Welcome to the sixth edition of this video series where we talk you through The 10 Big Advisory Questions.
Join Micheal as he answers Question 6 – Isn’t Cloud Accounting the Answer to Advisory Services?
The below is a transcript of Question 6 of the 10 Big Advisory Questions Video Series – Isn’t Cloud Accounting the Answer to Advisory Services?
My name is Micheal O’Neill and I’m delighted to welcome you to this video series where I answer the 10 Big Questions About Advisory Services.
These are the questions that I get asked by my clients in Ireland on a regular basis, and also the questions that my colleagues in the UK, US, Canada, and Africa get asked.
So let’s get started with today’s question.
Question six, “Isn’t Cloud Accounting the Answer to Advisory Services?”
You know, this is something that we hear quite often. And it’s funny because you’ve got the two camps. You’ve got the people who think that the cloud accounting and software is the answer to all their problems, and then you’ve got this other camp who think that cloud accounting is the end of accounting as we know it, and it’s going to eventually put all accountants out of business.
It’s kind of funny, you’ve got these two camps that are sitting directly opposite each other. The fact is, neither of them is true.
There is no doubt that we need to adopt cloud accounting, this is absolutely essential.
It will help deliver hyper-efficient compliance services, and then there are all the other benefits that can arise from using cloud accounting packages. But we have to make a distinction between reporting of financial data, no matter how fancy, and advisory.
You see, the thing is that identifying problems and pointing out issues and problems to clients based on their figures isn’t really what the client wants. It’s not client-centric, it’s not an advisory-led approach.
And to be honest, if we remember what I mentioned in some of the earlier videos, entrepreneurial business owners, don’t like problems! They don’t like being presented with problems.
And simply printing out something from Xero or one of the other cloud packages which flag red lights and their green lights, may not be what they appreciate.
However, it can play an essential role in managing the key performance factors, and to help their clients achieve their goals.
The real thing here is that all financial information is so massively valuable, especially when we’re harnessing it and interpreting it for our clients.
It’s going to help massively on that path to achieving their goal, however, it’s not the solution, it’s not the answer.
It certainly aids the advisory process, but it isn’t the solution itself. Let’s look here at how it all fits together.
The first thing is, we need to understand the client’s most important thing. Meaning, what are the client’s key motivators, what are the most important things to your client about being in business? And from there, we can start identifying what their goals, their objectives, and their overall aspirations are.
We then create a plan, and the plan is a core to advisory services. It records the client’s goals, aspirations, and that’s a part of our annual strategic session.
Then from there, we look at the data in our quarterly or bi-monthly meetings depending on the package or path your client is on in relation to advisory and that reflects on your progress and performance.
So we can see here, it’s a cycle.
First, we analyse drivers, then we look at a plan, from the plan we need to maintain momentum. In this phase, we identify what the roadblocks are.
That then brings us into problem solving, so then we can get into consulting mode and we can get into really helping our client on a problem level. Then from there, we look at a fresh annual review, analysing the drivers again, because remember, what your client’s primary drivers are today may not be their drivers next year.
It’s an ongoing process, and we support them along the journey with the data that we are getting from our cloud accounting packages.
Then as progress, as our plans develop, we’re going to encounter various other areas in which we’re going to have to help and support our clients.
Like, Wealth Management, KPI management, profit improvement, top line growth, corporate finance, tax planning, risk management, team and culture development, succession, cash flow.
It’s a continuous, ongoing process that is showing the client that we’re in for the long haul. We’re supporting them all the way through the life cycle of their business, and again, we’re moving up the value chain.
Now, as well as the camp who say that, cloud accounting is the answer to advisory, there is also this other camp who says that, Cloud accounting is ultimately the demise of compliance and the accounting profession, and that, “with cloud accounting, there’s going to be no room for the accountant anymore. Now, I also don’t think that this camp has it correct either.
It is true that cloud accounting has demystified, to a certain respect, the services that we provide clients.
Going back 20 years ago, accounting was looked on as a dark art, it was accountants huddled over spreadsheets who got accounts to balance, and nobody really knew what they were doing.
And then with the advent of cloud packages like Xero and Sage, and all the other players’ clients started saying, Well, hold on here, now. So, you just put the figures in, and the stuff comes out the back end, and that’s all accounting is.”
This is starting to devalue and demystifying the compliance services and work that we’re doing, the but that’s okay.
What we need to do is, embrace it. It’s not going away, we can’t turn our back on it, we can’t pretend it’s not there.
We have to adopt it, we have to become hyper-efficient with our compliance services, and then also extract as much data and information as we can in the most useful manner so that we can leverage it during the advisory process.
And that’s really where, we have to look on this as both an opportunity and a benefit that’s being given to us, and really take it on board, and see how we can best get out of it.
So that’s question six of our 10 Big Advisory Questions.
“Isn’t Cloud Accounting the Answer to Advisory Services?”
If you haven’t seen the first videos in the series, please do go find them and check them out now.
Make sure to keep an eye out for the remaining series where I deal with some of the other big questions in relation to advisory.
And from me, good luck, goodbye.
Thank you for listening and I’ll talk to you soon.
How do I find the time when I’m so busy? Look, if you haven’t seen the first four of the series, please do go find them, check them out.
Make sure to keep an eye out for the remaining series where I deal with some of the other big questions in relation to advisory.