Where Do Compliance-based Firms Fit in?

Keri Gohrman
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From the very beginning, Xero’s playbook for accounting firms has been pretty unambiguous in its support for those seeking to move towards offering advisory services, but that perception could change as compliance-based firms are more in their scope.  

Apocalyptic predictions about the future of compliance-based work were matched with a flurry of tech developments introduced to automate, automate, automate wherever repetitive tasks could be found. And it’s been a good story that many software vendors have mimicked. 

The logic of robots taking the strain to make room higher value services all stacks up. So, it was a moment to note when executives took a slightly different tack at Xerocon in Atlanta last week.

President Keri Gohman spelled it out in the opening session.  Yes - you can expect to grow revenues by 29 percent - according to Xero’s numbers - by following the playbook to a world of ‘complex’ advisory services. But wait - if you’re not quite ready for that - that’s OK too

Firms just doing compliance work, far from dying out, are still able to grow by 11 percent on average (with the help of automation to push efficiency, of course).

So what’s happened here? One reading is that the anticipated gold rush to advisory has not materialized as quickly as predicted. Are Xero simply positioning themselves to welcome those who have yet to drink the proverbial Kool-Aid?

But I think there’s more to it. As new VP Business Growth America’s, Ben Richmond explained: “We’re finding that if firms simply engage more regularly with their clients through the course of the year they inevitably uncover areas of pain that they can naturally help with.”

Richmond also introduced the concepts of ‘Simple’ advisory vs ‘Complex’ advisory as a more gradated path for transitioning a firm, stating “We’re not seeing this as a binary thing and firms don’t necessarily need to know their destination when they start their journey”

In short, Xero have always been good at picking up on the zeitgeist of the accounting profession. Let’s see how the rest of the market responds to this change in tack.

About Andy North

Andy North

Andy has been part of AccountingWEB since 2001 - initially running the UK operation until he moved to the US in 2015 to take over AccountingWEB.com.  

Currently residing in Boston, Massachusetts, Andy takes an active interest in how the accounting practice world is changing and evolving on both sides of the Atlantic, and regularly consults with vendors to help them build engagement with the profession.

 

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