Hansens, a 27-person accounting firm in Victoria, was hit hard by the global financial crisis and its large investment arm suffered. The firm decided to get back to basics and focus on its accounting customers.
But first Hansens had to sort out its accounting software systems which had fallen into disarray. “I was getting very frustrated and angry and disappointed” with the setup at the time, says Trevor Schoenmaekers, a partner and co-owner of Hansens, pictured on right.
Hansens was firmly wedded to the MYOB Viztopia software platform for accounting and document management (now called MYOB AE Practice Manager). Schoenmaekers had been an advocate for MYOB – he sat on the vendor’s client advisory board – and Hansens was the first customer to move to MYOB’s new document management platform, Level 31.
However, MYOB didn’t develop the platform any further and when Schoenmaekers inquired he was told to buy MYOB Document Manager for $9,000. Once he had bought the program Schoenmaekers says he was told by MYOB that he had to replace the company’s two servers and buy a third, which would cost about $60,000.
Schoenmaekers was already unhappy with Viztopia’s workflow. Employees were sending out quotes by email and losing track of them. Clients were calling to say that they had received the quote and accepted the job but not heard back from the firm.
In March last year Schoenmaekers went to a Xero demonstration and decided to trial it. Within three months he had started changing his clients from MYOB to Xero and on 1 July he turned off MYOB Viztopia and cancelled his subscription.
“That saved me $30,000 a year. Then I was still trying to get the $9k off (MYOB)” for the Document Manager software, Schoenmaekers says.
Schoenmaekers says he spent $26,000 for the Viztopia software and another $26,000 training staff to use it. Despite the training, “it takes two years to work it out”, he says.
Cloud accounting vendors dramatically change the costs of doing business for accounting firms because accountants no longer need to pay for their own copies of their clients’ software.
Schoenmaekers estimates that he used to pay $36,000 a year for accounting software to manage his clients’ data files. Now he pays $79 a month for his document workflow program, WorkflowMax, which is also cloud-based and integrated with Xero.
The shift to Xero’s single ledger system meant that the company could start charging up-front fees and move away from billing customers for their time. Accountants who weren’t able to work without time sheets left, Schoenmaekers says. Work is not charged on time but on value to the client, he adds.
“I haven’t had one client say I don’t love it (moving to cloud software). The whole concept of cloud means that we don’t have to spend a fortune on software,” he says. Hansens has passed on efficiencies in doing accounts to clients by cutting their compliance fees.
Hansens had cut its staff from 27 to 18 in the wake of the GFC and due to efficiencies from using cloud software, Schoenmaekers says.
Hansens used to employ two bookkeepers to manage MYOB but now uses just one bookkeeper who spends half the time on Hansen’s own accounts and the other other half on all its clients.
Schoenmaekers says the change in fee structure has also transformed how much interaction staff have with customers. Meetings and phone calls are not charged to the client and staff spend much more time with customers in their offices or meeting in coffee shops.
The firm is now looking to downsize its 700-metre-square office which costs $220,000 in rent each year to three small satellite offices in the city, Waverley and Richmond.
“I’ve got the passion again to go out and do this again,” Schoenmaekers says.