Ricochet News

Why accounting firms should embrace the cloud

By Colin Timmis, Xero, Head of Accounting, South Africa - Aug 30, 2018
Why accounting firms should embrace the cloud

Cloud accounting technology isn’t just nice to have anymore: it’s the future of the industry. New research reveals that firms employing this technology earn $7,070 per client, per year compared to $4,476 p/a for more traditional firms.

If you’re in charge of an accounting practice, it’s easy to be sceptical. Correlation doesn’t always equal causation, and as widely discussed as this software is, hype doesn’t always translate to tangible gains. That said, the opportunities provided by cloud technology are becoming too significant to ignore.

Firms empowered with this technology are growing more rapidly than traditional practices: if they have nearly 100% of their clients uploaded to this software, they enjoy year-over-year revenue increases of 15.5% – with traditional firms experiencing only 3.9% growth. Here’s why.

Cloudy with a chance of success

Cloud accounting software is highly sophisticated, but its biggest benefit is that it gives accountants more time. When mundane, manual processes are automated, accountants can reclaim their workday – enabling them to serve in an advisory, rather than administrative capacity.

If you spend less time on data entry, you can spend more time providing strategic guidance. When you waste fewer hours chasing invoices, you can use it to court new business. As you cut down on internal inefficiencies, you can simultaneously help clients minimise theirs.

Technology has evolved to the point where cloud accountants are switching to value-priced billing – giving them a higher return from their clients, without undue time investment. Old billing methods cannot survive in a new world: if you can provide your end-users a predictable payment structure that corresponds to the value of your work, they will be more inclined to stay with you.

Getting on the cloud

Of course, the many benefits of the cloud don’t make switching any easier. Uprooting your desktop system and replacing it with something completely different is an inevitably awkward process, and not one that happens overnight: it requires careful consideration and thorough planning.

Giving employees clear responsibilities and making them accountable for your firm’s progress towards cloud-readiness is an important first step. Some must convert clients; some must keep the ship sailing during the transition – but all must contribute.

Millennial employees will be key: as digital natives, they’re far more at ease with new technologies, and can more easily communicate their benefits in the process of onboarding clients. Use them.

New business may suffer in the interim, but long term your company will be better able to pursue it with more sophisticated infrastructure in place.

It’s a daunting process, but one that will be worth it in the end. Because beyond the transitional implementation phase, becoming a cloud accounting firm is about replacing inefficient processes with ones that make a difference to your bottom line. Empowered with the right software, you can better service your clients and generate more revenue from them at the same time.