An Accountant For Life? Are Xero And Kashflow Changing The Way We Use Accountants?

The British are a naturally hesitant bunch. Whilst the rest of Europe feels comfortable swapping bank accounts in the same way you’d swap mobile providers, in the UK we get twitchy and a Watchdog report in 2008 suggested consumers were more likely to get divorced that switch bank accounts.

It is much the same with professional services like Solicitors and Accountants. It is common to hear people refer to their Accountant who is at the other end of the country, who they have used since they lived there as a child – perhaps the same firm their parents used.

But there is a change afoot. The new breed of Cloud Based Accounting services like Xero and Kashflow are changing the way individuals and businesses choose their accountant. When my company launched we selected the Cloud Accounting package first, and then looked for an Accounting firm who had the necessary skills to use it appropriately. I wanted to pose some questions to Carl Reader of Accounting Firm Dennis and Turnbull to get his view on how these changes are affecting the Accounting profession.

Do you think the concept of “An Accountant for Life” still holds true?

Absolutely, but not in the way that it used to. Historically, clients of accountancy firms have stayed with their accountants through loyalty, or a perception that it is difficult to change accountants – much in the same way that they might have had the same bank throughout their adult life. Clients are now much more aware that this isn’t the case, and in fact qualified accountants who are registered with professional bodies have “clearance” procedures that simplify the changeover process.

Having said the above, I still believe that an accountant can be for life, provided that the service level is at or above the level that the client expects.

What attributes do the new breed of Accountants have?

To be able to compete the new breed of accountants will need to be able to step outside of the traditional comfort zone of financial ratios, accounting disclosures and tax rules, and have a much broader skill set – a small sample of these skills would include an understanding of marketing, sales processes, psychology / change management, technology, negotiation… the list goes on. More importantly, however, is the ability of the accountant to advise clients appropriately in these areas, and to understand their own limitations so that they can advise the client to seek further help where appropriate.

Attaining even a basic understanding of the above skills will require significant additional time investment into professional development, and of course it is essential that any accountant is fully competent in the basics of tax and accountancy.

Is Accounting still a localised service?

Not at all. In fairness, this has never been the case and accountancy / tax services have been offered remotely, however historically this would not have been common as accountants were under restrictions in relation to their advertising. These restrictions have been lifted, so there are now firms such as ours that are marketing nationally through Google and other methods.

Personally, my client base is spread across the UK, and I could relocate to any part of the UK and still be near to a similar number of clients. In the future, as cloud technology becomes more common place amongst the general business community, there would be no need to restrict this to the UK as theoretically I could perform all but the face-to-face work anywhere in the world.

Cloud Accounting brings a huge opportunity to firms like ours. I believe that customers of accounting software will choose their accounting provider based on the software they use, rather than based on location. This has been evident to me through our experience of being a leading firm of online accountants, as we are getting a significant level of leads from our online provider’s website.

Whereas in the past a client would ask their accountant about the software they should use (and invariably getting the answer “Sage”), they are now searching Google for this advice and finding online packages that are ranking above traditional packages. Many accountants have not yet embraced this new generation of software, and as such these business owners are left searching for an advisor who can work with their chosen package.

Essentially the Accounting package is now at the core of the decision process, just as you would service your Mercedes car at a Mercedes dealer, and then swap to a BMW dealer for a BMW car.

What are the leading Cloud Accounting Services that your clients use?

Primarily, my clients use a package called Xero, which is an accounting package developed in New Zealand. We do however have clients using other packages such as Kashflow, iCash and Freeagent.

I am a strong believer that accountants need to be aware of all software packages, and understand the strengths and weaknesses of each, so that they can offer appropriate advice to each client based on their needs. They do not need to be technical experts of the software, as ultimately that is what the technical support department are for!

There are many other complimentary packages that tie into a cloud strategy, including Dropbox, Echosign, Google Apps and Workflow Max. Longer term, I would imagine that even traditional PC-based software such as Sage and Microsoft Office will move completely into a cloud environment.

How has Cloud Accounting changed the way you interact with your clients?

In more ways than you can imagine – we have been able to offer the “accountant next door” service to clients in Inverness, Belfast, Cornwall, Kent, and pretty much every area in the UK in between these. We have been able to systemise our internal processes in most cases to increase efficiencies as a practice, and have also been able to deliver additional value to niche markets through the live data that we can capture.

But more importantly, our clients have been able to benefit from the reduced hassle of an accounting package that our team can also access – no more emailing spreadsheets, sending USB keys in the post, etc.

Summary

Just as my company is advising Business Owners to get familiar with new Cloud solutions like Google Apps and Salesforce to change the way they do business, as a Business Owner myself I would recommend taking some time to look at the new breed of Cloud Accounting packages. Don’t wait for your current Accounting firm to tell you – they might never get round to it.

I’d like to thank Carl Reader of Dennis and Turnbull for taking the time to answer my questions, and would invite you to ask further questions and add comments below. Do you use a Cloud Accounting service? What are your thoughts about having your Accounts in the Cloud? Do you currently send unencrypted spreadsheets to your Accountant?

Charlie Cowan inspires and enables partners at NewVoiceMedia, a Salesforce Appexchange partner routing inbound calls based on CRM data. Unusually for someone in the IT industry, Charlie holds a degree in Rural Land Management from The Royal Agricultural College. He lives and works in Cirencester, Gloucestershire, with his wife and three children.

  • Jack

    I use a system called 'Crunch' and it's by far the best I've used so far. Not only do I have access to my accounts from anywhere in the world I also have a live team of accountants to talk to when I need them. I can't recommend it highly enough.

    • http://www.businesscomputingworld.co.uk Christian Harris

      Thanks for the tip Jack. Is this the correct URL for Crunch?

      <a href="http://www.crunch.co.uk/” target=”_blank”>www.crunch.co.uk/.

      • http://www.kashflow.co.uk Duane Jackson

        That's the one,

        It's similar in concept to KashFlow. The big difference being that it includes the accounting services. So it's software+Accountant all in one monthly fee.

  • Francis

    I agree with Jack, the service is brilliant. The replies I get from Crunch are so quick and easy to understand.

  • Rupert

    As well as an accountant in the monthly fee, you also get your own account manager, who is with you from the sign up process. For me, to have an accountant, my own personal account manager and the Crunch system all in one monthly fee was too good to pass up.

    • http://www.businesscomputingworld.co.uk Christian Harris

      I'm intrigued. Your "own accountant". How does that work?

      • Martin

        From what I've seen you don't really "get an accountant"… you get a bunch of algorithms and processes that deal with all the tax rules in what Crunch deem to be the most efficient way.

        The head accountant seems to know his stuff (Ex-HMRC guy) and the other accountants are under him, so the business logic is pretty good and that gets implemented cookie-cutter style for your business.

        As far as it goes, and for the price, it'll be perfect for those who have simple needs and just need someone to handle all the nasty paperwork (if you need company setup you can just get *everything* done from going Ltd. through to end of year).

        If you have needs outside the norm then you can call Crunch and speak to an accountant to get specific advice on particular issues, etc. You have a dedicated account manager who will know your company, it's issues and quirks, and the accounting advice gets tailored accordingly.

        It's certainly changing the way some people people deal with their accounts. Great to see this part of the business being shaken up a bit.

  • jack

    You do get an accountant if you need one. I just phone up and they answer my questions.

  • http://www.telfordassociates.com Kent Accountant

    Hi Charlie

    I think the advent of the internet has made most business supplies more accessible and its easier to change your stationery supplier, your utilities provider and your accountant.

    Yes, Xero has made a big difference to the way accountants can do business. Those who embrace it will prosper.

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