Premium service will come in useful for practices that use outsourcing strategically

“If you commit to AdvanceTrack, we’ll commit to you.” That’s the message from AdvanceTrack MD Vipul Sheth, having launched a premium “Amazon Prime-style” service for its top clients at its annual conference.

“The new service is aimed at clients that use outsourcing strategically, rather than just an overflow capability,” Sheth told the 120 attendees at AdvanceTrack’s annual June event in London.

“We’re saying to firms that if you see outsourcing as a strategic delivery resource, we will support that with a higher level of service.

“What we’ve seen is that the firms that use us regularly and strategically grow faster and deliver higher levels of service. The irregular, overflow users, haven’t fixed their workflow and process problems.”

The use of outsourcing frees up practices’ best people to spend time with clients, rather than entering data. “As a result, they deliver more and better value to the client base,” said Sheth.

AdvanceTrack has made a number of key investments in recent months. The outsourcing specialist has increased the number of
account managers working with its accounting firms, while upgrading its core systems.

“Investment in tech is helping us manage differing levels of service so we can do so consistently and grow headcount to help,” said Sheth.

 

Grow with our Academy

Also announced at AdvanceTrack’s ‘The Client Journey’ conference was its Growth Academy, in partnership with Paul Shrimpling.

It’s about deep, habitual, systemic change to set up your firm for a bright, profitable future, and is for 1-5 partner firms that want profits and the capital value of their firm to change.

The academy is focused on two main areas: accountability and motivation. You’ll be held accountable with regular calls and visits to review the actions you’ve committed to and to agree any next steps.

Not only that, but the academy will have a profound impact on how you and your team feel about the core work at your firm, which will in turn help your team enjoy the work they do.

Firms that have gone through the academy have experienced tremendous results: increased staff retention, improved profits, extra work and higher fees. If those are the results you’re looking for, and you want to make a change to remain competitive, then this is the next step for you.

It’s safe to say that AdvanceTrack’s 2019 conference was a great success, with the most attendees ever at one of our now annual events

This year’s theme at AdvanceTrack’s 2019 conference was about building a first-class client experience. A range of speakers, including Paul Shrimpling, Iwoca’s Richard Sutton, The Profitable Firm’s Karen Reyburn and My Accountancy Place’s Paul Barnes, spoke at length about how digitising processes and thinking carefully about the interactions you have (or don’t) with your client will have a massive impact on how they value your service.

MD Vipul Sheth gave the introductory speech, talking at depth about the “journey that data takes through your organisation”, in tandem with how you deal with people.

“It’s about creating time and opportunity for you to speak to more people, that’s what AdvanceTrack is here for,” he said.

Sheth added that most firms’ staff, in five years’ time, will be technologically adept, and that bookkeeping services and management is “essential in terms of delivering a regular conversation”.

 

Building an onboarding process

The Profitable Firm’s Karen Reyburn gave an inspiring talk on using simple technology to build an onboarding process. She referred to the importance of “drip-feeding” information back and forth between yourself and the client during the process, and is not to be rushed so as not to overwhelm them.

Paul Barnes, founder of firm My Accountancy Place, spoke at length about how to set a pricing strategy.

Using GoProposal methodology, alongside bundled pricing, Barnes spoke about the importance of discussing the needs of a potential client face-to-face. When their needs are understood, the bundle can then be moulded to meet their needs. If required, the offering can be itemised so they can see exactly how much the range of services cost.

“If they were to hire an accountant in-house, we use that to contextualise our costs,” he explained. “You’re effectively an outsourced finance function.

“We’re iterating our services and pricing almost daily. Value pricing isn’t easy,” he added. “So make sure you charge on factors and outcomes.”

Nikki Adams, of practice Ad Valorem, said the conference “was great” for two reasons: “I was enthralled with some of the sessions where industry-leading specialists were able to paint the picture of the next stage of the cloud accounting transition for practices of all sizes; it also helped to benchmark us against, and network with, other forward-thinking accountants. We came away buzzing with ideas.”

Wood and Disney’s David Rudd said: “The AdvanceTrack conference re-affirmed that we’re on the right track but have more to do to digitise and optimise our processes. [It had] great speakers and [it was] good to catch up with friends old and new.”

AdvanceTrack’s webinar series contains lots of insight to help you set out the direction for your practice. We round up a chat with Receipt Bank’s Sam Horner on ‘the future is now’ for accountants, and highlight our other online discussions

AdvanceTrack has a great catalogue of webinars for practitioners. Topics range from how to approach bookkeeping, through to credit control and even marketing advice – in conjunction with some of the UK’s top accountancy experts.

