A Primer for Accountants Offering Cloud Accounting Services

Let me start by saying that this article is intended for accountants who want to build a successful client Accounting Services business in the Cloud. Secondly, allow me to relieve your mind by stating at the outset that I am not going to repeat all of the myriad reasons why cloud technologies represents the wave that you must get on top of before it crashes on top of you. I know you have all heard that so many times that it is becoming trite. What I would like to share with you is why it makes sense, again purely from the practitioner’s perspective, to consider looking at deploying cloud solutions in your practice, and particularly, QuickBooks® Online for Accountants (QBOA).

As a means of preface, I am an Accountant, and have been in the accounting industry for thirty years, starting with Deloitte & Touche as an auditor, then Arthur Andersen, then serving as a Controller in the software industry for New Dimension Software for nine years, and then the last nine years working as an Accountant for Core Performance providing client accounting services to SMB customers here in Southern California.

Working with SMB clients is a tremendous honor because of the unique opportunity we have to influence executive decisions and impact positive change in the businesses we serve. I am not exactly sure why we have this unique opportunity, I just know from working as a business partner alongside numerous Company owners that we do. When you consider it, this is also a tremendous obligation since we are oftentimes put into situations where we are working with limited information and data points. Everyone knows that Accountants love datapoints in hand to help them make decisions. Here is the conundrum, and also the great opportunity to differentiate. We have all worked with QuickBooks files where the client staff just throw their hands up in the air and say, please take a look at this and tell me what you think we need to do to make heads or tails of the data and reporting analytics. By the time you figure out what is wrong with the file, determine what is needed to resolve the issues, and actually complete the steps required, you have used up all of the client’s budget for accounting services for the next three months.

This is a broken model and we all need to acknowledge it is no longer sustainable. I like to refer to it as the break/fix model. I know you know this but humor me alright? Client breaks datafile (meaning data is no longer reliable); Accountant comes to the rescue and fixes datafile (meaning data is temporarily reliable); wait a few weeks or months and client breaks file again. We get called in again. We could also call it shampoo, rinse, repeat. This is an exercise in futility. There is only meaningful data to the extent that we can spend time fixing it. So we get paid (not very much by the way) but the client is not really satisfied because they too know the inevitability of it all. And I would also put it to you as follows:

  1. This is not why we get into the client accounting services business.
  2. This may be the low hanging fruit but it is no way to build long-term committed and deep relationships with clients.
  3. We will never build a highly profitable practice having these types of engagements, they are time consuming, the margins are not great, and there is no leverage being deployed (neither technology, capital or human resource).
  4. After doing all this work, we still have not even begun to make significant changes in the businesses we serve- remember the initial conversation with the client where we spoke so loftily about making a difference in their business?

So what do we do? ­We need a path forward that allows us to stay close enough to our clients and their businesses so we can develop constant touch points, times, places, situations, where we can impact their business and maintain integrity and quality with their accounting system and management reporting. We also need to gain enough familiarity with the Company and its inherent business operations to where we can have intimate knowledge of the key drivers that make that business go forward. Then, and only then, will we be able to accomplish those lofty goals that we set out. Think about it ­ none of us got into accounting because we wanted to reconcile balance sheet accounts and tie-out the P&L to the tax return. Back in the day, we used to have junior staff do that stuff. No, we wanted to use our financial acumen and analytical problem solving abilities to make important business decisions. Well, I am here to tell you that this is doable and we are doing it.

I hope you have stayed with me this long – How did we do it ? Well I’ll tell you in a few simple steps:

  • We start out by communicating the value to our client of performing client accounting services in the cloud. We educate the client on “the cloud” and exactly what the transition means to their business in terms of greater security, easier collaboration and real-time financial insight in to their business.
  • We communicate the importance of us becoming their trusted advisor and what that means to their business, we explain that it allows us to be proactive rather than retroactive and that we can provide real time advice, set goals for them for the years ahead.
  • We adopted QBOA as our accounting platform for our client accounting services business segment. We needed a solution that would allow us to have immediate access to the client’s accounting system, regardless of which computer we were using or where we physically were. As long as there is internet access (oftentimes wireless), we can get to the data we need to keep the wheels of progress moving forward. Sometimes this is responding to a client’s question, sometimes it is reviewing a staff member’s work product, sometimes it is assembling financials or KPIs on the fly, sometimes it is using a snapshot of the datafile to help solve a strategic issue with the owner. Whatever it is, we can do it quickly, easily, for little cost. Our clients also are looking at their financial data more frequently, oftentimes daily, now that they know their accounting systems are being maintained in real time. This too is a significant change from the old model. Previously clients wouldn’t even bother to look at their statements since they knew from experience and intuitively that the data was inaccurate.
  • We adopted Intuit® Tax Online, for our business and personal tax services platform, in addition to bill.com, SmartVault for document management and client portal, Mavenlink for Workflow, team communcations, task and project management. All of these solutions are cloud based, and all are integrated with QuickBooks Online.
  • We adopted Intuit Online Payroll for Accountants (IOP4A) , which includes including the ability to set up client access; tiered pricing (the more clients, the cheaper it the cost per client); the ability to white label the application for client login, The benefit to QuickBooks Online Payroll is that it’s an integrated solution. Although it’s not built right into QBOA, it’s as easy as clicking a button, literally one button, to import the data to QBOA. All of the reports are right there at the owner’s fingertips, as well as the ability to reprint returns whenever the owner wants without being charged extra fees that many outside payroll companies charge for this service. As long as the payroll processor has access to a computer and the Internet, the payroll can be processed.
  • For both new and existing customers, we switched to fixed fee value based billing arrangements for our client accounting services. This enables and encourages our clients to stay in touch with us since there is never an hourly billing. So we are in the loop all the time as to what is going on and how we can provide meaningful advice and action items as to the areas we are responsible for.
  • We meet with our clients virtually, using chat, text, tele-conference, Skype and email, in addition to face to face when necessary. We also respond back the same day in most instances. Once you get to the cloud, everything happens faster. Issues get addressed, and the expectation is, resolved quicker. This limits drive time, set-up time and wasted energy.

That is basically it. By adhering to these transitional practice principles, we are now able to have better relationships with our clients. Some of the examples of how we are building better relationships are: more succinct synopsis of how the business is performing; better ability to articulate the cash flows of the business; ability to develop ownership value calculations for the principals; regular check-ins to address tax questions and tips throughout the year.

I do not know yet if we are spending more time than under the old model, but I do know that the clients appreciate what we do more, and then when there are other pressing needs, the likelihood is that we will be asked what our game plan looks like. Let me know your thoughts about this shift in our industry, or if you want to just discuss this shift in your business give me a call or shoot me an email. We are very early in this transition so now is the time to get out in front about the value we can bring to our clients.

Editor’s Note: This article first appeared on AccountingWeb.com.