By David Kirby, Executive Vice President, Europe & Americas
There has been much talk in the accounting sector of the shift from compliance task accounting (broadly, completing the year end return) through to added value ‘advisory’ accounting services. This is a story that has been well told by Xero and other cloud apps like ourselves at Figured. We know that technology is driving this through the displacement of repeatable tasks. The efficiencies come from bank feeds, automated budget reconciliation, integrations and report generation.
For the accounting practice, this offers an opportunity to develop the client proposition and to take the business in a new direction. It offers the chance to spend more time talking with clients about the future, where their business is heading, and less time looking at the past historical accounts. This is all well and good in theory, but in practice how do you go about getting the practice organised and how do you go about telling this story to market? The execution is much harder than the theory as ever.
Two years into the UK & Irish markets we are now starting to see accountants becoming clearer and stronger in progressing on this journey. Here we want to highlight a few practices that are making real progress, from the UK and Ireland, and our observations on their approaches.
Scrutton Bland have taken a deliberate strategy of differentiating through technology and taking an advocacy position in the market for farming clients to embrace the journey. This is an approach that has seen them acquire new clients, and make a real name for themselves in innovation. The practice has made an impact in the market through this approach, definitely punching above its weight in size terms.
Our observations on their approach from the Figured perspective include:
- Investment in apps - Scrutton Bland have invested early in developing their experience of apps that may add value to their clients. They have invested to understand use cases, and gaps in app capabilities so that can be presented to clients from a position of authority.
- Present a proactive position to market - Scrutton present a view of the future, and take clients on the journey. Not rushing clients but showing them how they can expect the future to emerge. Having the view of the future agri technology landscape and then helping to support customers as they step into the choices.
- Engage the ecosystem - working with Xero, Figured and others to understand the future, and place the practice as a member of the innovation drive for the sector, rather than a purchaser of technology. This is a different way of thinking and sees them talking about technology as an enabler of business performance, and bring in other supporting stakeholders like Tech East.
For more on the way Scrutton Bland have presented and accessed the benefits of the Xero, Figured and other app ecosystem see: https://www.xero.com/uk/resources/agri-centre/
IFAC is the largest Irish agri accounting practice. With many thousands of farming clients, their scale dwarfs the usual UK practices. Many practices would see this as a constraint to change, given the complexities and need for change management but IFAC have taken the decision to lead the way and to execute at scale.
IFAC recently launched a proposition called FarmPro which is an agri advisory platform, underpinned by Figured and Xero technology. It includes agri specific management accounts, budgeting and advisory services. It is supported by the Bank of Ireland who are taking an active role in the market to support the roll out of the service, and to utilise the efficiencies presented in their own lending processes.
This is, to date, probably the leading execution of this model at scale. Their approach has included:
- In depth investigation of market needs - quantification of the proportion of the base that would value a higher value (budgeting, forecasting, strategy advice) service Vs. the base management accounting reporting level.
- Build support from key backers - working with banks and other stakeholders in the sector to develop a coalition of partners that all are aligned to supporting farmers get better financial management practices in place. This is a joint effort but IFAC are taking the lead.
- Clear go-to-market proposition - clarity around the materials, the positioning and the story behind the proposition. Focused PR and marketing to key industry stakeholders.
- Operating model - a real focus on enabling scale and a quality service, through investing in dedicated people who have a 100% focus on the proposition. Alongside this, focusing on automating as much of the process as possible, with a livestock API into Figured automating valuations and stock tracking for ifac clients.
- Lead from the top - the Exec team is visible, active and consistent in driving for results. This is owned from the CEO downwards. There is clarity in the accountability between the central team and the office teams, and a clear set of targets in place that are managed.
To see the full case study of ifac's journey to FarmPro, see here.
This accounting practice on the west coast of Scotland is taking a proactive and clear approach to their positioning in the market. They have set out that the “modern accountant” should be innovating for their clients, and doing the work of assessing the technology landscape. They have gone so far as to say that without a clear strategy for the practice, it undermines their credibility of advising clients on their strategy. In doing so, ultimately this is about them working with clients who want to progress and develop their businesses and use technology to help them do that. They want to work with clients who are aligned to their own values of sustainable growth of a strong business - this excellent video sets that out clearly
Their approach has included:
- Experimentation - they have taken the time to test and understand how the apps work together, putting a range of clients onto the technology. This enables them to talk with confidence and clarity on applying apps to a range of clients.
- Vision - William Duncan has a vision for a technology enabled accounting practice. They are working towards that with energy and application, which includes specifying team members to lead on the effort and ensuring they have the support of the leading partner to invest the time and energy to get things moving.
- Clarity & confidence - they have reviewed the market place and are taking a stance on the app stack they believe works for their farming clients. They are not suggesting that all clients needs to come on immediately, but setting out a view of the future of where they are heading. This perspective then supports their advisory position in the market “equipping you with the right tools in combination with our experienced and qualified team, you will have the best information possible...to make decisions” Robert Fergusson, William Duncan.
What does this mean for you?
Practices that are thinking carefully about their digital strategy, and how this can support their clients are working closely with app partners, investing time to understand properly the opportunities and challenges, and putting the right team in place. They are aware that technology is just one part of the proposition and investing time and energy into developing their thinking, in a way that works for them.
We are here to support those accountants and advisers who are considering how to make this change, we have a good collection of material and experience to support you engaging your colleagues and partners. We’d be delighted to discuss with you how you are thinking about your challenge, and how we could help.
Contact us to discuss more on what we have learned, and how you could step forwards in your own journey to add more value for agri clients.