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James Solomons

Accounting, Business & Technology; Advocate, Entrepreneur & Educator

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Growth

6 practical steps to introduce advisory services in your firm

The next phase of the accounting industry — where accountants become true advisers to their clients and not just data hoarders — is very much underway.

But it’s often difficult to know exactly where to start, and what changes to make to help that transition. Having made that change myself in recent years, with a practice of 150+ business clients and growing, here are some practical tips for any firms looking to fundamentally change the way they approach advice.

Let the technology do the heavy lifting
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Get Connected Edition #6 is out !

Thanks for tuning into Get Connected Edition Six !

 

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Ten big challenges facing small businesses in 2016

10 challenges and tips to help overcome them for SMEs and their advisers

 

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Get Connected Edition #5 – v2.0!

Welcome to Get Connected 2.0 ! Edition Five

 

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This weeks edition of Get Connected – #4

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Edition #3 of Get Connected

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Get Connected – Edition Two

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The importance of your Accountant in an ‘Automated World’

Should I Sack My Accountant?

As featured on LifeHackerAU..http://www.lifehacker.com.au/2014/12/should-i-sack-my-accountant/

A lot of people ask me if accountants are going out of business.

As the head of accounting of a company that allows small business owners to easily do many of the things their accountant used to do, as well as being an accountant in public practice, it is a question I get asked frequently. A more pointed question however is “Do I see much of a future for accounting professionals in this automated world?”

Some people even ask me if they should sack their accountant once they’ve got Xero up and running in their business.

My answer is always the same – absolutely not! Thanks to the efficiencies created by cloud accounting the opportunity for accountants and their clients to work closer together has never been greater.

The role of the accountant is changing. Instead of just focusing on historical financial numbers (although these remain important for things like tax and keeping track of how a business is performing) many accountants also provide valuable advice about how to run and grow your business.

There are several milestones in the lifecycle of your business when you should get the input and advice of an accountant.

The first is when you start out. You should consult your accountant on the best business structure for you. The reasons for this are many. The right structure can save you tax each year as well as when you sell your business. It can also ensure that your business and personal assets are appropriately protected from creditors or if legal proceedings are brought against you. And it is important when taking into account what you might want to do with the business in the future whether that be selling it or passing it onto your children.

Your accountant should also review your business plan. We’re all a bit starry-eyed when we start a new enterprise, so having an impartial business advisory specialist cast their eye over your plan and the assumptions you make can save you a lot of time and money later on. They can draw on their experience to spot pitfalls you might have overlooked. For instance, they might think you’ve underestimated your costs or question how you’re going to meet your sales projections.

You should also ask your accountant for help before you apply for finance, make a major investment or put your business on the market.

But it’s not just milestones you need your accountant for. You should also ask them for advice on the day-to-day running and growing of your business.

Some accountants have set themselves up as ‘virtual CFOs’. They do the same sort of strategic and advisory work a chief financial officer would do in a larger company, but because it’s for only a few hours a week or a month it’s affordable for a small business.

The rise of cloud-based accounting software means your accountant can easily examine your business’ real time financial data from anywhere and at any time, not just at the end of the month or the quarter.

They use this information to advise you on how to improve your business.

Broadly, they can act as an advisor and sounding board for any financial and administrative issues.

More specifically, they can help you analyse your financial data and performance, and identify growth opportunities by providing insights on cash flow, pricing, inventory and other financial measures. Your accountant might, for example, notice that you have a lot of stock that’s selling too slowly and advise you on how you can better manage your inventory to free up the cash that’s tied up in stock.

You should also work with your accountant to set targets for your business. They can advise you on which KPIs you need to grow your business, and help you formulate a plan to hit them. And they can set up real-time cloud based reporting systems to track your performance against these KPIs and targets. This is invaluable to not only measure your success but also to highlight any areas of concern.

They can also look at your business processes to ensure you’re doing things as efficiently as possible. A lot of accountants have access to benchmarking data, which will help you compare your own profitability and efficiency with other businesses in your sector.

Finally, even if your tax affairs are very simple, it’s still a good idea to get your accountant’s advice. They’ll be up to date with the latest changes in the tax law and know about all the deductions available to you to help minimise your tax bill.

While your accountant can look over your finances remotely using your cloud software, it’s a good idea to have regular face-to-face meetings with them as well so you can go over any issues and problems in detail as well as brainstorm and explore new ideas to help your business grow.

You should think of your accountant as an important partner in your business. The more time you invest in the relationship, the more your accountant will learn about your business and the more valuable their advice.

Darwinism & Digital Disruption

As featured in the Dec 2014 edition of Acuity Magazine, the monthly publication of CAANZ. http://www.charteredaccountantsanz.com/en/Site-Content/Innovative-Thinking/Acuity/December-2014/Darwinism-and-digital-disruption.aspx#.VH6MPDGUeqI

How to leverage opportunities in the new age.

Digital disruption = big opportunities.

Any business owner who denies, debates or argues with this statement is, I surmise, probably the kind of person who thought digital cameras would be a passing fad.

