Case Studies: Online accounting software in 2019

Most often, a firm’s partnership with online accounting software is also a story of a firm’s journey into the cloud. In cloud software they discover faster, more efficient ways of working, and the ability to deliver more value to their clients with all the time they get back. Here are three firms’ experiences with the accounting software that opened up their practices.


KEYS TO THE CLOUD

Firm: Emmerman, Boyle & Associates LLC
Staff: 60
Product: Xero
Commencement date: 2012
On record: Partner David Emmerman

Selection: In 2009, David Emmerman was with a firm partner on a flight home from a conference. They had been struggling with how they were processing payroll, finding that they couldn’t compete with large payroll providers from a service and function perspective. They took out a piece of paper and wrote down all the different ways they were providing the service, and came up with 12. They realized that if they were to add up all the different way they were providing any number of services to their clients, they would come up with hundreds. That’s when Emmerman decided there had to be a better, more efficient way to provide services to clients.

“Fast forward to 2012 — we stumbled across Xero and I had classic SaaS versus desktop rebuttal: Why am I doing this? It’s going be too expensive,” Emmerman recalled. “About six to eight months later we had an epiphany that yes, it’ll cost more money for SaaS, but efficiency would far make up for that.” At Emmerman Boyle, selecting Xero was synonymous and concurrent with embracing the cloud in general as a new way to work.

Implementation: “We didn’t have good processes for testing,” Emmerman said of implementation. “We learned a lot about how not not to bring new apps to our firm. We still follow the processes we learned back then.” As the firm started to scale the new cloud offering, it put a lot of marketing behind the offering and grew its client list. Emmerman asked the core testing team he had put together whether he needed to hire more staff, and they reassured him he didn’t. He was concerned: “When all this stuff hits, who’s going to do all this work?”

But he needn’t have worried. “We were scaling with the same staff. We just had to add a couple pieces of technology. Our average engagement grew up to eight times. There was a crazy shift that occurred.”

Highlights: “The first thing I do every month — and my team is starting to embrace that I do this — is pull the uncoded statement line report,” Emmerman said. “It shows me everything that’s not yet been coded, and unreconciled transactions. I create a PDF, send it out to everyone, and they forward it to clients who can clarify the items, and we can continue our coding journey.”

Emmerman also noted that some of the newer reports available in Xero are very “dynamically customizable.”

“You’ve got the ability to look at data holistically but at its source,” he added. “It makes the value of the conversation with clients that much deeper because I can give them a good map and perspective on their business with real data.”

Finally, Emmerman called out one of his favorite features: “Find and recode has been around for a while, but when you’re doing virtual CFO-type work you need that data appropriately placed within cost centers and in the chart of accounts correctly. We need that data every single month to see how businesses are tracking.”

Find and recode simply allows accountants to recode incorrectly categorized line items in batches instead of one by one, which has proven extremely popular with accountants who use Xero.

Challenges: Because Emmerman’s journey with Xero parallels his journey into cloud adoption, he attributes any learning pangs along the way to a natural learning curve. “It was probably harder to recode things back then, but I kind of blocked out those bad memories,” he joked.

Emmerman would like to see “a tighter use of artificial intelligence and machine learning” to help Xero move toward a world of code-free accounting; some accountants don’t like the idea, but Emmerman sees it as a better environment in which to engage with clients.

Firm growth: “Part of our ‘Aha! moment’ came because we were able to build additional service lines for our clients with Xero,” Emmerman said. “Before Xero, we’d toyed with the idea of doing bill pay for our clients, but we felt it was too risky and we couldn’t develop a core process around it. After seeing how Xero interacted with their apps — the connections work, data flows back and forth — we saw we could create better processes with it.”

Though Emmerman’s firm is cloud-forward, they still maintain a brick-and-mortar office. The next evolution, Emmerman said, is helping staff to work remotely.

A NICHE PARTNER

Firm: Artesani Bookkeeping
Staff: 4
Product: QuickBooks Online
Commencement date: 2014
On record: President Lynda Artesani

Selection: Lynda Artesani runs a virtual bookkeeping practice in Florida, and most of her clients are out of state. She had a lot of problems serving remote clients with desktop software, including having to work at specific times of day to sync up with them.

When she first tried QuickBooks Online, she found she could work “faster and more efficiently.” She found the automation very attractive, and the bank feeds were far better in the online version of QuickBooks. Now, she only takes clients willing to work with QuickBooks Online and refers desktop clients to another firm.

