As Xero passes 120,000 customers in Australia, there is plenty of work for accountants in helping businesses move from desktop accounting software to Xero. The conversion process itself is becoming commoditised but additional services sold alongside each conversion can generate a good revenue stream for accountants.
Xero announced at its February roadshow a free conversion service for its Australian partners. The service is largely automated and is handled by JetConvert, a well-known MYOB to Xero conversion specialist.
However, under the program’s terms and conditions partners cannot charge a fee for data migration component of the conversion. The accountant’s fees can only relate to additional training and support services.
While cases vary by client, the support component is usually time intensive and rarely automated. When those support fees are singled out a client may logically ask what is the accountant doing to help me make the transition to Xero and are their fees justified?
Support can be classified in three broad categories: pre-conversion checks, post-conversion cleanup and software training services.
In far too many cases, clients believe that their MYOB files are perfectly kept, a problem exacerbated by either lack of accounting knowledge or poor owner oversight. Both Xero and JetConvert provide some guidance on how an MYOB file can be prepared for conversion.
As the saying goes, “poor information in, poor information out”. And since it is the accounting partners who will be handling the “poor information” post-conversion, the burden of pre-flight checks as well as the perceived success of the conversion rests with them.
At a minimum, accounting partners need to understand the conversion process, carefully select suitable clients and flag possible issues in the conversion with clients before they happen. This requires developing a level of conversion expertise and committing a certain amount of time to each conversion, both of which need to be factored into the support fees charged.
Post-conversion cleanup is closely linked to pre-conversion checks. The more thorough the pre-conversion process, the fewer surprises and work to be done post-conversion.
Common and time consuming post-conversion items may include collecting and entering missing employee information, adjusting the chart of accounts and reporting layouts, adapting client’s processes to function under Xero’s tracking categories, verifying batch payments setup and of course establishing the bank feeds.
If a client’s accounts were out of balance or did not reconcile prior to conversion, they will not reconcile or balance post-conversion either. The ability to fix these errors may be diminished while the client is getting used to the new accounting system.
It is not ideal to have a conversation with the client about the fees for additional work at this stage. That is why developing the ability to flag potential problems, along with a clear engagement letter that outlines post-conversion responsibilities, are important components in managing the client relationship while helping clients manage the change of the accounting systems.
While pre-conversion checks and post-conversion cleanup are important, they largely take place in the background. If done right, the client will not know that anything has been done at all.
This is radically different to post-conversion training, where clients rely on accounting partners to establish best practices in using their new system.
While Xero provides a wealth of training resources, clients are usually willing to pay for tailored training solutions. As such, accounting partners need to be prepared to either develop Xero specific, in-house training programs or outsource to specialised training professionals.
Image credit: Imbecile.me (It’s a jet converted into a bus. Obviously.)