The #1 Cloud Accounting Game Changer and What It Means For You
/We’ve all heard that cloud technology is shaking things up in the accounting world. I believe this is an opportunity for accountants to promote their advisory services and reposition the industry. At the same time, bookkeepers are learning technology and offering cloud integration services. As bookkeepers take on a more expanded role, I have read that some CPAs and CFOs are concerned those bookkeepers will take jobs away from them. Today I want to clarify how the shift to cloud accounting is benefiting the Controllers, CPAs, and CFOs out there, especially those who cater to small businesses and startups, and why modern bookkeepers should be their best friends.
In order to set the stage for that discussion, let’s talk about the biggest small business accounting game changer facilitated by technology. Do you know what it is?
It’s the availability of real-time financial information. It’s great that we have zero-data entry and that I can offer clients awesome invoicing and billing tools, seamless payroll, receipt management, and expense reimbursement solutions. Really, I love it, and my clients love it even more. But the biggest benefit for me as their outsourced CPA and CFO, is that I have easier access to a timely and accurate set of books. That saves me time, which saves me money, but let’s go deeper than that.
A traditional accounting firm produces monthly financial reports by the 15th of the following month (hopefully!). These reports tell business owners and managers, as well as their CPA and CFO advisors, how the company is performing. The sooner businesses can react to this information, the better. With today’s cloud accounting software, it is feasible to perform daily reconciliations and faster monthly closes. Imagine how real-time insight into a business’ financial position might affect decision-making. As the Controller, CPA, or CFO you should take that information and interpret it for your clients. You should search for trends such as increasing revenues or costs, spot problems and opportunities, and advise clients on how to increase profitability. You should have a regularly scheduled management meeting to review the report and business performance.
Why are regularly scheduled management meetings so important?
According to the Small Business Administration, about half of all new businesses survive five years or more. About one-third survive ten years or more.* Tech startups have the highest rate of failure with 92% failing within three years.* I believe that more small businesses and startups would succeed with the help of a proactive financial advisor. Unfortunately, entrepreneurs are usually cash-strapped and only seek the minimum accounting services necessary for compliance. They are worried that their accountants will bill for every minute on the phone, and so they refuse to ask the real questions that matter.
So how do modern bookkeepers (aka certified bookkeepers, accounting clerks, accounting technologists, and cloud integration specialists) fit in?
Bookkeepers and accountants have always gone hand in hand, but cloud technology brings this into a true partnership. Controllers, CPAs, and CFOs can only add value with an updated and accurate set of books. With their specialized knowledge and expertise, CPAs and CFOs should not be “cleaning up the books.” It’s a waste of valuable time and their clients’ money! Those who still pay homage to the billable hour probably don’t care what services they are providing for their clients, but there are accountants out there who want to make a difference and add value to their clients.
Modern CPAs and CFOs recognize that accounting and advisory services can and should be more accessible. They are recommending cloud accounting technology to increase efficiency and reduce costs for clients, as well as professional bookkeeping services to implement and maintain the accounting systems. They bundle their Controller-level services with CFO-style management meetings. These measures save busy entrepreneurs valuable time and make the complete package more affordable. What’s more, they make it possible for modern accountants to become what their clients truly need – a trusted proactive advisor.
Technology is improving small business access to financial advisory services. It’s also creating a deeper partnership between bookkeepers and the accountants, CPAs, and CFOs they work with. The fact is that CPAs and CFOs need quality bookkeeping performed, so that they can access updated reports in order to serve their clients. This is nothing new. The difference that cloud accounting technology makes is that it’s possible to have real-time financial information on clients, access KPIs for last week, not last quarter, and facilitate meaningful, timely conversations about company performance.
So, if you’re a CPA or CFO, I’d love to hear your thoughts. Are you providing proactive advisory services to your clients or do you stick to compliance? Are you having trouble switching from traditional accountant to trusted advisor? Do you find it hard to find modern bookkeepers and cloud integrators to recommend to your clients?
I feel your pains, but don’t worry. I can help. Subscribe to find out how.