Last week I attended the Roadshows for both Xero and MYOB (they were on consecutive days at the same venue – coincidence?). This is when the software providers spruik their current product and showcase the shiny new developments that you can expect for the coming year. Think Steve Jobs launching a new iPhone but a whole more accounting-ish!
So firstly a couple of confessions. I’ve been in the small business accounting world for almost 20 years. Over this time, I have almost exclusively used MYOB. When I started, they were the market leader and a local product. There were few options suitable at the time when many small businesses were using a computerised accounting package for the first time to account for GST. Fast forward a few years and Xero was the new kid on the block providing an alternative and completely disrupting the market by only providing a cloud-based subscription solution. Because of my background and concerns around security, I came quite late to the Xero party.
Xero has completely changed the environment in which bookkeepers and accountants operate. It has become the market leader in terms of subscriber numbers. MYOB is now in catch up and is also moving exclusively to an online subscription based model.
In starting my own accounting practice, my attitude to computer software has always been client-centric. Generally speaking, all small business accounting software does essentially the same thing (record money in and out) but in a different way. All small businesses are different. They have different needs in their accounting software as well as different backgrounds and experiences. I see my job as the Accountant, to work with clients to ensure that they have the financial information they need to make decisions quickly and easily, regardless of the software they are using. It’s a bit like the Apple versus Samsung debate. They both make phone calls and connect to the internet, but they do the job in a different way. And much like trying to convince a dyed in the wool Apple user that they should convert to the latest Galaxy, I’ve never thought there was much point in trying to convert someone who has used Xero for years that MYOB was a better option (and vice versa).
As a result, I’ve never ‘dictated’ what software a client should choose. Instead, I’ve discussed the various options with my clients, looked at their requirements, budget, technical expertise etc and guided them towards a solution that works for them – both now and into the future.
What the Roadshows highlighted to me is that as an Accountant, this philosophy is going to become harder to sustain. I see a future where I’m going to have to choose. Let me explain why.
We’ve all heard that bookkeepers and accountants are one of the professions with the potential to be hit by automation and artificial intelligence. All software providers (and not just MYOB and Xero) are moving very quickly towards a world where there will be no data entry. Your financial information will be fed directly from your bank. Expenses will be automatically coded from either invoices downloaded directly from your supplier or from a photo taken on your phone. This is happening now. So clients are now going to expect their accountant to be providing them with higher level advice and that advice to be regular and up to date. No more waiting for the annual financial statements and tax return to be prepared six months after year end. Your accountant is now a virtual financial controller operating with real time financial data. It’s an exciting time to be an accountant! (and yes, I really did say that and I mean it!)
For accountants to be able to meet these expectations of clients, we are going to have to undergo our own transformation. We need to assess the software we use to manage our practice (to manage client relations, lodge tax returns, prepare financial statements, etc) to make sure it keeps up with our changing industry. This inevitably means that our practice software must seamlessly integrate with our clients’ software. It will come as no surprise, that the two leading providers of Accountant practice software are Xero and MYOB! If you’re a practice using MYOB (as I currently do), there are significant advantages in most of your clients using MYOB software. These advantages are becoming greater and greater. The integration between client and practice software results in significant time savings. This frees us up to help our clients grow and build their businesses.
So what does all that mean for you as a small business owner and how you interact with your accountant. Some questions to ask your accountant:
- What software is your accountant using for their practice and what do they use to manage their own business?
- What benefits does your accountant receive for recommending one software provider over another. This might be commissions, it might be exclusive events or even providing their practice software at no cost.
- How does this benefit me as your client?
- If I don’t use your recommended software, will there be additional costs?
- Are you able to make sure my accounting data always matches what has been reported to the Tax Office?
Please, make sure that you understand the advantages and disadvantages of your current approach. Don’t be afraid to ask your Accountant to pass on the benefits they receive for recommending one software provider over another. And always, always make sure you feel comfortable that they are acting in your best interests.
If you would like to discuss your business accounting needs, then I offer a FREE 30 minute initial consultation. You can easily book online here and I look forward to helping work through your accounting needs!