No longer just a theory or the subject matter of white papers, digital disruption is now the norm and, in reality, is an everyday – if not essential – part of running a business.

Why so? Well, my belief is that it’s because technology brings about change and this influences consumer behaviour so rapidly that businesses need to constantly disrupt the way they do what they do to stay ahead of the game.

The rapid rise and uptake of technology sees most people comfortable with it now, meaning that the way people transact has changed forever; this not only changes the way businesses operate but also changes what new technology is developed.

And herein lies the opportunity. Businesses that are able to respond to the changes in consumer behaviour will gain a competitive advantage as they deliver what consumers want faster than their competitors.

As Darwinian theory suggests, it is not the strongest who survives, not the most intelligent, but the one most responsive to change.

The key trends emerging that businesses can leverage
are that:

  • consumers want to do business with you anywhere, anytime and on any device
  • barriers to moving into new and/or overseas markets to sell products and/or services are reducing
  • significant reductions in the cost of enterprise-grade software applications are occurring
  • big data for all sizes of business is now accessible.

Generally speaking, the opportunities arising from these trends are internal and external. Internal opportunities are the ability to drive efficiency into your operations, to be able to scale with little capital expenditure and the ability to have real time data with which to make immediate operating decisions.

Externally, it is the ability move into new markets, reduce your marketing spend, capture new customers and to be able to transact 24/7. You can begin to connect with customers via a digital relationship.

Overall, to capitalise on digital disruption, a business must change the way it operates in order to be successful. To achieve both immediate and long-term results, the digital focus needs to be embedded into the culture of the business. While there may be key positions in the organisation that focus on this area, everyone needs to be engaged with operating in a digital environment.

So, what are some of the ways a business can leverage the trends and opportunities?

Ensure that your website is designed properly. It needs to be responsive so that it can be viewed on any device. Ease of use and easy navigation are paramount. Think about the new iPhone 6. For many people this may become their single way of accessing the internet. Your website needs to work on these devices.

The content, layout and information on your website must engage consumers to transact with you without the need for help. It must be a smooth user experience. How often have you moved to the next website in your search results when the first one hasn’t given you the experience you want? If you wouldn’t or can’t do business with your own website, why would anyone else?

Market your business in a cost efficient and effective way through the use of social media, search engine optimisation and smart tools like online newsletters. You do not need to spend excessive amounts on marketing to achieve a desired result and with many applications now also measuring the direct success of a campaign (ie tracking internet clicks) you can switch between methods easily depending on their effectiveness.

Look for new markets either in a new geographical location or possibly in a vertical market. For many service providers, a combination of high definition video conferencing tools and online real-time applications means they can deliver their consulting services to clients around the world “face to face”. Doing business is now a global opportunity and businesses will seek out the best providers regardless of their physical location.

When looking at vertical markets, think about products and/or services which possibly complement your current offerings. As an example many accountants and bookkeepers are now moving into cloud technology applications consulting, implementation and training.

Use online applications to run the back end of your business. Accounting, CRM, payroll, reporting and industry specific programs are available that when connected via the internet provide an enterprise-grade solution at a fraction of the cost, both initially and ongoing.

Embrace automation in your business. Look for any process that can be automated to drive efficiency. Then redeploy resources previously allocated to manual tasks into other areas such as sales or business development.

Constantly review the real-time data being captured by your online applications.

Use this big data for your business to make swift decisions to capitalise on any opportunities. Use experts (cloud integrators) to assist with setting up your big data systems to ensure that the information captured is correct.

Entrepreneur Ruslan Kogan stated in a recent article: “We interrogate our business model daily, which is why it’s completely different from a year ago. We view retail evolution as similar to Charles Darwin’s description of evolution.”

This use of big data is a key reason why Kogan has been so successful. In fact, he has embraced the true ethos of digital innovation – the process whereby applying a different set of values, modes and technologies that ultimately (and often unexpectedly) substantially impacts or overtakes an existing market.

As digital strategies and the customer experience are so critical to business success you should consider hiring a chief digital officer (CDO) or customer experience officer (CXO) to make sure that your digital and customer strategies are well thought out, properly implemented and regularly fine tuned. Or if your business isn’t large enough to accommodate a full-time role, either assign an existing employee to the role or outsource the role to experts (an external agency).

Foxtel is a prime example of a large business responding to digital disruption and seeing an opportunity to capture a new market. Traditionally only delivered to your TV via the Foxtel Box and with a lock-in contract (typically 12-24 months) at a premium price, it now offers Foxtel Play, a month-by-month internet-based streaming version of Foxtel, which you can view on multiple devices anywhere, anytime.

It has also reduced prices significantly in order to continue to remain competitive with traditional service delivery to TVs.

The Jack Welsh quote “if the rate of change inside an institution is less than the rate of change outside, the end is in sight” is an appropriate point to finish on. The greatest risk of digital disruption is the risk of doing nothing at all. Don’t make that mistake.

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