In the past five to ten years we have seen rapid growth in technology across all sectors. Take the iPhone as an example – the first generation iPhone was released in 2007 in the United States and now it is available in 40 different countries with 3 different model available this year!
Technology has fuelled demand for expecting things to happen fast and is forcing many firms to review their processes to increase efficiency and meet this demand. Access to information has never been more readily available which is why it is so important to use it to our advantage to be at the forefront of our industry.
Early adoption in terms of technology and software is now the preference in great contrast to in the past where it was always viewed as “best practice” to wait and be a part of the “late majority” adopters. I believe the reason for this shift is that small businesses can see the benefits of streamlined processes and automation and they don’t want to wait. Software developers are also more receptive to suggestions and changes in the early stages unlike before where there would be numerous bugs and issues that would take a long time to fix. The speed at which technology is changing the way we do business is also influencing the early adoption, those who don’t embrace this change are going to get left behind.
Gen Y and Millenials are capitalising on this eagerness for fast information and using smart software such as Xero to do it. No longer do you need an office or filing cabinets to store masses of files – it can all be stored in the cloud using a hosted service such as icloud, dropbox or similar. These services are much cheaper than a physical server that may cost tens of thousands of dollars to purchase and are outdated before they are setup. This means that the barriers of entry to commence an accounting or bookkeeping business are relatively low and that is why we are seeing an increased number of start ups operating quite successfully in this space.
Outsourcing services have also evolved and come a long way through the move to cloud based programs and storage services. It is now easier than ever to work with an outsourced team. Outsourcing allows startups to scale as quickly as they need to whilst keeping costs at a minimum in those early stages.
Michael Macolino from Accodex says that there has been an increased number of young accountants leading exodus from the big firms. "They are typically aged between 28 and 40. They are in mid-tier and larger firms. They are bound by old technology and the old 'this is how we do things'. Really what they want to do is take a new approach and develop long lasting relationships with businesses."
Xero and its ecosystem have been an integral part of our entire business model and have enabled us to truly be a “mobile accountant” and work from anywhere. In my experience, the majority of client’s would actually prefer you that you visit them as an added personalised service rather than take time out of their busy day to travel to your office. It also makes sense to utilise the cloud based hosting as you can then access the information you need whilst out of the office.
Through the implementation of Xero tax we have been able to streamline the finalisation process of an Income Tax Return or Business Activity Statement substantially. Xero tax sends the returns for digital signing and also saves them upon signing straight from the software removing the need to print or PDF the returns and scan or save them manually. This substantially reduces the amount of administrative tasks that need to be done which in turn reduces the need for excess staff which is important in any startup.
When implementing any new software and procedures it is important to plan ahead and consider whether the procedure will work for a larger firm. It doesn’t seem as important at the beginning but as any business experiencing growth will tell you that you won’t have time to think about this later on, it will be the last thing on your mind. If you don’t have well thought through and documented procedures in place in the beginning you are heading for disaster.
Through the implementation of Practice Ignition we have also streamlined the proposal, engagement and onboarding process. Practice Ignition does it all, from sending a professional online proposal to collecting the monthly payments and automatically preparing the invoices straight into Xero. Once again this reduces the amount of administrative tasks that need to be done in the onboarding process for a new client and in the billing process. Practice Ignition also provides insight to your conversion rate for new clients on your dashboard. I signed up for Practice Ignition at Xerocon straight after seeing it in action – I was impressed!
It has been like a broken record hearing the chatter surrounding the accounting industry that we need to change the way we do things and embrace technology however it appears that not everyone is listening. The old school accounting firm is changing and the firm of the future is a very different one that is constantly changing and evolving. I am excited to see where this rapid technology advancement will take us in the future!
Link to the published article in Xero XU Magazine - http://xumagazine.com/issue-13/using-technology-to-scale-your-business/
Founder & Director
Two Sides Accounting
02 9030 0269