Cloud Accounting & the Future of Accountancy Firms

Since its inception in 2006, Xero has attracted more than 700,000 worldwide subscribers and everything we have seen in the market suggests that this will continue to grow rapidly. In our previous article on cloud-accounting, we discussed how we ourselves use Xero, and find it to be clean and easy to navigate. However, we have also quickly realised that whilst Austin Rose loves Xero for our business internally, the impact to business may not be so positive externally. A large portion of our clients now use Xero themselves and we have to wonder: how will cloud based systems impact the businesses we recruit for?

In recent years, we have noticed many accountancy firms striving to make a move from high-volume, low-value compliance work to higher value advisory services – a model which involves fewer clients but far closer relationships. In addition, we’ve seen changes made within firms in response to a greater desire for efficiency. This has been achieved both through more outsourcing of work overseas, and through using the flexibility of cloud-based solutions and better communications to enable teams to be relocated outside of the South-East of England to other areas of the UK.

As well as these changes to services and transitions in location, we have also noticed a rising concern in the market in relation to more intuitive systems – a worry that automation may perhaps impact staff assignments and therefore revenues. 

We spoke to Matthew Ashwood, of ansteybond, about this changing landscape. His involvement in entrepreneurial businesses, including tech-based start-ups, assured us that he could provide a great insight on what impact cloud accounting could have on accountancy firms. In response to a few general questions from us, here’s what he had to say:

All accountants are striving to advise clients and focus on areas that truly add value to their business. Xero positions us perfectly to do this.

I don’t foresee staffing levels changing but their roles will likely change. While some processing is still required, the focus of an accounting practice will move away from data entry to review, occasional correction and predominantly advice.

These packages are so intuitive and dynamic that it is inevitable that a large number of business owners who see them will want to utilise them. The only threat here is to the accountants who cannot support their clients to embrace this technology and all that it offers.

It seems clear, that rather than Xero being a threat to the accountancy practice market, it is instead a chance for evolution, and hopefully, greater success. Providing an accounting service that can present accurate and visually accessible management information can enable firms to offer more proactive and commercially valuable support to their clients.

Tuesday May 2, 2017