We’ve included an excerpt from a webinar with Receipt Bank’s Sam Horner: The Next Generation of Accounting. This wide-ranging discussion sets the scene for how and why advisers must look at their practice’s operations as part of a strategy to develop value for a modern client.

Sam is joined by AdvanceTrack MD Vipul Sheth in the chat.

 

Starting point

Vipul Sheth:When we talk about the cloud, an indicator of how far a practice has gone down this path is the number of apps and add-ons they use alongside the core bookkeeping product. It’s an indicator of how far you’ve gone down the cloud journey – are you giving clients real-time information?

Sam Horner:The issue we see with early adopters of the cloud is they take on the bookkeeping service and see it as a silver bullet, but the cloud is more powerful when combined with everything – whether that’s apps for accounts, invoicing, chasing debt and so on.

VS:Real efficiencies come from using other add-ons. And optical character reading (OCR) is a key part of data capture.

 

Factors driving change

SH:MTD does have a say in this, but a lot of the change is being driven by clients. It’s about the way millennials and Generation Z communicate and live their life. Conversations I hear where ‘we use our phones for an alarm, go downstairs and listen to Spotify, tell Alexa to change TV channel, get in the car and it tells you how to get to work, then at work everything’s offline’… The tech stops and they don’t engage with cloud apps in the same way as at home, so the drive and shift is coming from how they operate in their personal life.

VS:If accounting practices have a great relationship with long-standing clients, then they must appreciate that their clients’ business will hand over to their kids – and they’ll expect information over their smartphone. They’ll question why financials aren’t available online. So, firms need champions who can at least have conversations about how their firm’s going to develop.

SH:There is a big question about ‘how do I get clients to change’ and educate them? But you might be surprised, there can be preconceptions about established clients – the previous generations.

VS:The real difference we see with working with clients online is that with regular interaction, your firm can spot gaps where things are missing, rather than getting well past year-end and find things are missing. Then you have to make assumptions on behalf of the client.

We see MTD as just another button to press, for those that are on cloud. However, some think that if you’re making processes automated and ‘easier’, the client will actually want fees lowered.

SH:Well, then you have to show the benefits of the technology. If you can give a client their accounts by the third of the month, then to the client it’s as close to real-time as possible and helps them make decisions. One of our practice clients made this move and offered a premium service to their clients: 30% took up the premium service. But, in reality, the partners aren’t really doing anything different but have created more revenue.

And firms are having conversations where, after adopting tech, they put clients onto fixed fees across a period, and the client is happy.

VS:But where it frees the accountant is for other services: R&D reviews, tax planning meetings and so on. These things were hard to do, but now all clients can be seen because you have access to their data in real-time.

This morphs into CFO-style services. Many businesses can’t afford a full-time accounting professional in their firm. But real-time access enables them to have better conversations, almost as their CFO. I know a practitioner who specialises in a sector, and can now benchmark the client base.

 

The next generation of job roles

VS:Lots of firms we’re working with can perform the CFO role; using tech to capture and process information. They then use our team in many instances to do the bits that technology can’t. We call this ‘systemising the unsystemisable’.

SH:At Receipt Bank we say ‘it’s great to have badges and logos on your website of products, but they just enable you – don’t dine out on them’. They just power what you do. The tech is there to make yourself easier.

For the next title: Chief Data Officer or analyst. This role comes as the government is getting tighter and tighter in the risk management side of sharing of data.

VS:This role is about making sure the integration piece is properly run and tested. In smaller firms these roles or ‘hats’ are worn by the same person – you have specific roles when it comes to larger firms.

SH:We’re seeing firms recruit staff without an accounting background: 18+ year-olds with iPads in their hands, employing them because they understand tech. Clearly it’s also about mindset rather than age… but in reality for many there’s that ‘desktop memory’ in your mind, which isn’t there for someone starting fresh. Junior staff are helping with onboarding, for example.

VS:Yes, we’re seeing conversations being pushed down in the firms – not all partner-led… more of a team-based approach. Your age and experience aren’t limiting factors on who you can have conversations with. The person who’s comfortable sitting in a room having conversations will be recruited.

SH:There are other emerging titles: relationship manager, business development and software support for clients. Firms are investing in people and skills. You used to be able to hide behind numbers, but firms are saying: ‘We need to look at how to upskill our team to have conversations.’ There is still a need for technical specialists and software won’t replace them. But there’s going to be more face time, and that’s where we see the shift.

