Namit Trivedi, Backoffis
Every few years, a new trend enters the marketplace and depending on your mindset, is a potential opportunity or a threat. Ten years ago it was ‘going electronic’, five years ago it was ‘working electronic’ and now it’s ‘living electronic’.
With the explosion of cloud services and availability of excellent outsourcing providers, the cost of delivering the compliance component of service offerings has dramatically reduced. For the first time in our industry, the nexus between fee growth vs capital and operational expenditure has been weakened. I have seen firms in regional Victoria servicing Perth-based mining companies and I have seen small firms in Sydney CBD servicing large Queensland-based agricultural businesses. The only two variables left on the table that completely co-relate with your ability to grow and be profitable are a) the quality of your team and b) the composition of your team.
The term modern workforce is thrown around so frequently that we may have lost sight of its true meaning. What does it mean from our industry’s perspective? A modern workforce is simply a firm comprised of highly motivated individuals at all levels who are empowered and equipped to drive the firm forward.
To have staff not only meeting their budgets but driving new revenue streams and assisting you in delivering quality services may seem like wishful thinking but it’s happening all around the country. Changing the composition of your workforce or your workflow is not easy and is definitely not an overnight change. Firms that embraced change three to five years ago have finally found themselves in the execution mode of their plan. They have a modern workforce that is embedded in their business plan and is delivering on the milestones this very minute. There are four overall steps that these firms have done to achieve a modern workforce.
The prominence of technology in the accounting world means that many of the compliance-oriented tasks can be done quicker with document management systems like HowNow and accounting software like Xero and MYOB Live Accounts. If your client is in the cloud, then your accountants are not chasing USB sticks or CDs ‘hopefully’ containing the right year end file. You are not chasing tails before you have begun a job by wondering why the opening balances are wrong, and so on. In a nutshell, a firm needs to embrace technology that assists in cutting down work steps.
However, having the right technology is not the same as using it in a way that specifically addresses the issues in your firm. This is a key point because every coach and every conference basically tells you how to run your firm in a sand-boxed way without fully understanding your own particular circumstances. In my experience, every firm is unique and if something works for firm A, this doesn’t mean it will work for firm B.
The first step in setting up the right conditions for a modern workforce is to ask the question “What are the right tools that I can equip my firm and its employees with?” For example, a tax software provider may not have the best workpapers, workflow or a document management system to support your firm. If there are companies that only specialise in one or two products, approach them and see if they can help your firm do things better or quicker.
If you use the right tools at your disposal correctly, they will free up time for knowledgeable professionals in your firm to do the work they were initially trained and employed to do: helping others through advisory and consulting services.
One critical aspect of a having a modern workforce is the ability for your workforce to work from anywhere. A cloud-based document management system is the most obvious factor in work-life portability, though not crucial. We know of many firms with a server-based document management system (generally a hosted server is a practical solution) who use this to work as a distributed team, whether in or out of an office, on a daily basis. However, cloud-based systems can pose problems for firms in regions without high quality Internet or where your travelling lifestyle limits your Internet access. Cloud-based systems may also raise privacy related issues if you are unsure of where the data is hosted and who else has access to it.
However, if you’re a firm with constant access to a reliable and speedy Internet connection and have employees working from home or an outsourcing partner in a different country, ‘the cloud’ is undoubtedly a simpler (and usually more cost-effective) solution – plus most service providers offer you the freedom to work from a range of electronic devices. However, as is always the case with IT, it’s always advisable to be prudent. If you just installed a new server, don’t let anyone talk you into replacing it with something else unless the benefits justifiably outweigh the costs. We all know how easy it is to overcapitalise on IT-related expenditure.
All the software, apps and templates in the world won’t work of their own accord – you need ‘drivers’ and that is the second step. You need to identify champions who will assist you in executing your plans. For example, if the firm has made a decision on software or a piece of technology to drive the firm forward, assign one or more employees the responsibility of implementing and overseeing it. In addition to this, give everyone ancillary tasks – for example, have a rotating roster to keep the website or the blog current. Research has proven that if human beings break the monotony of a routine with other tasks, it not only keeps them engaged but increases their productivity while they are conducting their core tasks. A modern workforce is an engaged workforce.
Since every firm is unique, it is important that you foster an environment that is receptive to ideas all the way from managers, accountants and even admin staff – this is the third step. If human beings work in a positive environment, you will elicit their best performance. If you encourage your staff to discuss issues such as “how can our clients perform better next year?” you will be surprised with what your staff may come up with. Empower your employees and have faith in them.
As a graduate years ago, I remember a partner of the firm asking me if I could find a way to save money for a client. I obviously didn’t know anything about tax structures and the like, but I knew something about mobiles (as young people do). I dug through the P&L and noticed that all the sales employees had individual accounts. I knew Telstra had plans that allowed sharing of caps. In a nutshell, the client ended up saving more than the annual compliance fee we used to charge them. An open, collaborative and irreproachable environment is the bedrock of a modern workforce.
Getting the structure of your firm right is the fourth and the most important step. Assuming that your firm has electronic workpapers, a workflow system, an efficient document and email management system and if your accountants are still busy churning out routine compliance work, it would be very hard for the firm to move the average recoverable rate up without significant fee revisions. In addition to this, if the layer underneath you is constantly busy, how can they help you move into other areas that you have identified for the firm? How can they grow professionally if they are doing the same things again and again? A modern workforce is a multi-disciplinary workforce.
The good news is that the same advances in technologies that assist your staff in working remotely facilitate the firm in engaging a competent outsourcing provider to assist in reorienting its staff structure towards a service-oriented firm. Apple’s unparalleled success in recent years is due to its sole focus on its customers and this is the reason why Apple (with USD $150b) in cash on its balance sheet outsources instead of getting distracted in running its own assembly lines in other countries. For the same reasons, it is prudent to consider an existing outsourcing provider prior to venturing out on your own so as to ensure that your focus remains on your clients. With 30.2% of Australian accounting firms now outsourcing in some way, you are not alone. However, it’s very important that you and your outsourcing partner comply with recent privacy principles, design a robust engagement letter and build an open relationship across all levels.
Outsourcing should also be a firm-wide decision. Managers and accountants should be involved in the process of selecting a reputable provider and it should be seen as a long-term project. However, before a firm considers outsourcing, it needs to ensure that it as efficient as it can be, otherwise existing issues will just carry forward to a third party.
Tools, drivers, environment and structure are the four steps or pillars upon which you can build your modern workforce. You can’t have the best tools but not the environment or the structure to facilitate their use. There has to be balance.
In the next ten years, our profession will see more change than it has in the last fifty years. We live in a world where clients are less interested in ‘who are you?’, ‘how big are you?’ and ‘where are you?’ and more interested in ‘what can you do for me?’ A firm of motivated and empowered individuals can articulate an answer to that question any day.
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