tech, Xerocon, outsourcing

In September, we were at Xerocon Brisbane. Whilst we were there, we had the opportunity to catch up with our Australian clients, see some new faces and get the latest updates in tech. 

The biggest move we noticed in Australia is the increasing move into SMSF and bookkeeping for clients by accounting firms.  Clients want a holistic service from their trusted friend – their accountant!

Often the two go hand in hand and firms are increasingly asking us to manage the SMSF record keeping for the individual fund, but more importantly, the business owner wants the accountant to look after the business’ financial records.  This trend, which started a while back is turning into a flood, with businesses recognising that their energies are best spent in driving their business forward. 

Their accountant is now better able to help clients with Cashflow management using tools like Float, Fluidly, Fathom and Futrli for example. They can do this, because they are responsible for the regular production of management accountants, all enabled through technology. This was a very important growth area. 

In 2018 we wrote about the top three issues facing Australian firms

Talking with professionals this year in Brisbane we found that outsourcing is becoming more of an accepted way to deliver work. Some firms also wanted to hear about our dedicated offshore resource. 

But most successful firms among them have truly embraced the fact that their role has changed. 

They’re outsourcing as default, from compliance through to reporting, so that they can have a consistently proactive rather than reactive relationship with their clients. 

What moved them to make this decision?

1. They realised they’re not in the business of accounting

 

What?

A confusing statement for an audience of accountants. 

Our friends at GoProposal wrote a really great blog titled ‘You’re no longer in the Accounting business’.

It’s just as true in Australia as it is in the UK, perhaps even more so. 

When we meet accountants we often find ourselves asking them – what is it that your clients want? Yes, they want to save tax. Yes, they want to know that their affairs are sorted. But what do they really want? What are their goals for the growth of their business, for their family, for their future. 

The successful firms are now in the bigger-picture business. They’re having conversations with their clients about the things that really matter. 

There’s a growing demand for wealth management advice

One of those bigger picture conversations that’s in demand more and more in Australia is wealth management. There’s an increasing need for advice in personal and business wealth strategy, pensions and retirement, and many accountancy firms are filling the gap by moving into wealth advisory services.

As more individuals manage their own pensions with a self-managed superannuation fund (SMSF), the work involved is also rapidly growing for those accountants who have moved into the wealth space. This means two things:

  • The firm will be pushed to deliver more compliance work
  • The firm owner needs to free up more time firm-wide to have bigger conversations with clients and offer more value

As these two things happen in tandem, it means more training, stronger systems and consistent processes. This is where the need for outsourcing has become more than just offloading compliance work. At AdvanceTrack, our goal is to help you create the business structure to have the very best conversations with your clients. 

2. They understood they need to create the right environment for today’s staff

 

We partner with firms in the UK and AUS/NZ and we’re seeing that the same issues arise when it comes to staff retention. Once qualified, if not pushed to their potential, staff are leaving smaller practices for the big accountancy firms or migrating to tech companies. 

Australia is further along than the UK in digital development, and the tech space is an attractive option for graduates who are now learning to add value at an earlier stage in their career. 

At the same time, we’re seeing desktop software being discontinued. BGL, Australia’s leading SMSF admin software, has retired its desktop product in December. 

It’s adapt or be overtaken when it comes to transitioning to new technologies and giving clients real-time information. Business owners can access their finances at the click of a button now, meaning that roles have changed whether we like it or not. Cloud integration specialist, Chief Data Officer, Virtual FD – These are the next generation of job titles.

Your staff already don’t want to be stuck delivering low-level work now, and they won’t want to be stuck delivering low-level work in the future. And remember, it’s not why you became an accountant either! 

The firms who are seeing real growth realised early on that their people are working at the wrong level, and they’re outsourcing their core services to make room for more skilled, challenged and satisfied staff. 

Ask yourself these two questions

If you’re stuck in a compliance cycle right now, and you can’t see a way out of the hamster wheel, first ask yourself:

  • What do my clients really want?
  • What do my staff really want?