 

How to change your practice

VS:Fundamentally, you need clean data coming in: from OCR, bank feeds and so on.

SH:It’s about having a single process for a single task. If you standardise processes, you’ll reap the rewards – and allow you to scale-up.

VS:The cloud and digitisation allow you to gain an authenticity of data. However, if you don’t standardise processes you will have very stressed staff through MTD.

Summary

VS:Technology is the key to scale and profitability. Standardisation, repeatable processes… the more you can do that, the more you’ll be in great stead.

SH:And make sure you do it for the right reasons. It’s not about MTD. You need to understand the ‘why’ before the ‘how’. Why are you making the change? Get the tech in and let us do the processing. It’s about improving the conversations and then your team becomes much more valuable because they have those client relationships.

To start the new year we’ve put together a comprehensive guide to how you should approach outsourcing, from ‘what can I outsource?’ through to the key questions you should ask of your own practice’s strategy and operations. AdvanceTrack founder and MD Vipul Sheth fields the questions from Kevin Reed.

 

What is the ‘starting point’?

While outsourcing as a concept is well understood, practices can struggle to align that concept with the running of the business. Unless you see outsourcing as a strategic part of delivery for your firm, it won’t work.

For example, do you understand how you’re utilising your current staff and that outsourcing could create great (and positive) change to them?

Ultimately, do you want your people and practice processing data? I think that, instead, you’ll make more money spending time sat in front of clients. Using an outsourced service can help you spend more quality time with clients. You’ll bill much more per hour and it will make you a proactive adviser in the eyes of your clients.

Your staff will be involved in those client-facing conversations and earn more money for you. And as their own value increases, you’ll have more satisfied and better-paid staff. And happier clients.

 

What can a practice outsource? What are the most popular or standard types of outsourcing that take place, and how is that evolving?

In principle, any task where someone is sat at a computer and inputting manually has the potential to be outsourced, from tax work to bookkeeping and accounts production. What’s unlikely to be outsourced is the conversation piece with the client, unless there are some basic forms of administrative-focused communication. What tends to be outsourced early on, with relatively low risk, is year-end accounts – a popular choice. You have nine months to file a set of accounts so there’s ample time to check without the client requiring visibility during that process. The information is not being changed live as it would be with bookkeeping. It sits in its own silo.

As for evolution, well, the biggest change happening is the need for real-time data. As a result of this, areas such as bookkeeping in the cloud are increasingly being demanded by the end-client. So, if they want real-time bookkeeping, how do you deliver that at scale?

And that’s where we come in, helping to systemise in order to scale that service upward.

Once their information is processed consistently and quickly, you’re moving to real-time information. So, the achievement as a result of MTD compliance is you just need to press a button.

 

What types of practice outsource, and why? Do certain types of practice outsource certain types of process?

It’s not really about size, it’s about attitude. Big firms would do it more because of their scale, but because of their size it means a lot of buy-in is required from a range of people. It can be done by them but requires a much more involved process.

When I meet the whole partnership, they’ll have gone through the whole ‘why?’ journey; any change project requires leadership and sponsorship. And it can also fail with small firms, if someone in the chain doesn’t go along with the plan.

How long can it take to get a process or function outsourced? Why does it take that long – or short – a time?

I could ask, “How long’s a piece of string?”, but it can be fairly quick, relatively speaking. Again, it depends on both attitude and the will to harness technology. If a group of people understand tech and are prepared to standardise (which will require change in an organisation), then it will happen.

One of our most successful clients used outsourcing to standardise their working files. Instead of a different approach by client, office or partner, they said “this is how we produce a file to support accounts”. So, when that data comes to us it means that we know exactly how it has to be prepared.

 

How does the arrangement work between outsourcer and practice? What is the process and how secure is it?

For bookkeeping, we can work with cloud tools that are collecting client data and we sort it, then push it into accounting software and make sure it’s fully reconciled. An accounting firm might have someone continue doing this, but instead of looking after ten clients that person can now manage, say, 50 clients. Their work will also change – it won’t be about processing, but their time will be reviewing the outputs (while understanding how it’s put together) and work at greater scale with their end-clients. This also frees them up to speak to clients.

Once the initial work is done, some firms get us involved in undertaking management accounts and reporting on behalf of their clients. It requires skill to understand what you’re doing and how you’re doing it, but it can be systemised as well and enable you to speak to your clients in a consistent manner.

As a firm you can move to a subscription-type service and start having great conversations with clients. You’re not reporting history.

