Don’t let FOMO delay you moving your practice into the cloud

Whenever I talk with accountants about cloud accounting I suspect that many suffer from FOMO. Sometimes their FOMO has worked in their favour and prompted them to take action. More often their FOMO is holding them back from making a decision. And the constant deferral of that decision is slowing down the development of their practice.

FOMO

FOMO is more commonly used to describe the anxiousness we feel that others might be having more rewarding experiences than us – often by attending an event to which we have not been invited. This causes a Fear Of Missing Out (FOMO).

Some of the sole practitioner accountants who want to work with me do so because their FOMO is related to the fact that other accountants appear to be more successful than them. Rather than simply continuing to work alone, a FOMO has prompted these accountants to seek my help and encouragement. That’s great, but it’s not the FOMO to which this blog post refers.

The concept of ‘cloud accounting’ software has been around for almost ten years. Throughout this time there have been commentators telling accountants that they must ’embrace the cloud’.

Some of the accountants who have done so will now only take on new clients who are either already using a specific cloud accounting solution, or who are prepared to move onto it. Others are happy to work with clients whichever cloud or manual accounting system they use.

Many other accountants have held back from exploring the options or from making a decision.  In part this is often due to FOMO. Or perhaps, more accurately a FOMAWC (Fear Of Making A Wrong Choice).

Is it worth it?

What seems to be happening is that many accountants are often NOT (yet) fully aware of how much potential cloud accounting has to revolutionise bookkeeping and accounting services. Nor are they aware of quite how much of an impact this will have on their practice in the next few years.

So there appears to be no urgency to move into the cloud. Any anyway before making any such commitment they feel they need to investigate at least 3 (or more) different solutions. This takes time and involves comparing features and benefits that don’t always turn out to be as relevant as you originally anticipated would be the case.
Is it necessary?
I do now think that the time has come.  For almost ten years I said there was no rush.  But MTD is now fast approaching.  Once it is upon us I believe that you will struggle to service your clients cost effectively if you are not using a cloud accounting system. I have heard stories of accountants who will take years to move all their clients into the cloud if they continue only doing so at the same rate as they have done in the last year or two. That will be too late for MTD.
As I have mentioned before, even I now accept that we are reaching a tipping point. This is indeed a direct consequence of my having attended the QuickBooks Connect conference in San Jose in November 2017 and other more recent exhibitions and conferences. There is so much more going on here than simply doing basic bookkeeping ‘in the cloud’.  Some people reference the eco system that ties into cloud accounting software. This generally refers to the wide range of related software applications that have direct links and which can populate and or draw information directly from the cloud bookkeeping system.

These apps provide many opportunities to enhance client service, to steal an edge on one’s competitors and to build a more successful and sustainable practice, faster than might otherwise be the case.  Accountants will start to lose out if they are unable to advise clients as to which apps work with their bookkeeping system and which are well suited to the client in question.

What is also clear to me is that accountants now need to adopt a cloud accounting solution for their own practice.  It is only after doing this that they really ‘get’ cloud accounting and can genuinely enthuse about the benefits to clients.

What’s the problem?

But here is the real issue. This is where the FOMO comes into play as there are so many options. There is a choice to be made. The decision will therefore take time.  Time we don’t have. We’re already busy and stretched. Yet we would want to make time to research the options, to compare them, to talk with other accountants and to decide whether to only work with one supplier or to work with more than one. And, which one to use for the accounting practice itself.

Perhaps we are also aware of the concept of conducing a ‘feasibility analysis’. Wow. That will be time consuming too. When your practice is running ok, it’s hard to even think about making time to conduct such an exercise in preparation for investing in some new technology.

Past experiences

Many older accountants remember getting their fingers burned when they first chose a desktop accounts preparation system, a tax return system or any of the other tech in which they have invested over the last 10-20 years.  Often the tech was oversold but many accountants didn’t feel it was so bad that they needed to look into switching to something new.

Accountants often feel trapped. They don’t like the system they have been using but they doubt that any of the alternatives would be sufficiently better. They also doubt whether the hassle of switching from one to another is really going to be worthwhile.

Plus, those past experiences also impact the decision making process. When choosing a new system or tech solution, we want to identify which features and benefits really matter to us and our clients. This isn’t always obvious until too late.

