With Xero bringing out its tax modules, a lot of practices want to move their management systems to the cloud and enjoy the same efficiencies as cloud-based firms.

But what does a cloud-based firm look like? And how can a firm take advantage of the benefits these new platforms provide?

A cloud-based firm is… whatever you want it to be

As far as I’m concerned there’s no such thing as a typical cloud-based ‘modern’ practice. I’ve seen  plenty of firms I’d consider ‘modern’, even though they all have their own individual styles.

The biggest rule seems to be there are no rules. You have the freedom to design your business in whatever way suits your passions, industry expertise and lifestyle.

That being said, most of them do share some common characteristics.

5 Traits of Modern Cloud-Based Accounting Firms

  1. No set rules: Owners can structure their practice to target specific service offerings, industry specialisations and lifestyle choices. (It’s surprising how many different principles firms are based on.)
  2. Focused: Many of these businesses focus on a particular industry or service offering based on their experience, skills or passion.
  3. Collaborative: These businesses tend to collaborate more to achieve client solutions, working with other specialist providers instead of ‘shielding’ their clients. (This is a major difference between the new breed of firms and the old ones.)
  4. Cloud-based: They’ve adopted a cloud-based solution for efficiency, which means their workforce can access the workflows from anywhere at any time. They also focus on automating, delegating and/or eliminating unproductive processes.
  5. Outsourcing: They tend to outsource a lot of their basic processing and data entry, allowing them to focus on and grow higher-value services in the areas they like–the reason they went into business in the first place.

How we achieved accounting utopia (and how you can too)

In six months we went from being in the dark about cloud accounting to being named Xero Accounting Partner of the Year 2013 in Australia. And a big part of that success came from identifying what we wanted to achieve quickly, which included:

  • Removing low (or no) value data entry functions from our internal processes.
  • Improving our staff’s productivity and efficiency by eliminating, automating and delegating  non-productive, lower-value processes so they could focus on client service and higher-value advisory advice.
  • Reducing write-offs, and increasing the average hourly rate of our professional staff.

The first step is to identify the processes you want to eliminate. What tasks are you spending time on that could be better spent servicing clients with higher value services?

Next, you need to decide what you want to improve. In our case, we needed to work on issues and areas such as:

  • reducing the admin work involved in preparing proposals and onboarding clients
  • being able to use reporting apps consistently across all clients
  • reducing the level of client error in bookkeeping data we received, which consistently created write-offs and lower average hourly rates
  • marketing our services
  • improving our internal systems.

A big part of this step is working out what you can do yourself, and what you need help with. While there was a lot we could do ourselves, we quickly formed relationships with businesses such as:

And it all revolves around the Xero Practice Management platform.

One area we struggled with was getting help making the transition to the Xero platform and offering a scalable bookkeeping service. And that’s why we set up Zerobooks–to fill this gap in the market so others wouldn’t have the same problem.

Zerobooks offers a range of services to help firms make the move and free up their advisory capacity. It can help:

  • move non-Xero clients from existing practice management platforms to the Xero Practice Management platform
  • input client data from non-Xero clients on an ongoing basis
  • collate and prepare workpaper packs
  • with client bookkeeping for Xero clients, using Receipt Bank for Accounts payable and Chaser for Debtor management.

By following these steps we’ve reduced the amount of administration our accountants need to do. And our accountants are already seeing client files with traditional write-offs showing addons and improved cashflow from our fixed-fee services.

Best of all, our clients love the new reporting we can provide with the Xero platform, resulting in higher fees from clients happy to pay the extra.

Time to create your accounting utopia

Now it’s your turn. Take a step back, and identify areas you can automate, delegate and eliminate.

Then start identifying how you’ll address those issues. Is it something your business can do by itself, or do you need someone with the structures/systems and expertise to help you? Are you creating something new, or just ‘reinventing the wheel’ (and incurring financial and opportunity to do it)?

And once that’s done, it’s time to start implementing your plan.

After all, accounting utopia is just around the corner.