The firm of the future? The answer is in the cloud

Charles Chen started Charles & Partners six years ago out of university where he was an undergraduate in Singapore Management University’s Bachelor of Accountancy. While most accountancy students buried their heads in books, Charles built his very first accounting team with his course-mates as his associates, servicing as many as 30 clients while juggling full-time studies. 

Despite all that was taught to him in school – the ‘archaic methods’, as he called them, of double-entry, journaling and copying and pasting data, Charles learnt the value of automating manual and repetitive tasks from the outset. Together with his team, he developed complex spreadsheet macros to reduce manual work to help them service their small portfolio of clients efficiently.

Fast forward a few years, Charles & Partners now services close to 300 clients still with an accounting team of 10. Needless to say, as the business grew, spreadsheet macros just weren’t cutting it.

The desktop problem: It’s at the desk!

Once Charles & Partners grew into a full-fledged business, Charles adopted various desktop accounting software to continue servicing his growing portfolio of clients. The problem with desktop accounting software, he said, was in the name – you were literally ‘bound to a desk’. He was spending more time in the office, at his desk, than he was meeting clients.

“Previously, when data was saved on a singular desktop, it would take days or multiple steps, not to mention unsecure password sharing practices, to get my hands on client files. This desktop operating environment made it difficult to collaborate with my staff and clients. Because so much data had to be manually entered, we had to put in place checking processes to ensure data accuracy, which put a strain on resources and slowed us down,” recalls Charles.

Charles deeply believes it is an accountant’s duty to help clients gain insights and perspectives into their business.However, when accounting data was two years too late – a ‘retrospective exercise’ there really wasn’t room for accountants to add value-. “It was a no-brainer that we had to move away from the desktop!” explains Charles.  

A new way

Charles discovered Xero’s beautiful accounting software in 2018, joined the partner programme, and immediately moved over 100 clients to Xero. 

“Xero is so easy to use – if you know how to use Facebook… you’ll know how to use Xero!” laughs Charles.

Certainly, some clients took more convincing than others, but most were won over by the efficiencies brought about by the cloud. In one such example, one of Charles & Partners’ clients was able to double their finance department’s productivity following the migration to Xero. “Our clients love it because they get time back to focus on higher value work and advise their business in the areas of financial management and strategy,” says Charles. 

Since moving to the cloud, Charles & Partners’ productivity has increased by 60%. Charles calculates this by measuring the time it takes for his associates to ‘finish a case’. 

The ‘one-stop service centre’

Earlier this year, Charles & Partners acquired a corporate services firm, adding 120 compliance clients to their portfolio.

Inheriting a larger portfolio of clients and transitioning them to a cloud accounting platform reduced Charles & Partners’ compliance workload by as much as 40%. In addition to this, they were able to upsell their accounting services to the new client base, increasing revenue per client and their overall firm revenue.

In findings from Xero’s 2020 Singapore Accounting Industry Report, firms who adopt a ‘one-stop service centre’ service proposition captured 40% of all new clients in the market for that year. This shows clients are attracted to professional service firms who are set up to provide a full suite of services for a variety of business needs. Once clients are in the door, the opportunity remains for firms to upsell and cross-sell additional services to increase touchpoints, revenue and retention. 

Beyond cross-selling accounting services, the adoption of Xero has allowed Charles & Partners to expand its service lines to include business process consulting, optimisation and app advisory. Charles has developed specialist expertise in the following apps, adding app advisory and implementation to his potential revenue streams:

• Payroll: Payboy
• Project management: ActionStep, WorkflowMax, Xero Projects
• Data automation: AutoEntry, Hubdoc, Receipt Bank

A mindset change

According to Charles, the hardest part of change is not in learning the technology, but rather unlearning the old ways of doing things. For example, in the traditional accounting process, payment vouchers were used as a control mechanism to ensure every payment was approved by the relevant stakeholder. In Xero, you can set user permissions for bill payment and approval, rendering payment vouchers obsolete. While approving payments in Xero is as easy as a few clicks, accountants struggle more with the process and mindset change.

At Charles & Partners, staff are encouraged to dedicate as much time learning as they do working. While the accounting industry is known for its demanding hours, Charles & Partners’ associates work a standard 40-hour week and within this, Charles advocates for as much as 30% of his associates’ time to be spent on learning about new business trends, their clients’ businesses, and how they can continue to move up the value chain.

“Times have changed. In the past, all clients wanted from their accountant was compliance. Now, clients expect advice in the areas of tax, financial management and overall business improvement. The only way to upskill yourself to meet these demands is to actively step out of the day-to-day and invest time in learning about what our clients really care about,” says Charles.

The firm of the future

With Xero, Charles has realised his vision of running an accounting practice with ‘zero data entry’. He doesn’t yet know what the future holds, but plans to keep his operations small and stay close to his clients. He believes in ‘teaching the machines’ to do the work, and running a futuristic firm where everything that can be automated, will be.

“Xero is a great platform, but that’s not why my clients love it. The value I offer is the time and transparency I give back to my clients – they get to spend more time with their family, increase trust between business partners and improve their wellbeing overall. For these clients, Xero has really been a life changer!” Charles says, grinning.

A Xero Silver Partner in Singapore, Charles & Partners is Xero Certified and listed on the Xero Advisor Directory. Click here to learn more.

Start your practice on the digital journey by partnering with Xero. Learn more about Xero’s partner programme and sign up here.

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Source: Xero Blog