Necessary features and benefits

This reluctance to move forwards is understandable. But it can also cause stagnation. And anyway, you might not understand the real benefits to you and your practice of some of the features of the different options. This is a frequent issue in all works of life from choosing a new car, to a new kitchen and even a new laptop.

Some suppliers are wise to this and seek to get you on board with low cost initial offers – so you can effectively ‘try before you buy’.

What’s best?

Sorry, but I’m not in a position to recommend one supplier over another.

Online forums frequently reflect questions from sole practitioner accountants asking “Which is the best cloud bookkeeping system for a small practice like mine?” No doubt this is in the hope that a consensus has emerged as to the key options. However most respondents don’t have the experience to give a fully researched reply; they simply recommend the solution they have chosen – or the one they switched to after first trying something else.

This crowd sourcing of a short-list of options can be useful though, even if it rarely provides a definitive answer. What’s best for one accountant and their client base won’t always be best for others.

There is also the risk of making your choice only because it allows you to continue doing things the way you have always done them. This seems good initially as it minimises disruption. However it can also be very limiting and prevent you from taking advantage of new techniques that could help evolve your client service and to develop related advisory services.

Accountants I talk with who have yet to move their practice into the cloud feel that they can’t afford to pick one solution at random and then find later that it isn’t the BEST. So they put off exploring the options and making a decision. They have a FOMO and may end up with a less than optimal solution in due course when they rush to make a decision. And then they will be stuck with it – as they won’t want to spend time switching later.

I recommend that you book a series of one hour ‘Cloud bookkeeping research meetings’ (with yourself) in your diary over the next few weeks and set a deadline to move your practice into the cloud before the summer. I honestly don’t think you can afford to leave this any longer.

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Cloud accounting – Do you lead your clients or let them lead you?

This is the first of what I anticipate will become a series of cloud accounting related blog posts.

Back in 2009 I disagreed with those commentators who were warning accountants about an urgent need to embrace cloud accounting technology. The alternative, warned these merchants of doom, was that accountants who failed to embrace the cloud would go out of business.

I felt that such warnings were premature in 2009 and continued to think so until very recently. I believe however that we are, at last, reaching a tipping point.

More and more accountants are embracing cloud accounting solutions and an increasing number of clients are aware of the concept.  Plenty of accountants are being led by their clients and I often encounter firms who are happy to promote their ability to work with a range of cloud accounting solutions. This is often apparent from the inclusion, on the firm’s website, of a dizzying array of software badges and logos.

Other firms, including some pretty successful ones, do not take on new clients unless they are prepared to use the firm’s favoured bookkeeping solution.

I understand the arguments put forward by both sides.  In summary:

  • Anything for anyone: “We can help you, regardless of how you prefer to do your bookkeeping”
  • One size fits all: “We encourage our clients to all use [specific solution] as they find it easy to use and know that they will receive full support from us as we can focus rather than try to keep up with changes to a number of different online bookkeeping systems”

Advocates of the ‘anything for anyone’ approach don’t want to dictate to clients how they should do their bookkeeping. This is understandable especially if those clients have made an informed choice and/or have been using their solution for some time.  Some accountants have also concluded that different solutions are better suited to different types of clients eg: small businesses, contractors/freelancers and larger businesses. From what I have seen recently I’m not sure that distinction is sustainable as some suppliers offer different packages for each of those groups.

Advocates of the ‘one size fits all’ approach evidence a degree of confidence and are able to standardise their systems and processes. And this allows them to become more efficient whilst still providing a personalised service to clients. And then there are the range of add-ons and apps that accountants need to review and advise clients about. Which ones are worth their attention? If you don’t know what’s out there how can you provide pro-active advice in this regard?

There are plenty of reasons put forward by sole practitioners who resist specialising in a specific bookkeeping solution. These include:

  • A mistaken view that the ‘client is always right’. This is evidently not true as they pay their accountants for advice, not just agreement.
  • The challenge of having many clients using different solutions.
  • A reluctance to specialise in a specific bookkeeping solution as it might limit the number of new clients who would appoint you. This is the same concern as is raised in any conversation about specialisation. In practice the benefits typically outweigh the disadvantages.

What about you? When it comes to cloud accounting and bookkeeping solutions, do you lead your clients or do you let them lead you?

This blog post was not sponsored, but was inspired by what I saw, heard, and conversations I had at QB Connect 2017 about QuickBooks Online.

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