On security, some in our industry believe that just because the outsourcing staff log into a firm’s network, they think there are no other GDPR or data protection requirements; we have lots of protocols required to keep client data secure. You can’t just say, “we’re working on your servers in London”; there is a separate requirement to undertake impact assessments around how that data is being accessed.

Then, beyond that, the protocols must be secure. We can work on a firm’s network, where firms have their own IT staff, to do work to ensure data accessed by our team members is locked down and things can’t be abused.

 

What are the key advantages from a cost and process perspective that outsourcing can bring?

This may sound odd, but even in ‘year one’ of the project (even when factoring in internal time) you’re probably looking at break-even from a pure cost perspective.

But I’d say that, longer-term, what you can achieve is more client-facing time, and as a result they bill more.

They’ve also changed the type of person they recruit, not someone to work in an engine room but instead be comfortable sitting in front of clients, and talking sensibly and confidently about that business. They’re not having to talk to clients’ FDs about deadlines and accessing information. And it’s a totally scalable process.

 

What else should my practice consider?

When I sit down with practitioners I say: “You need to have a standard workflow.” So whatever is sent to us by whomever, it looks pretty much the same every time, while appreciating or understanding where there will be exceptions. Get standardised yourself and then expect that level of process rigour from the outsourcer.

 

 

Key questions to ask outsourcers

  1. What experience do you have in the outsourcing space?What credentials does the outsourcer have in place, and are they interested in how your practice operates? Try and speak to existing clients. This is all crucial as it will impact directly on your working relationship.
  2. Do you also run an accounting firm?It’s not unknown for some outsourcers to also provide their services directly to what would be considered end-clients. Therefore, are they actually competing with you and, if so, are you comfortable with that?
  3. What credentials do you have that give me satisfaction that you’re trustworthy and reliable?Accreditations should be asked of the outsourcer. What are their processes and general approach to security and reliability? Where are their operations based, and can they be visited?

 

Key questions for the practice to ask itself

  1. Do you want to grow your business?Simply hiring more staff is a way to help you grow, but getting staff competent at processing complex accounting and tax data means they’re sought after. It’s also difficult to improve margins. Lastly, will this approach work when attempting to provide data to HMRC more regularly, and will clients start asking for better and more timely services?
  2. Do you want yourself and staff to be more client-facing?If you’re looking evolve your offering, then your staff will be vital in achieving your goal. Freeing them from processing provides an opportunity for them to help your practice evolve.
  3. Do you want to make more money?Improving margins and profitability requires you to improve your processes.

 

A webinar featuring AdvanceTrack MD Vipul Sheth delves deeper into outsourcing: future technological developments; its impact on accountants’ skillset; and his approach to working with clients

A joint webinar between AdvanceTrack and Practice Ignition looked to deal with the important topic we’re covering in our main feature: What should you be outsourcing?

AdvanceTrack MD Vipul Sheth and Practice Ignition’s Trent Mclaren explored the future of outsourcing, while highlighting how practices are currently driving their business forward by using tools to help implement their strategy of growth through high-value services. Here’s a taster from the session. Make sure to listen to the whole webinar, which really delves into some of the most relevant details behind outsourcing strategy.

Trent Mclaren: How has outsourcing changed since AdvanceTrack was established in 2003?

Vipul Sheth: A big change is that outsourcing is much larger as an industry, and more professional. But the biggest game-changer is technology – whether built by us, or by [software providers] in the market. There’s a massive difference in how we put together accounts even from just five years ago. The way we access data and information from the cloud is very different to receiving an Excel sheet or backup file… we still get those sometimes. We’ll continue to change – we have our own developers because we want to be an efficient and reliable services provider.

TM: People say that technology makes jobs redundant, but it also helps to create more jobs as well…

VS: Outsourcing [and automation] creates an opportunity for firms. We see within these organisations a bunch of skilled people who have client relationships, and [tech] allows us to have deeper relationships. That’s where we come in – they can use the data from an outsourced provider to have those conversations. The challenge is that clients see a set of accounts as a transaction, something they have to pay for. In that sense they’ll look for the cheapest option. But what you do with that information will be the reason they keep coming back.

TM: Who is the ideal customer for AdvanceTrack?

VS: It’s not about size of firm, it’s about leadership of the firm – how invested are they in growing their business? Because then we’ll be talking about outsourcing for the right reasons. The work’s undertaken in a lower cost economy, which will help to save money, but is outsourcing a strategic part of your delivery? The leadership have to want to deliver more to clients. Then you ask: Do those below leadership level have the skills to not be the introverted accountant… can they talk to clients and advise them?

You can visit our Webinars page to view the recording of our webinar with Practice Ignition.