When you're on the hunt to start working with a new accounting firm, the decision isn't always easy. Everyone is promising you everything and it's hard to know which option to settle on. Since this will be an on-going relationship, one key consideration to make is to look at selecting an accounting firm model that jives well with the way that you like to work. Let's take a look at some reasons for why you may want to select working with a cloud accounting firm versus a more traditional model.
What is a Cloud Accounting Firm?
Whether you want to call it a cloud accounting firm, an online accounting firm or simply a modern accounting firm, these terms are used quite interchangeably.
Quite simply, if you boil it down to its absolute basics, a cloud accounting firm is an accounting firm that offers accounting services in a virtual/online environment. For this to happen, the firm has to have the right systems, tools and processes in place as the business model is a radical shift from what has been traditionally done in the past.
What Does That Mean for You?
The switch to a more modern model can have quite a large impact on small business owners, but, it's not for everyone. The very first thing I mention to interested small business owners on our initial assessment call is that we're not only trying to gauge the business itself but also the personality of those working at the business. We are trying to gauge whether you are open to change and whether you will enjoy working with us in the way that we work best.
Below I list 5 reasons why one would choose an online accounting firm versus a more traditional firm. These are of course generalizations (a more traditional firm can potentially have all of the qualities listed below) but I believe they hold true based on my experience from originally coming from a more traditional firm, based on my experience running a modern accounting firm and based on conversations that I have had with countless of my colleagues in similar firms around the world. From all this data, online accounting firms tend to offer 5 reasons for why one may want to work with a more modern accounting firm over a more traditional one.
Reason 1: Faster access to your financial data
Having access to your data is important in order to improve your decision making abilities when running your business. Should you hire another employee? Should you invest in a new website? Do you put more money into marketing? All of these decisions aren't possible if you don't have financial data to back this up.
By nature, online accounting firms use cloud accounting software. In fact, for the most part, they won't work with you unless your books are first migrated to the cloud. A by-product of being cloud-based is that you can then have anytime, anywhere access to your financial information.
More traditional firms, for the most part, are still using desktop accounting systems, and as such, these systems may reside at your accountant's office. As a result, accessing your data becomes more difficult.
Reason 2: Quicker responsiveness
Here is another generalization that I'm making, but we tend to notice that some of the more modern firms are "plugged-in" quite a bit more to email, Skype, Slack and other communication methods compared to some of their more traditional counterparts. Because of this constant connectedness, same day response time is often the norm.
I often hear from many entrepreneurs that I speak with complaining about the lack of responsiveness from their accountant. Based on my experience and judging from the communication that I have dealing with colleagues in the same space around the world, this largely has to do with the tools being used but also the culture instilled at this firms.
Reason 3: Improvement to business processes
Modern accounting firms are heavily process oriented. We want to know how to get your financial data into your cloud accounting system as quickly and as easily as possible. Because the accounting platforms that online accounting firms use are internet-based, we are able to integrate a host of third party apps to these accounting systems in order to improve the way that we get your financial data into your accounting system. This translates into a more streamlined and automated back-office for the small business, resulting in efficiency gains and time savings.
In order to effectively do this, we absolutely need to understand your business at a process-level to see what's working and what isn't and then come forth with process improvements when it comes to the financial component of your business. A streamlined system can't be put in place unless the business processes aren't first understood.
All of this stems from your online accounting system however. It's quite a powerful system and if we understand your processes, we can take you from something that's inefficient to something that's far more streamlined and automated.
Reason 4: More convenient meetings
Many modern accounting firms only hold meetings virtually, as opposed to in-person. Some business owners love this, some business owners prefer meeting in-person. The ones that we work with, for example, would rather not have to displace themselves and instead would prefer to have a meeting with us over Skype with screen-sharing.
This comes down to personal preference, but those that are exceptionally busy would probably benefit from having a convenient virtual meeting instead of having to drive around to simply meet their accountant in person. I feel the value of an in-person meeting is actually quite limited compared to time savings that can be spent elsewhere in the business.
Reason 5: Everything is paperless
When you're cloud-based, you need to find ways to work effectively with one another, and sending documents back and forth in the mail is certainly not one way of doing so. As such, online accounting firms leverage different technologies that allows for seamless collaboration without the need for any paper whatsoever. That means, no sending anything in the mail, no dropping any papers off at your accountants office, not waiting around to get papers picked up from your office... essentially, no paper at all.
Think it's not possible? Check out our Guide for Achieving Paperless Accounting to see how it's done.
Should You Switch to a Cloud Accounting Firm?
It all depends on how much you value the 5 items above. If these are not big selling points for you, then maybe you're all set. If you do value some of the items above, then you may want to consider moving to a firm that's a bit more modern.
It really comes down to how the online accounting firm executes however. If executed properly, the business will see efficiency gains, better access to data and an improved overall experience in a part of the business that typically comes with some of the most frustration.
The above article discusses things from the client perspective. If you're an accountant though, you might want to check out our post on what the pros & cons of working for an online accounting firm may be however.
Agree with any of the above? Disagree? Questions? Feel free to drop a comment below!
About Xen Accounting
Xen Accounting is an online accounting firm designed for modern day small business owners with one goal in mind: to improve your quality of life with awesome accounting. Through technology and a forward-thinking approach, Xen Accounting is focusing on delivering professional accounting services for businesses in the digital age. To contact Xen Accounting, please email [email protected]