The Power of the Cloud in Strategic Advising Services: 4 Things You Should Do Now


Power of The Cloud

Remember the computing world just 10 years ago? Efficiency meant waiting for the next software upgrade and worrying that everyone we needed to work with had the right software version, so files could be shared. Remember compatibility lists, and the whole hassle over Mac files versus PC files? Good grief!

Cloud computing brought about untold efficiencies, as well as comfort in the fact that our files would always be accessible, secure, and the most up to date. As accounting firms build their Strategic Advising services, it’s smart to have a “cloud-first” mentality. Why?

Accountants and the cloud

The accountant’s job is no longer solely about accounting for the past—it’s utilizing the power of real-time data to plan and execute the future. Strategic Advising using cloud applications means that firms can leverage real time data to help their clients plan and execute strategies for growth. It’s great for clients, but it also creates efficiencies that can translate into increased margin and new revenue opportunities.

Cloud-based solutions are also generally more secure and accessible, and there is a vast array of solutions available—solutions which are routinely upgraded and updated by their providers.

Cloud accounting growth

The explosion of cloud-based accounting is impressive. During his presentation at SA Blog- Power of the cloud (a).png Scaling New Heights this year, David Leary, Small Business Ecosystem Evangelist at Intuit, shared that the global cloud accounting market is currently over $3.5M and growing at 40 to 60 percent per year. He went on to say that “based on that growth, in a short 18 to 24 month period, cloud accounting will be bigger than QuickBooks Desktop ever was.”

Intuit has over two million paid subscribers to QuickBooks Online. The below chart, used with Leary’s permission, shows Intuit’s aggressive growth; see the arrow pointing to when they opened QuickBooks Online to app developers.

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Intuit isn’t the only game in town. Xero’s boom is a Cinderella story. They rose from nothing to wake a sleeping giant: QuickBooks Online. The competition has been excellent for the marketplace. We now have accounting platforms with open APIs, welcoming third party apps to complement (and complete) their robust platforms. As an accountant, you can set up any configuration of applications you wish to service very discrete customer needs, and access all of it from mobile devices anywhere in the world where there is Wi-Fi or a cellular signal.

How the accounting industry has changed in response

The AICPA has responded to the emphasis on specialized services; this year they added Evaluation and Analysis as primary components of the exam. Evaluation and Analysis are the core skills of advisory services, or Strategic Advising, as we call it in the LivePlan Method.

Strategic Advising is a special part of an accounting firm’s offering, and includes growth advantages to a firm when implemented in a standardized, scalable way. Value based billing, client retention, and increased firm valuation are all advantages of Strategic Advising.

Good advice, from a well-prepared accountant, coupled with an experience the client can rely on, translates to happy customers and business growth.

Focus on these 4 things to enhance your advisory services

SA Blog- Power of the cloud (b).png Strategic Advising in an accounting firm is much morethan an ancillary service; it should be the foundation of a firm’s relationship with each of their clients. Everything you do for your client should be thought of as a piece of your broader advisory relationship, and the software applications and other resources you use should be geared toward supporting that relationship.

1. Make cloud-based applications a priority

Accounting firms who offer Strategic Advising must be at the leading edge of technology—for themselves, but mostly for their clients. A firm positioning itself as a source of business growth advice should look, feel, and be ahead of the game! It’s not about month-end reporting and becoming mired in transactional wizardry, or about your favorite features in your accounting package. It’s about real-time data and the power of automation—and it’s all living in the cloud!

For Strategic Advising to be truly successful, it must be flexible; it needs to be able to occur anywhere, at any time. Clients want that flexibility, and if they don’t realize right away that they want it, they will soon enough. They will either find it from you, or someone else. A desktop-based environment simply does not allow enough flexibility to be collaborative with your client in the ways that are necessary for an advising relationship.

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I believe it’s even fair to say that an accounting firm that does not make cloud technology its primary focus will lose an eager and broad customer base in millennial small business owners, who expect to work not only in the cloud, but from mobile devices much of the time. The millennial generation are no longer children, and in five to ten years they will be at the forefront of our economy, either owning or working in small businesses, or as skilled accountants who will expect to work in accounting firms that utilize advanced technology.

2. Adopt a cloud accounting solution for every client

Take a leadership role in moving every client to a cloud accounting solution. Your motivation should be less about looking for a solution that looks and feels like the desktop application you are used to, but more about how to make a cloud application work for your clients.

Let your transactional work occur automatically, with tools like QuickBooks or Xero and the various add-on applications that make them so much more powerful than a desktop version can ever be. The success of your firm and your work efficiencies are too important to ignore this shift.

I had a lovely chat with David Bergstein of Intuit in preparation for this article, and he emphasized that not only should QuickBooks Desktop (QBD) not be compared to QuickBooks Online (QBO), but that the use case for the two applications is entirely different. Said Bergstein, “It’s time to stop comparing the two products, as they are really different. The cloud offering of QBO really has no limitations on how you can use it, because of the rich ecosystem that has been built around it. LivePlan is a great example, as it automatically pulls the data directly out of cloud programs such as QBO seamlessly, as if the two tools are one. Everyone wants to have real-time information today and that is why QBO is being used by over 2.2million users at this point.”

