The practice for the future – 2011 and beyond

As the year draws to a close ( I am certain that someone has nicked a few days from it, it has gone so quickly), I  started to think what 2011 would bring as far as the Cloud was concerned and how accountancy practices in the second decade of the new millenium should adapt to meet the challenges ahead.

Whatever the opposing views may be of the Cloud and its relevance or suitability for the accounting profession, of two things I am absolutely certain – 2011 will be the year that the Cloud  starts to gain traction and – accountancy practices that do not change and adapt to what clients now really want – and need – will fail. 2010 saw the collapse of Vantis and that should serve as a lesson to everyone in practice – large and small – as to how not to run an accountancy services operation in 2011.

Let me expand on this. In the past six months I have had the opportunity of running my own practice in the way that I wanted to do it without interference from remote individuals with no understanding as to how client relationships should work. One of the first steps I took in setting up RFM Associates was to ban the use of time sheets when working on clients affairs and adopting a value approach when pricing projects for clients.

This is not a new approach and indeed there has been a major move to this with professional firms in Australia and some parts of the States. The reasoning behind it is simple. Firstly, time sheets are never a true reflection of the time taken on a job – in reality they are a device where staff, and Partners, need to fill in a certain number of chargeable hours a day and who hasn’t taken a “generous” view on the time of a phone call or managed to make an hour consist of 45 minutes in order to meet those minimum hours requirements.

Secondly they do not accurately reflect the value of the work done for the client – and I don’t just mean monetary value. A simple set of accounts may only take 4 hours to complete – but if the discussions with the client indicate that they are urgently needed to secure some funding or the completion of a major deal their value becomes more than the sum of the parts involved in putting them together. Likewise, if a set of accounts should only have taken 4 hours to complete, but because of poor work or planning by the staff member concerned they take twice as long, the cost and there by the value to the client should not change as a result.

It is so much better for client relationships to agree the value of the work proposed – and hence the fee – before hand and stick to that. On some jobs, on a strict time basis, you might loose out – on others you will most certainly gain and in the long run the relationship with the clients moves from the unpleasant fee negotiations to a valued advisor and contributor to the business concerned.

And this leads on to the next issue – Service. The Cloud has gone through very many descriptive changes in its relatively short life, but the one that I think is most suited to todays requirements was Software as a Service. The clue is in the title. The work that accountants undertake for their clients is far too often treated almost as if what we are doing is a a big favour and to do it on our terms and within our requirements or pay the price – literally. There is far too little consideration of the service aspect and the recognition that what accountants are selling is a Service and as such should be provided in conjunction with the clients requirements and needs – not just what suits our working practices.

The modern practice will work with clients in a way that serves their needs and requirements in an efficient and cost effective manor, using upto date technology that really does add value for the client. As I have postulated in many previous articles, if you are going to bulid your practice on the back of being a Sage Accountants Club member, what is going to distinguish you from every other practice in your area. Boasting about how many versions of Sage you hold on your server to deal with all the various versions being used by clients is not going to win you points – it just makes you look daft.

And this where the Cloud will continue to gain acceptance and become – de facto the mode of delivery in the year ahead. Clients want flexibility, ease of delivery and value for money. They want to work in a way that suits them – not their accountant. Staff also need the flexibility of remote working quite apart from the efficiencies it brings by avoiding the need for travel to remote locations. In my role consulting for E-conomic, I come across more and more firms that have adopted this approach. They work with their clients offering them online solutions which facilitates and improves service delivery and document access and their clients love it. A recent meeting that I had with a client in a hotel near to his business encapsulates the point. He had his Ipad, I had mine and my colleague her laptop. We are all looking at the same financial information and discussing his monthly management accounts in a way that was suitable and appropriate for this age of technology and information accessibility.

So my messages is simple – shape up or ship out. 2011 is the year that working methods and client relationships will change once and for all – and for the better.