Adriaan Basson was an articled CA before leaving the comfort of a Big Four accounting firm to start his own practice, Wingman Accounting. That was four years ago. Today he has nearly 100 clients and employs seven staff. And that’s after firing 20 clients who didn’t fit his business model.
Speaking at Future Practice seminar this week at The Venue in Pretoria (sponsored by SA Institute of Business Accountants and Receipt Bank), Basson outlined what the future accounting practice looks like.
He should know because he built one from scratch.
First of all, virtually everything is automated and resides in the cloud. “We see ourselves as a tech business that provides accounting services,” said Basson. “Most accountants struggle to increase revenue because they sell time. Tech firms, such as ours, sell subscriptions.”
Basson believes the future accounting firm is fast becoming a reality, and expects more practices will embrace the cloud within the next two years. Tania Lee of the SA Institute of Business Accountants (Saiba) believes this future vision of the accounting firm is still several years away. but accountants are going to have to embrace this inevitable change or risk extinction. Saiba CEO Nicolaas van Wyk says many of the functions currently being performed by accountants will become automated, in which case accountants will have to become trusted advisors to clients. “This will need a mind shift from accountants. They will have to reinvent themselves as specialist advisors, which is why we now offer licences for accountants to become immigration specialists, independent reviewers, and accounting officers for schools, non-profit organisations and farms, to name a few. This is the future of accounting.”
Basson explained how he came up with a monthly subscription model which creates a predictable revenue stream and establishes clear expectations from clients.
Wingman’s entry level Small Business Package costs R3,500 a month, rising to R5,000 a month for the “Jetfighter” package and R12,000 a month for the “Starfighter”. Cash flow problems are averted by invoicing clients at the start of the month.
The entry level package includes all submissions to SA Revenue Services and the Companies and Intellectual Property Commission (CIPC). Software fees for Zero, Receipt Bank and SimplePay are included. There’s free support for tax and accounting questions, reminders and tax alerts, annual financial statements, online payroll and weekly bookkeeping.
The higher level packages includes monthly management reports, and other bells and whistles such as performance dashboards, and planning and strategy sessions.
Wingman only works with clients that are willing to embrace the “cloud”. Those that aren’t willing to go the cloud route are fired.
Receipt Bank automates the expenses and posts entries to the appropriate journals.
The Wingman team is young, and many don’t come with a traditional accounting background. This is an advantage, says Basson, since it allows him to train the team without hitting up against old school accounting training and indoctrination.
Staff come to the office just twice a week and work the rest of the time at home. Remuneration is output driven: staff earning say R20,000 a month are expected to service clients paying three times this amount in monthly fees.
The company’s mantra: automation and integration. In other words, identify services that can be automated and focus on system integration.
Choose your Apps wisely
Basson listed out the Apps being used as part of the automation engine:
- Google adwords for marketing (though most new clients come in through word-of-mouth referrals)
- MyCRM for contact capture
- SagePay for debit orders
- For recurring task management, Asana and Karbon
- For client calls: Skype and Zoom
- Cloud accounting: Xero/QuickBooks/Receipt Bank (clients are required to use same system for invoicing)
- For payroll: SimplePay
- For office admin: Office365/OneDrive (with remote backups to subvert hacking and ransom attempts)
- For electronic signatures: AdobeSigns
- For cash flow insights and forecasts: Futrli
Technology is an enabler not a disruptor, so choose Apps that fit your business model.
Once the client accepts the terms of the engagement and monthly quote, an engagement letter is accepted and the client is allocated a practice technician.
Running and old school practice alongside the cloud practice
Many existing clients are reluctant to convert to the cloud and may need gentle goading in that direction. Basson recommended continuing to service your existing clients while starting up a parallel cloud firm and gradually migrate clients to the new firm while taking on all new clients under the cloud business.
Finding your clients’ “pain points”
Different clients will have different pain points, but for most small businesses this would include VAT and SARS audits.
“My suggestion is to keep the menu of services very simple. Build the services you offer like train tracks that the client cannot change. The client has to fit your system,” said Basson.
Adopting the monthly subscription model provides cash flow certainty, though there is opportunity to make additional income from project work, such as automating and updating the debtors’ book.
New ways of looking at the future accounting practice
It sounds cliched but develop a culture and a value system within the practice: it makes all decisions easier as values inform any decisions made thereafter, even when the boss is not around.
Focus on staff outputs rather than inputs; in other words, don’t bother with timesheets, rather monitor how staff are servicing the client.
One staff member takes care of end-to-end client engagements. Use Karbon to keep track of client engagements, even when staff are not around.