What is the difference between a traditional accounting firm and a cloud-based accounting firm?
When you boil it all down, the only real difference involves location. In a cloud-firm, the software, data, staff and clients can all be located “somewhere else.”
Making the switch is really not all that complicated. In fact, Poe Group Advisors has done it…and we didn’t even know that’s what we were doing. It all started when we moved our CRM into the cloud over 10 years ago.
There is a lot of industry buzz about cloud-based accounting firms. We’ve sold a few of them and I must admit, they can be kind of mysterious and exciting. However, when you look very closely at them, they really aren’t very different from most traditional firms. The fundamentals are very much the same. Practices still need knowledgeable staff and great clients in order to thrive.
So, what’s the crucial difference? Cloud systems do a better job of allowing practices to automate processes while doing more for clients because of the superior quality of tools available on SAAS platforms. For a deeper dive on this, listen to our podcast with Blake Oliver. These key advantages will accelerate over time.
Evolution, not revolution
We haven’t even seen a 100% pure cloud-based firm. We find that firms fall somewhere on a continuum. Gradually, all firms are going to be cloud-based. It will likely happen slowly for most. That was our experience. The driver for us was that we knew we had to serve clients all over North America. In our niche, we couldn’t survive otherwise. We naturally gravitated toward easy-to-use SAAS platforms that made collaborating from afar easier for our clients. Then, we found a really good team member who happened to work in a different city, so we had to find the best tools to collaborate virtually as a team. Perhaps the biggest change needed to evolve is just being open to the possibility of going after different markets and/or staff who are not local? This is a slight change in mindset that can make all the difference.
What are the key opportunities offered by going cloud-based?
The software is going to get better. The improvements will likely accelerate and the ability to niche will also accelerate within the industry. The opportunity to increase efficiency through automation and to therefore better utilize talent from anywhere are major advantages of these tools.
What software won’t do
Cloud-based applications aren’t magically going to make your practice more profitable. You still have to lead and make good basic business decisions like hiring, pricing and client selection. Your clients and staff are still human after all. Leadership and management skills are still essential. Scaling a service-based business will have many of the same challenges.
In summary-it’s not magic and it’s really not that hard to start making the switch. The key is to start somewhere…but that’s the key to making any change isn’t it?
About Brannon Poe: Brannon is the founder of Poe Group Advisors and has been facilitating successful accounting practice transitions throughout the US and Canada since 2003. Brannon started his career in public accounting as an auditor with Ernst & Young before working for several years in auditing and tax preparation for the regional firm of Elliott, Davis & Company. He is the author of “Accountant’s Flight Plan: Best Practices for Today’s Firms” (published by the AICPA and CPA Canada), “On Your Own: How to Start Your Own CPA Firm,” as well as multiple blogs and the “Accountant’s Flight Plan” podcast.
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