Becoming a successful

Becoming a successful accounting firm

A survey from Xero of over 700 accountants and bookkeepers shows that cloud-based firms add five times the number of clients than traditional accounting companies...

Those accountants who

are already consistently using cloud software may not quite know the extent to which they are tracking in terms of growth in comparison to non-cloud accountants. For those who are still using desktop software, this could be the wake up call as to their potential.

Firms with a higher proportion of clients using cloud accounting software, such as Xero, have greater year-over-year (YoY) revenue growth. They show no sign of slowing down in this.

Cloud practices and traditional firms compared

The faster data entry and the automation of otherwise manual processes that cloud accounting allows, gives back valuable time to accountants and bookkeepers. This means they can focus on the bigger picture of their company, add more clients and better advise them. These consequently increase return from each client.

The survey that Xero carried out found cloud practices took home more per client than others, earning $7,070 compared to $4,476 average annual revenue per client in traditional firms.

Companies with almost all clients using cloud accounting had 15.5% more YoY revenue, where those using traditional practices had only 3.9% increase.

This just goes to show once again that those who are flexible and adapt to new technological advances benefit far more than those who are stubborn to change.

Switching it up

If you’re reading this and you are an accountant or bookkeeper still using traditional methods and want to take full advantage of all that cloud accounting has to offer, you may see the transition as a mammoth task. It’s not necessarily a quick process, but an organised and committed firm can make the journey smoother by having a plan in place, including key milestones.

Appointing staff specifically to convert clients to the cloud and to look after the day-to-day, and by prioritising your cloud strategy in the short-term over adding new clients, the process will be eased. Setting the expectation for this right from the outset shifts vision to developing a new way firm infrastructure and way of working.

Accounting firms who embrace diversity are most successful. Millennials are the largest generation in the workforce and their technological proficiency is key to smoothing the bumps in the journey to cloud accounting.

As more and more clients shift to the cloud, it is necessary to reevaluate billing. With many of the time-consuming daily tasks now automated, value pricing, as opposed to hourly billing, increasingly mirrors actual work being done. The expectation is set for clients as to how much they will be billed each month.

Although there is an overwhelming wealth of information to consider in moving to the cloud, having the steps in place specific to your firm will ease the journey and you will soon see the benefits to your business.

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CitrusHR and Xero join forces to protect SMEs

People issues are the most emotive. People problems keep founders up at night. Ever-changing legislation means that it’s a struggle for founders to keep their businesses fully protected. HR function needs to work seamlessly with other functions that are now in the cloud - e.g. finance...

Staff issues consistently

rank among the factors keeping small company bosses awake at night. Finally there is a service which integrates with Xero to take away the stress and hassle of employing people.

Q:

Why did you start citrusHR?

A: I knew from my own experience running a company, and from talking to hundreds of other entrepreneurs, that small companies all struggle with people issues. This is often about keeping up with employment law, but also with the admin, such as doing the wages and keeping track of holidays and absences.

My office manager came to me one day and said there had to be a better way than the paper forms we were using. I looked around for a database, and couldn’t find anything. I had just seen Xero, and immediately thought of the aged 22, and grew it successfully he recently sold to focus on

prospect of doing for HR what Xero does for accounting.

Q:

What exactly does citrusHR do?

A: citrusHR is a joined-up HR service for small companies. We provide qualified HR consultants that our customers

David Lester, Founder, citrusHR

He started a software company before selling. He then started startups.co.uk, the UK’s leading small business website, which can talk to, and we provide bespoke

citrusHR. David qualified as a Chartered Accountant with Ernst & Young.

@citrusHR

employment contracts and policies. Additionally we have developed powerful software which handles all HR admin which we update as the law changes.

Q:

How is that any different to other suppliers?

A: There are some large national HR suppliers, Peninsula being the biggest, which tick some of the same boxes as us. We believe the way that we tick those boxes is better—we are friendly and supportive; and because we only work with small companies we really understand what works and what won’t work. Many of our clients come from large national HR suppliers unhappy at the impersonal approach or that the suggested way of handling a staff situation didn’t fit their needs.

Our Legal Updates are a good example. Employment law changes fast, mainly due to court decisions, so we produce guides to all major changes—usually 3 or 4 a month. The difference between our coverage and other suppliers is our tone (making it easy for small businesses to understand) and by giving suggested advice.

Of course words are easy. So we go further and de-risk it for customers. The large national HR companies sign customers up to long contracts—often 5 years, but we’ve seen startups signed up to 7 years, which feels incredible. We operate on a one month rolling contract, just like Xero, so customers are free to cancel at any time with no penalty. This makes us very focused on keeping clients satisfied so they want to stay with us- and so far that’s working well.

Q:

Tell me about HR software?

A: Our software starts by putting everything you would expect to see in an employment file online, and making that available to owners and managers. We put customers’ Staff Handbook online, too. We calculate staff holiday allowance, including for part timers, and give all staff a log in so they can see how much holiday they have left, can apply for it online and their managers can approve it online. The software then adds online timesheets and approvals, sickness and lateness tracking, a training and CPD log, online appraisals and more.

Computers are much better than people at remembering things and doing the “heavy lifting” calculations. So our software works out if a company is ever paying someone less than minimum wage, which can happen inadvertently if someone turns 25, for example,

and we send out a warning to the company. We also warn about other upcoming key dates, from birthdays to maternity leave, work permit expiry, practicing certificate expiry, when someone has been late too often, and more.

The best example of this is probably our regular Payroll report. This gathers all the information on new starters, any leavers, and changes for existing staff (including hours worked for variable hours staff) into one report customers can export to put into their payroll software.

Our software also helps companies with Health & Safety.

And of course the software contains some great data, so we offer a suite of reports to make it easy to look up all kinds of information. We recently introduced a Holiday Accrual report, for example, to calculate a company’s accrual to comply with the new accounting standard.

Perhaps the best part, though, is how quick it is to learn and how easy to use.

Q:

How does that integrate to Xero?

A: We have built a staff expenses system following customer demand, and let staff charge expenses to clients and/ or projects and/or account codes. So a software developer could charge something to travel, say, on a particular project for one of their clients. Customers’ staff already have access to our software, so it’s easy for them to do this. We

let customers map codes to Xero’s chart of accounts and export the expense data as Bills payable to the employee.

But this is just the start. We will add time tracking to our integration this Autumn, so customers will be able to log time to the same analysis codes as expenses and raise invoices in our software. We And as soon as Xero’s UK payroll API is ready, we will integrate our payroll report to it, too.

Q:

Will GDPR affect this?

A: Very much so. Employees are people and will have considerably more rights to their personal data when GDPR kicks in. Our software will help companies comply, actually, making it easy to pull together the data they store about each person, for example, to comply with subject access requests.

Q:

What plans do you have for the future?

A: Lots! I am really proud of the service we have built, but know there is so much more we can do. We want to be the best HR supplier for most small businesses, and are working hard to help our customers more and more.