. These businesses spend trillions of dollars and are responsible for job creation. And small businesses that use Xero are three times more likely to stay afloat than those that don’t. On average, Xero can decrease the average time it takes to get paid by vendors from 41 to 26 days.
2. Remember that time isn’t just money In the world of accounting, time is traditionally the inventory. When you are charging out your time in six-minute increments, there will be a limit to how many minutes or hours that you can bill. There needs to be a move towards fixed billing based on value and away from the “time as inventory” model. Clients are prepared to pay for your expertise and the value you bring to their business.
3. Become a connected advisor To move from being an accountant to becoming an advisor, you need to go through a few steps. You can start by moving systems and processes off of desktop software (or filing cabinets), to cloud-based options. People already expect their businesses and services to be available where they are. That means on their phone on the go. Or at work on one computer, and at home on another. Don’t let your systems hold you back from keeping up with your clients.
The aim of making this digital transformation, according to Vetter, is “to get ahead of the business and take control, so it doesn’t take control of you.” The rate of digital change doesn’t seem to be slowing down, nor does the amount of work clients expect of you.
Becoming a Connected Advisor means staying ahead of your clients on the technology curve. Lead your clients rather than be led by them. Select the right cloud platform, staff for success, and create efficient internal processes. As a Connected Advisor you will achieve fixed-value pricing, use online e-sign documents, use Skype or live-chat for your client communications, and rely on software to facilitate the real-time syncing of data. Doesn’t sound so bad, does it?
4. Automate to free up time Even when moving toward fixed pricing and away from your time inventory, it still takes time to work with clients. The more procedures and processes that can be automated, the more time you will have to build your business and secure more clients. “Becoming a connected advisor,” says Vetter, “means that anything that can be automated will be. ”But despite the automation factor, it’s still up to you to add those tools to your own skillset and business workflow.
5. Start small Despite the very best of intentions, you can’t expect instant results. Especially for those with an established accounting practice or system in place. iIt will take some time to make the digital shift in order to achieve long-lasting results. “Pick one or two things to increase the efficiency between all of the accounting functions that are occurring in your business,” advises Vetter. Starting small is the key to making big shifts.
6. Embrace technology to create new opportunities Leveraging new technology opens up the opportunity to work smarter, be more efficient and more profitable. It will help improve your collaboration with clients and make the work more enjoyable for you. Embracing the latest technology will go a long way toward helping you to attract the new generation of digital-first clients and employees: the Millennials.
7. Set the right expectations Again, given some of the legacy systems in place, the modernisation of accounting won’t happen overnight. For most, it will take some time. Different people will have their own expectations in terms of value and time — which need to be as realistic as possible. Different segments of a business can be helped in different ways:
Management: a business plan is key to managing the right metrics and understanding that the process will take time. Staff: help them overcome the fear of change by showing them how the changes will improve both their work and quality of life. Clients: explain how cloud-based accounting solutions can help create a win-win revenue model and add value to clients’ engagement with your business in new ways.
8. Creating the next-generation firm “You’ve got to think about how you’re going to attract the new generation,” says Vetter. The Millennials now outnumber both Gen X and the Boomers in today’s U.S. workforce. The technology you implement and use has the ability to help you to attract the next generation of talent. It can also attract up-and-coming startups and other small-business clients that will create longevity for your firm.
9. Use a connected practice strategy A connected practice strategy will allow you to create a win-win model with your clients. “Partnering for success,” explains Vetter, “means creating a human relationship, being social, marketing yourself as a lifestyle advisor or spending coach. Offering all kinds of different services in an automated way. Once you can get all of the backend technology together, this actually creates power for you.”
10. Business Performance Dashboard “Maybe you haven’t been an expert on ratios before,” says Vetter, “but understanding the different KPIs in various industries allows you to better explain to clients how they’re doing.” New features included in Xero’s Business Performance Dashboard can help. It incorporates detailed analytics reporting that, at a glance, can show you a series of simple metrics and graphs that reveal how your accounts are performing.
To modernise accounting in 2015 and beyond you have to leverage technology to work smarter, not harder. It means focusing on offering clients more overall value for their money — and not just more of your overburdened time.