Highlights: Artesani has started to shift her practice to more of a niche area, serving only lawyers and law firms. She has found the features in QuickBooks Online, Advanced Version, to be very helpful in this endeavor. QBO Advanced has a reporting feature powered by Fathom that she really likes. QuickBooks Online also integrates with a whole host of apps that Artesani finds integral in her practice, including LeanLaw, a legal billing workflow app. “I produced an app stack that makes a really efficient workflow,” she explained. “It’s all pushed into QuickBooks with a beautiful two-way sync. I’m able to stay really compliant that way.”

Challenges: “This is not a QBO challenge, but it’s a challenge nonetheless when a bank feed is changed on the bank’s side and the link is broken,” Artesani said. “Every client then has to go in with their username and reconnect the bank feed, which is time-consuming.”

Artesani recalled an issue she had with a client in payroll — there may have been a power outage during upload. But because Artesani, as an Elite-level QuickBooks ProAdvisor, has a direct link to her support team at QuickBooks, such issues get resolved very quickly.

She described the points system that the QuickBooks ProAdvisor program recently launched as a nice benefit, as it allows her, as an Elite member, to enjoy valuable advantages like that direct communication and quick responses to problems.

On the other hand, Artesani mentioned that the merchant services within QBO is a “weak spot.” While it’s supposed to be fully automated, once in a while she has to manually go in and reconcile card transactions with sales receipts because some entries don’t make it in.

Wish list: Because Artesani runs such a niche practice, she has niche needs. For instance, QuickBooks Online caps at 250 charts of accounts, with the next step up being QuickBooks Advanced for larger clients. But the smallest law practice can easily push that 250 cap, Artesani said, by the nature of their business, even though they are by no other measure a mid-market enterprise.

“I don’t think [Intuit] thought of that when they did the capping,” Artesani said. “If you have someone with a lot of assets, they could have a lot of accounts too. It’s a big leap from $60 a month to $150 [the difference in price between QBO Plus and Advanced].”

Practice growth: “My long-term goal is working exclusively with attorneys,” Artesani said. “In the future I would like to really be a manager — I still need to have my hands in the work now — and take on a more advisory role going forward. Switching to niche is half-scary, half-exciting. You’re shutting off a revenue stream and turning clients away. You don’t want to turn work down, but you want the perfect client.”

AT-112918-CAS plans in 2019


LET'S RIP AND ZIP

Firm: American Financial Management
Staff: 12
Product: Sage Business Cloud Accounting
Commencement date: 2016
On record: President Paul Young

Selection: For Paul Young, the No. 1 priority when selecting an online accounting software was security. While his firm, which his father Bo Young started in 1966, has used a range of Sage products for years, it was in 2016 that they converted their whole practice over to Sage Business Cloud Accounting to take advantage of a cloud-based solution that also provided the robust security they required for their clients.

Implementation: Implementation was different than Young had previously been accustomed to, he said. The general ledger had to be squared away, as usual, but the firm was able to build as many custom ledgers as they wanted.

Highlights: “The bank feed is numero uno,” Young said. “We saved thousands of dollars and hundreds of thousands of hours from bank rec-ing.”

“I’m also starting to like the inventory module a lot more,” he added. “It’s nothing fancy, but for small businesses and startups, it’s useful. Most people are just buying products from location A and sending it to location B — it does a great job of that simple inventory piece.”

Young also mentioned that the customer relationship management piece “does a great job,” and he likes how easy the software makes it to get paid. Sage Business Cloud allows for a “pay now” button to be added in communications to clients.

The usability is good for Young’s clients, too, he said, as the software provides simple questions they can answer without accounting knowledge.

Finally, he said, “You can talk back to Sage and they listen. When I make a suggestion, they often will say, ‘How can we customize that for everyone?’”

Challenges: Young mentioned a few customization challenges, such as with ledgers, and certain fields being locked without the ability to modify. But he said that this year he is expecting more releases that will allow him to create more customized ledgers. “I haven’t found anything that’s just a roadblock where you can’t go further,” he said.

Firm growth: Paul’s father, Bo, started the practice in their home 53 years ago. “Time has allowed us to open an entrepreneurial side of our business. We built a training facility, and a virtual storefront for small startup companies.”

Sage Business Cloud has enabled the Youngs to reduce training time for their staff from 18 weeks to five days, which helps the firm move faster and more efficiently toward its goals. “Out of the box it’s ready to rip and zip,” Young said. “It’ll do its thing.”

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