At Solutions14 this past month, I was interested to learn that our community has finally started to embrace cloud technology as a not-so controversial method of delivering services. People are finally starting to understand that having their information on a cloud server and protected with redundant backups and armed guards is preferable to keeping data on your corruptible c:\ drive with poor backups. I’m really happy to hear that.
Now I think that the conversation is turning away from “should I” or “shouldn’t I” be in the cloud and turning instead toward “how do I do it?”
My husband, Scott Scharf, and I founded a completely virtual cloud accounting firm just over three years ago. We constantly receive questions about the services we provide (i.e, what the heck is cloud accounting anyway?), the tools we use, and how we provide our services.
As I alluded to before, people are slowly starting to understand that as long as you have a decent internet connection, you are able to work anytime, anywhere and that data is safely stored and backed up and accessible by you, your colleagues, and your stakeholders. That’s awesome, and it’s a game changer in being able to effectively provide services to your clients. This is likely not the first (or tenth) time you’ve heard this.
This is the question that everyone has now started to ask. Which software is better: QuickBooks Desktop (hosted), QuickBooks Online, Xero, FreshBooks , Zoho, Wave, Kashoo, or something else altogether? Unsatisfyingly, the answer is: it depends.
Greg Lam has written a ton of blogs comparing the features of each contender, and that will hopefully push you in the right direction. But before you can determine the right software, you need to have a strong understanding of two things: 1) who you are, and 2) what your clients need.
Who Are You?
Most important to developing your practice is figuring out who you are. When we first started out, I still had a small tax practice, and I was trying to determine how to be the best outsourced controller while also kicking butt at taxes. However, what I realized was that not only was it too difficult for me to focus on being the best in both worlds, but that I didn’t actually want to. I don’t really like taxes, but I love designing effective cloud accounting solutions for small businesses. So I split the company and got rid of the tax practice almost from the get go.
I thought that focusing exclusively on cloud accounting would simplify my business. And it did. For a little while. We had decided we were so adept at technology that we could be all things to all people. I was an Advanced Certified QuickBooks ProAdvisor, got certified in Xero in the summer of 2012 (when it was barely on the US market), and got certified on QuickBooks Online as soon as it was available as well.
What I found was that as long as I was the one doing all the work, this plan wasn’t a problem. But I didn’t want to build a job; I wanted to build a business. For me, that meant I didn’t want to be tied to my desk all the time, and I wanted a team of people who would be regularly supporting our clients – even if I wasn’t there.
And as our business started to grow, it became really difficult to have separate processes for each client as well as to develop and maintain training on multiple systems, especially with cloud technology developing at such a rapid pace.
Who Are Your Clients?
Once you know who you are, the next question becomes fundamentally important. Who are your clients? Knowing your clients helps you understand your clients and fulfill their accounting needs.
Each business industry has its own unique way of doing things. Law firms, construction companies, flower shops, and online retailers all have different accounting needs. So before you choose the tools you are going to use, you need to figure out who your clients are so you can adapt to what is best for them.
The advantage of gradually coming to the realization that we needed to specialize was that we had the opportunity to dive deep into many different tools. We talked to our team members and evaluated what we liked and disliked about the tools we used. We were wary of people and companies who promoted one tool as being perfect for every client in every situation, and we didn’t discount our options until we’d had the opportunity to vet them for ourselves.
We decided to become (or at least work toward becoming) a Xero-only firm. This was not necessarily because we think the other tools are substandard. If we had intended to have a firm full of job costing clients, we likely would’ve built our business using QuickBooks Desktop or QuickBooks Enterprise hosted in the cloud, but we didn’t.
We loved the simplicity and the smart way that Xero works and its ability to integrate with all of our other favorite tools. I’m sure I’ll talk much more about Xero in the coming months (in fact, if there’s anything you want to know, leave a comment, and I’ll be happy to include information in future blogs), but suffice it to say that we are huge Xero evangelists.
Finding our niche (ecommerce) meant that we could develop a core toolbox of Best of Breed tools (Xero, Stitchlabs, Bill.com, SmartVault, Hubdoc, ZenPayroll, and others). Since then, we have been able to streamline, dive deep with both the tools and our clients, and greatly accelerate the growth of our business.