XU Magazine - Issue 20

Virtual Roundtable: Forecasting The Future of Cloud

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Written by Damien Greathead

When Xero entered the Australian market in 2008 and kickstarted the cloud accounting transformation, they promised to shake up the landscape. More than a decade later, how has the market changed?

We asked seven of the world’s leading Xero and Receipt Bank partners to find out how the roles of the accountant, bookkeeper and BAS agent are changing…

The uberisation of the industry

Damien: What are the biggest changes right now in the ecosystem?

Adriaan: Itís actually quite hard to say. Itís like standing inside a building describing what it looks like from the outside. The industry hasnít fully embraced cloud technology. Yet for those of us who have, it feels like we all are.

Stuart: Itís also the extent of change itself within the ecosystem. Third party apps have grown rapidly and becoming increasingly aligned to a particular general ledger.

Michele: Governments are catching up too. Legislative changes like single-touch payroll are also making everyone review their entire accounting, bookkeeping and business system. In Australia, this means weíre working with people weíve never been able to before ñ be it politicians, app providers or fellow accountants and bookkeepers. Itís levelled the playing field.

Damien: So how do you guide your firms through all this change?

Michele: Do a lot of research. Ask a lot of questions and find out everything you need to know before you even start talking to clients.

I love Trello boards for writing a process down as you do it. It makes it easier for others to follow and can be customised for each client.

Alex: Totally agree. We also documented processes from day one. It’s particularly helpful as you grow the team.

Damien: What about helping clients cope?

Michele: All changes with clients are initially received with resistance. They always ask why. My answer is always the same. The government wants to simplify processes. You have to see it as an opportunity.

Will: Simplification is at the heart of everything we do. For example, weíve built an end-to-end system in Salesforce that integrates with Xero, Receipt Bank and other apps like GoCardless.

Thanks to automation and outsourcing, weíre a third of our original headcount, have doubled our revenue and grown our client base, even while churning clients who werenít interested in using cloud technology. Thatís all with organic growth and no marketing.

Mike: Having the right people is the cornerstone of our business. Technology enables fast, efficient growth yet youíre only ever as good as your people. Turnover was crazy in the days of traditional accounting. Now, we want to build client relationships that last. The question becomes that of hiring great people and retaining them.

Ian: Likewise. For me, Receipt Bank is there to make our teams bigger, not smaller. To offer high quality client touchpoints and free up time for more high-level analysis.

Receipt Bank is there to make our teams bigger, not smaller.

Thereís less and less time spent crunching numbers and more and more interpreting them. Hopefully this is why we all went into the profession in the first place. Not to be a human calculator, but a human who listens, interprets and solves problems.

Advisory vs compliance

Damien: We canít have a conversation like this and not bring up Compliance vs Advisory. Where do you fall, and does it even still matter?

Mike: For me itís important that weíre more than compliance officers for our clientsí businesses. Weíre a plug-in and play accounting department for a startup looking to scale.

Most businesses were flying blind before. Now, we can manipulate big data and offer insights that were previously unheard of.

Michele: Compliance advisory and advisory in my chosen niche, mainly. If I wasnít driving compliance, my clients would have no idea of their deadlines. Specialising allows us to align with the experts with the best fit for my clients.

Will: My clients want compliance delivered on time so they can get on with running their businesses. Itís about giving pure, objective data, which they can use to make decisions.

Damien: Do you think you can you do both?

Phool: Yes but itís a challenge, particularly as a sole practitioner. We deliver both at Gains Accountants thanks to AI and OCR technology like Receipt Bank. As compliance evolves and becomes increasingly automated, advisory work will always need the human touch.

Ian: Theyíre certainly not mutually exclusive. Compliance is a grudge purchase ñ the very last thing business owners want to buy.  But they do want someone to reach out

o who can provide peace of mind, financial clarity and add as much value as part of the process. The core compliance function is a small but necessary part of our business.

Will: I do think that we deify the accountant as a font of knowledge to help engineer a business. Itís hard to do that when youíre not the founder or in the business. I see the future generation of business owners wanting to see their accounts on their phone at a glance.

Stuart: But then this circles back to cloud technology. New generations of business owners will have a completely different interaction with their accountant thanks to technology.