If the attraction of the efficiencies of cloud accounting alone is not enough for you, remember that eventually your favorite desktop accounting solution will no longer be supported by its parent. The shift at Intuit, for instance, away from its desktop application, is apparent. In 2013, Intuit stopped development on its sync manager, the tool that allowed third party applications to connect to QuickBooks Desktop.

At the same time, Intuit turned more resources toward their cloud API. They are planning to release an upgrade within the next year, which will open further connections to data points within QBO, says Noah Parsons, Palo Alto Software’s Chief Operations Officer and member of the Intuit API advisory board. This will allow third party app developers like LivePlan even greater flexibility in providing niche solutions to make your life easier.

3. Minimize security risks

Apps hosted on the cloud are more secure. This might seem counter-intuitive, but most security breaches occur due to vulnerability from outdated software. The latest ransomware attack WannaCry is a perfect example of the vulnerability of outdated software and the threat to data stored on computers with those outdated operating systems.

Are you 100 percent certain that every computer in your office is currently upgraded and patched on the latest and greatest version of all its software? And if you are, how much does it cost on a monthly basis to ensure that? It’s a costly proposition, literally and figuratively.

Selecting applications from reputable sources, like the Intuit App Store, can also increase your security. Their vendors are required to comply with Intuit’s very strict security measures, and they’re reviewed quarterly, so you can be confident that those apps are vetted and monitored by companies with the resources to ensure security.

Nothing an IT department at a stand-alone company can do would come close to the security intrinsic to this combined setup of marketplace applications and web hosting. Coupled with the internal savings of a reduced IT budget, this means higher security for less money. Invest those dollars in upgraded computers and add-on software apps to service your clients!

4. Build your advisory ecosystem

With your cloud accounting solution in place, build your ecosystem of apps. Spend the time and do the research, and be sure you’ve explored all of the add-on options to customize your accounting solution of choice. There are many to choose from—both QuickBooks and Xero have 500 applications that sync with their respective accounting packages. Those solutions will work better for your clients than what is currently contained within your desktop application, almost without fail.

If you are looking to “go niche” by focusing on specific industries—a very effective model for an accounting firm—you can customize so much more with add-on apps. Says DavidSA Blog- Power of the cloud (d).png Leary of Intuit, “QuickBooks Online plus your niche applications of choice is pound for pound a better solution than QuickBooks Desktop. QBO plus its various apps is a 100 percent solution, where QBD at best will only ever be an 85 percent solution.”

I know it can feel daunting. I have a background in systems integration: the work of finding software toolsets and other resources (sometimes physical) to solve a problem in a business. You have a job to do—you have a service to produce and sell, and you need software and systems to help you do it. This is where your efforts should be focused.

A broad (but effective) step-by-step for selecting apps for your business:

  1. Start by making lists of the services you now offer (or would like to offer). Strategic Advising is an example of a service.
  2. Write procedures that make sense to complete those services. You can write best case scenarios if you don’t have existing procedures—you have to start somewhere! The LivePlan Method would be an example of a procedure list for advisory services.
  3. From those procedure lists, software resource needs will become apparent. Start sourcing the software you need to get those jobs accomplished. LivePlan, or other business planning and reporting tools, would be an example of a software resource.
  4. Other applications you’d want for your advisory-focused ecosystem would be a pricing application like Cloud Pricing, and a workflow toolset like JetPack, Karbon, or Asana. Even Basecamp can work very well as a task management system and collaborative workspace with clients too.

This method of writing lists and procedures will force you to become agnostic about your choices. Be mindful of selecting software for the wrong reasons; for instance, maybe you’re focused on a solution because your peer is using it at their business SA Blog- Power of the cloud (e)-208955-edited.png and it works for them. Or, maybe you’re trying to integrate lots of free software thinking it will save you money, but free is not always better. Your efficiency will likely increase with a more robust solution, and remember, extra margin lives in your efficiencies. Whatever the reason, you want to be sure that the toolsets you choose exactly line up with the type of work you want to be doing. Lucky for you, the sky’s the limit!

Pro-tip: Look for signs of longevity

Be mindful of the staying-power of apps. Look for apps built by companies with a history of supporting their solutions in the marketplace. While there are solutions from some great upstarts (we use Slack in our office), in general, if you are building an ecosystem to serve your client base for the long term, you want to be sure the toolsets you choose will grow with you.

Palo Alto Software, for instance (maker of LivePlan), has been around for over 25 years building business planning software. In addition, we have a dedicated CustomerSA Blog- Power of the cloud (f).png Advocacy line, and a wealth of no-cost resources on Bplans. Twenty five years doesn’t have to be your benchmark, but do set a standard for yourself in this area. You want a system of applications you can rely on for the long term.

Build an ecosystem to be your machine, humming in the background, while you sit in the driver’s seat helping your clients achieve their dreams! Finally, be ever mindful that the accounting industry is moving toward a new standard, both around cloud accounting and Strategic Advisory services. Make sure you are part of it, building and growing your business to be successful for the long term.

Kathy Gregory
Kathy Gregory
Kathy Gregory has over 20 years of experience in business development, including: financial forecasting, strategic planning, process development, project management, and mergers and acquisitions. She has worked in public and private, small to mid-size organizations doing business development, and strategic planning and implementation, working with executives, boards and their investors. At LivePlan Kathy runs the specialized program for Strategic Advisors. She is a graduate of the University of Oregon.
Posted in Advice for Strategic Advising, Business Process for Advisory