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The Two Kinds of Clients You Want to Bring with You to the Cloud

Jan 22nd 2015
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This is the perfect time to offer your expertise and insight to clients, showing them what sets you apart as their accountant. When they come to you to prepare taxes or financials for the prior year, suggest how they can prepare for a successful new year by switching to a new technology like cloud accounting. This is a great way for clients to improve their overall bookkeeping process and gain more insight into their finances.

As most of us know, some clients can be a little more stubborn than others when it comes to trying new things. I’ve encountered two types whom I’ve had to convince to make that switch: the “shoebox" client and the "desktop" client. Each requires a different approach:

The Shoebox Clients

These keep receipts and invoices hidden away until tax return time. They don’t see the advantages of bookkeeping or accounting software, and they begrudgingly get everything together just for compliance and tax reasons at the last minute. The problem is, when they dump a scrapbook of papers on our desks, they do not understand we are going to be forced to charge extra for time and resources to get a semblance of financials together. If only they had been using our services throughout the year.

Clients who don’t value accounting are generally unhappy with the price, even though if you broke it out over 12 months time, the monthly fee is appropriate. Many accountants find themselves spending many hours on a client’s books, only to have them refuse to pay because they feel the bill was too high. At that point the work is done and you can’t recover the loss.

The best way to approach shoebox clients is to first deliver an upfront estimate and a breakdown of services you will be providing to put the financials together. By introducing them to cloud accounting technology you can demonstrate how they will be able to access the work in real time as it is being completed. Also, you can estimate the difference in fees the following year once you get them up and running and keep with it monthly. This provides a clear proof point on the value of the cloud, noting the potential cost savings.

When you are finished putting together the books for the first year, when you meet with them to go over what you did, start by showing them their real time cash flow including actual cash balance and outstanding payments on the cloud accounting platform. This will provide a more thorough understanding of their cash balance, as opposed to the ATM balance they’ve always relied on. Once they see how the cloud can provide data they can actually use, they will start to see how it can help them make real-time decisions.

The Desktop Clients

Members of this group use desktop accounting software. These clients are tied to software that run on two- or three-year cycles, so if they don’t upgrade they will lose support and access to other features like payroll functionality. A lot of them do the work themselves, or have family members doing the work, and they don’t have an accounting background. At the end of the year you receive numbers—but they don’t make any sense. So it takes a good amount of your time fixing the numbers and getting them in working order to complete the end-of-year work.

If they had given you access to their records throughout the year, you would have been able to correct accounting records as they happened. By sharing the same data, true collaboration can occur, and you can help with valuable business insights that would improve their business during the year.

A good way to approach current desktop clients is to prioritize which of them to speak with each year about moving to the cloud. Start by creating a running inventory of your clients and which software (desktop vs. cloud) they are using. This way you know when the desktop update is running out and when to approach them about the switching to cloud accounting. Then it’s important to provide specific benefits to their industry and business by showing them customized dashboards—specific to their business—that can help with business decisions, not only taxes.

Your Biggest Obstacle

The two biggest hurdles you'll face in convincing either type of client to switch to cloud accounting are pricing and security. A shoebox client may have to make an extra investment in a cloud solution, but the time savings and the seamless bookkeeping process is worthwhile. And desktop clients may believe purchasing a license is cheaper than a cloud solution, but they aren’t factoring in the maintenance costs of desktop software, hardware and all the surrounding software licensing needed. It’s up to you to educate them on the money and time savings associated with cloud accounting.

Additionally, stress that their accounting records are more secure with a cloud provider than in their own offices. Cloud accounting providers have to make a significant investment to protect the data and maintain all the pertinent security audits that would be way too costly for a business owner to keep up with on their own.

Whatever your approach, remember it’s all about providing value through sharing insights. They are paying you for the benefit of your expertise, so give it to them. Understand that if it doesn’t resonate at first, it will eventually, so give it time. As they come back each time with more pain, you can refer back to the conversation and see if they are ready at that future date. If you find the true key metrics that they watch in their business, and can demonstrate that they can get that information on a daily basis, you are sure to win them over.

Did you like this piece? Read more of Amy Vetter's cloud and technology stories.

About the author:

Amy Vetter, CPA, CITP, CGMA, is the Global Vice President of Education and Enablement for Xero. In this role, she is responsible for developing and executing Xero’s worldwide education strategy with a focus on Xero University (Xero U) and Xero TV. Follow her on Twitter @AmyVetterCPA.


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By Doug Binkley
Jun 25th 2015 20:11 EDT

There is a third hurdle - availability of functionality of the cloud accounting solution. Until Xero comes up with basic inventory and more complete payroll functionality, I'm stuck with clients using those older desktop systems, and cannot bring them to the cloud.

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