Advice is much more accessible and affordable than it was. It doesnít necessarily mean face-to-face strategy meetings but continuous feedback, performance reviews and system analysis.

Ian: Thatís exactly it. For anyone interested in joining the industry, thereís never been a better time to leverage technology and use numbers as a language to support the growth of a business.

Alex: Our goal is actually to outsource the compliance so we can focus more on the advisory. Weíve even set up group chats on WhatsApp for customers so they can get responses fast.

Damien: And what changes would you like to see in the industry?

Adriaan: I think we need to see a mindset shift. Thereís an old-world notion where you protect your IP and keep your cards close to your chest. Weíre now in this new world where we have more communities, supported and developed by enthusiasts. Weíre in this together.

Mike: Certainly, some trade secrets still exist. Yet for the most part, we work closely with other cloud-based firms. When we first started out, we were the guinea pigs of an unproven business model. Fast forward to 2019, weíre still on this journey together.

Ian: As one of the founding partners of the Xero App Integrator programme in South Africa, weíre doing the best we can to see SMEís succeed by using great technology. This means doing implementations directly for businesses and also supporting other accounting firms to implement technology for their clients,  without the risk of us taking on any of the accounting work.

Damien: Is there anything frustrating you about the industry right now?

Michele: There’s just so much going on. The volume is huge. We have so many apps that should make our lives easier. They come and go. I wish there was a way to easily screen apps.

Phool: Itís so easy to be overwhelmed ñ I was at the start. We now take a step-by-step approach to researching and implementing new apps. Weíll start with our client needs, research the market then prioritise the amount of available support from the vendor.

Damien: Where do you start when researching the app ecosystem?

Michele: It comes back to the community element we just mentioned. I use Facebook groups a lot. You can learn from other peoplesí experiences and mistakes. There are many tools that are good for accountants but not for bookkeepers or business owners.

Damien: So youíd say the accounting and bookkeeping community is pretty strong.

Alex: Thereís loads of advice out there and weíre all there to help. If business is your bread and butter, all it comes down to is making sure you get it right for them. The SMEs are the ones at stake here.

Damien: Where would you start?

Michele: Getting our clientsí accounting system right. I’ve moved everyone over to Xero. We take everything theyíve got and find ways to streamline it with Trello.

Receipt Bank is also at the core. I introduce it right at the beginning. If clients take photos of receipts straight away, we donít fall behind.

Damien: And how is Receipt Bank and Xero helping?

Michele: Itís a seamless process. Clients donít need to know the ins and outs of all accounting systems, they only need to take photos. When I show them on the Xero app how to reconcile while having coffee, you can see the smiles on their faces. Itís instant gratification.

Making the changes work for you

Damien: So what advice would you give to someone fairly new to cloud technology?

Michele: Move. Now. Quickly. Do business better or get left behind.

Adriaan: And in doing so, know that you donít need to be all things to all people. Pick just a few integrations and become experts in those to start with.

Ian: Cloud technology and the single ledger brings you closer to a clientís business, it allows greater involvement but also requires a different operational model from just month-end or year-end accounting. Pick the key apps that will drive the financial function and ensure there are clear expectations on who is doing what, and by when, to achieve financial clarity.

Stuart: Iíd echo that. Itís unrealistic to offer everything. Narrow your tech stack. Promote it internally. Then market it as your strength and specialisation.

Alex: Agree. Now we have our tech stack in place, we have years of accurate data that we can use for in-depth analytics and insights. I hot-desk in a fintech hub in London alongside 250 companies to keep a finger on the pulse.

Who knows what the job description of an accountant will be in five years? The one thing that hasnít changed is the people.

Change is what we all do now. Itís up to us to write the future, mixing and matching world-class tools to bring the future of cloud to our clients.

Find out more… 

To learn more, visit: receipt-bank.com/XU20

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About the author

Damien Greathead

Vice President of Global Accountants, Receipt Bank

With over a decade of experience in cloud accounting, change management and marketing, Damien leads the companyís global thought leadership program. Before Receipt Bank, he was the Director at 2020 Group USA (acquired by Panalitix in 2016). Today he helps accountants and bookkeepers across the world drop the data entry and do more of what they love.