Bookkeeping and accounting professionals are on the edge of a new industry paradigm, with technology changing the entire way we do business as a profession.
Of course, change is inevitable. But what marks this period as different is the rapid pace that technology is moving and the speed at which businesses are adopting that technology. In fact, Gartner expects spending on cloud application services (including cloud accounting software) to reach over $75 billion by 2020, with growth rates in the double digits as businesses scramble to move to the cloud.
In order to thrive, accounting professionals needs to transition their businesses to a model that meets the needs of today’s clients — and quickly. I recommend bookkeepers and accountants start with a needs assessment in order to understand what knowledge, abilities, and processes they will require to add the most value to their clients.
Gaining an honest awareness of what your target clients are seeking — and the current state of your accounting firm — is the first step toward making the pivot. Here are several other steps you can take to ensure your firm is future-ready today.
Step 1: The Gap Analysis
Gather together the stakeholders in your business (your partners and team members) and commit to asking the tough questions about your business. It may also be worth bringing in an outside consultant, or picking the brains of your colleagues in the industry to help you get a different perspective.
What are the current standards for accounting and bookkeeping firms?
Where in your clients’ processes could you be making the biggest difference?
Where in your clients’ businesses could you be adding the most value?
What are your organization’s strengths and weaknesses in these areas?
What skills, knowledge, and experience will be required to close these gaps?
How are you scheduling appointments, sharing documents, managing your calendar, and communicating with your colleagues and clients?
Are you missing out on any potential benefits of modern technology by doing things the way they’ve always been done?
While analyzing the gaps in your business is important, it’s equally critical to examine your own skills and mindset. As such, you should ask:
How do you view your role within the entire accounting process?
Are you comfortable taking on roles beyond the one you’ve always played, and taking advantage of the knowledge you’ve gathered over the years?
What are the other parts of the accounting ecosystem you haven’t been involved with?
Step 2: Identify Your Priorities
Your gap analysis should have produced a list of areas within your organization and your own skillset that will require additional training, research, and resources. Rather than trying to undertake change in all these areas at once, comb through the list in order to identify your priorities.
Ask yourself: If you could only implement one of these things, which would make the biggest difference in your business? Often, tackling one big item on this list — such as moving all your clients to cloud accounting software — will enable you to hit several smaller targets.
Step 3: Identify Your KPIs and Set Goals
How will you know if you’ve achieved real transformation in your business? By identifying key performance indicators (KPIs) and setting goals to help you get there. KPIs for your firm may be:
Average project value
Average revenue per client
Number of projects per client per year
Percentage of clients in the cloud
Monthly recurring revenue
Client retention rate
Really consider what you want your firm to become, and select one to three KPIs that will mean you’ve made it. Then, set SMART goals and identify milestones toward those goals so you can track your progress.
Changing the course of an entire business is a daunting task, and setting milestones will help you ensure you’re headed in the right direction.
Step 4: Develop an Action Plan
With your gaps assessed and your priorities mapped out, create a plan for the future. I recommend creating a long-term timeline (where you want to be in 5-10 years), then breaking that down into shorter time periods such as one year or three months.
Part of the action plan should include training for both yourself and your firm. Educate your team about the benefits of this new business model, using real-world examples in order to help your staff make the transition.
I believe the biggest key to staying on the front edge of our new paradigm shift is to continuously educate yourself about your industry. Commit to constantly reading sources which will help you fill those gaps and building a resource library you can turn to for the latest insights, trends and information.
For a lot of accounting professionals, this is not going to be an easy transition. But if you’re willing to put in the effort both for yourself and your firm, you can reap the rewards.
What gaps do you have in your knowledge or experience?
AccountingWEB and Xero are proud to present this content through a four-part series. Xero shares in our commitment to help bookkeeping firms better serve their clients and drive growth. Learn more at xero.com.