Accountants need to advise on running their clients’ businesses, not just tax.
I spoke to Hamish Edwards, co-founder of New-Zealand cloud accounting software vendor Xero, about what qualities he thinks a cloud accountant should have.
As described previously, I’ve used the term “cloud accountant” to mean someone who uses cloud-based accounting software for real-time financial reporting to clients and who has a wider knowledge of cloud applications that could support a business such as office applications, customer databases, online marketing and so on.
You can read how Saasu’s Marc Lehmann responded to the same question here.
Hamish is well placed to answer as he is an accountant himself. He sold his own accounting practice to global accounting firm Deloitte earlier this year.
“Deloitte wanted to have the knowledge of how you make cloud or Xero specifically to move the needle on all the KPIs – average fee per client, average hourly rate, all those things,” he says.
Here’s his list with edited quotes from several conversations on the topic.
A cloud accountant should
1. Use a single-ledger accounting program like Xero. “When you use Handisoft you have to do the end-of-year accounts in a completely different ledger to the one the small business owner is using. Which means that every year when you had to do the books you had to make a whole lot of adjustments and changes every single time. it’s inefficient.”
2. sell fixed-price services. “You should be expecting a little bit more information on a regular basis such as quarterly accounts. The reason is the accountant is connected to the ledger and there’s no friction to get to the data so therefore they should produce reports very quickly.”
3. understand the systems requirements of a customer’s business. “That will require a broad understanding of other cloud applications that will be beneficial to that business. I believe the future of the accounting services industry is around information.”
4. advise in all areas of technology. “It’s not just cloud apps; what could they be doing for example with sales teams using iPhones? What technology do we think about that improves productivity in a business? The accountants of tomorrow should show leadership and advise in all areas of technology – data plans, devices, hosting, backups, security.”
5. convert their own business to the cloud. “They should have a strategy to say, ‘Our end state is to get our servers out the door. If they’ve never done it then they won’t see the intrinsic benefits and you’ll be telling customers to move to the cloud when you haven’t done it yourself.”
6. know what the cloud means for commerce in general. “I don’t really think that there’s that much education going on in this space just yet. It’s about reading and listening to thought leaders and looking at what’s going on rather than attending formal training because I don’t think it’s there yet.”
7. act like a virtual CFO. “The expertise you should expect is more general business advice to improve their business. Improve their cashflow, capability, expand their business. They should also understand systems and the value of real-time information and which sorts of information a business should think about.”