Then take a look at how you can go about joining the global community of firms on this outsourcing journey, and realise your new potential as an evolved accountant. 

When accountants come to us, one of the first questions we ask “is outsourcing the answer to your problems?”

Admittedly, it’s a rhetorical question, but it makes you pause and think. We’re always preaching that outsourcing isn’t just about handing over compliance work. It’s about changing the nature of the relationships with your clients, but you can’t do that if you don’t overcome the underlying problems your firm is facing.

On the surface, outsourcing might seem like the answer, but we wanted to take the opportunity to address those issues and how to overcome them, and also how outsourcing might play a part in that.

1. Delivering to deadlines without overworking

Your accountancy firm should be 100% focused around client service delivery, otherwise chances are you won’t be in business for very long. So, what’s changed?

Well, for one, there used to be some downtime between the different projects. This allowed an opportunity to reflect on the project, evaluate the time put in, regroup and plan for the next project. But instead, you’re finishing one project and immediately diving into another!

It’s in large part due to technology. With the advent of Xero and QuickBooks, coupled with receipt scanning apps and reporting tools, your clients have more data than they know what to do with, and it’s your job to handle that.

Because of these increasing changes in the industry, the volume of work is naturally growing, meaning there’s no longer any downtime. You’re doing the work yourself because you don’t have a choice. Sure, you could outsource the day-to-day bookkeeping to free up your time, but deep down that’s not the solution. It’s time management. You need the right tools and people in place to handle projects better, which leads us nicely to problem #2.

2. Implementing new tech

Xero published a report in 2017 that revealed that more than three-quarters of firms still use spreadsheets with their clients. Even more alarmingly, 18% of firms are still working on paper ledgers.

We couldn’t agree more with Xero’s comment that “old methods continue to strangle practice efficiency”. Technology has evolved massively over the past couple of years, but the challenge for accountants is the implementation.

Which software do you choose? Which apps do you offer alongside it? What systems do we need internally? Is this going to improve our speed? What if our clients don’t go along with it?

Those are some of the questions that you’re most likely pondering and rightly so. It’s no small feat implementing new systems, and that’s often the reason most firms hold back. They’re scared of things going wrong, of systems not working, of clients disengaging.

For you to overcome these problems, you’ve got to go beyond your comfort zone and be willing to embrace the change and try new systems. You’ve got to be ready to test and learn and ultimately fail. If you’re not willing to do that yourself, what chance do you have of your clients being willing to try new tech?

It’s about that long-term goal of development and building a better, scalable firm, and it starts with taking that first step of trying something new.

3. Finding the right team

All of the issues mentioned so far come back to your team. A lack of downtime or a lack of systems affects them too, or they’re part of the problem.

If you’re the director of a firm, you could be doing a lot of the work yourself, because you haven’t got the right team members in place to support you. Likewise, you might be hesitant to implement new systems because you’re not sure if your team would be on board as well.

A lot of it comes down to how you recruit. You’re not just recruiting for another person, you’re recruiting for someone who’ll embrace the changing environment. It’s about skill set, engagement, motivation, meaning you’re ultimately looking for someone who is resilient and willing to adapt. That’s the kind of team member that will stick by you, rather than hopping from one firm to the next and leaving you to pick up the pieces.

What’s wrong with this picture?

 It’s a vicious cycle: You’re not delivering to deadlines and/or you have no downtime. That’s caused by not having the right systems in place. This can be the case if you don’t have a willing team or the right team to support you, or even if you’re not delegating enough to them.

So, to go back to our opening question “is outsourcing the answer to your problems”, the answer would be “it depends!”

Outsourcing only truly works when you have addressed the problems we’ve talked about, or you’ve at least started addressing them. As we said at the start, outsourcing is really about changing how you work and interact with your clients, and you can only really do that when you’ve begun to work on the problems with time, technology and your team.

But when you’ve mastered that, and once you go on to building incredible relationships, you’ve got the key to success, and you’re no doubt on track to build a firm poised for amazing things.