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Understanding accountants


Accountant webinar series

⁠
Video 1
⁠
- what accountants love and hate about vendors

Unforgiveable failings from software providers in accounting: ​Not giving access to underlying data Poor user experience (expectations have increased)
Want sales people to take the time to understand actual pain points, and they think that compliance isn't dead yet and that the relationships with clients are underpinned by the regulatory work that they do
Division of accountants - those that are adopting tech stacks and streamlining their processes, and those that are just carrying on in the traditional way. Because of this, we get a divide and it must be hard for vendors to decide which to target - do they go after the upcoming minority and build for them, or do they build for an antiquated majority. Avg accountant age in aus is 60!
Accountants love helping other accounts - but not clear why?


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Video 2
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- benefits and challenges of building for medium and large firms

Untidied notes

Client facing apps and internal apps - with the client facing ones you have to be very agnostic as to which ones you're using because you're a different clients will have very different needs and therefore it can't work across all of them
Apparently the vendors are very consultative with their approach and they really work and listen to the clients and take feedback from them. In terms of what to implement and work together with the clients quite strongly it seems. This is usual or if this is specific to the accounting industry? In Australia there's an requirement to disclose any incentivization that you get. So if you work with the vendor and they want to try and give you money for using their product where the your clients you have to disclose that. Don't know whether it's the same in the UK or not. In addition, they also pass those discounts on to their client. So in short, it's not a good sales technique to do it that way It also comes up again that if you do a good job they will recommend the product. Anyway. You don't have to incentivise them Large scale firms are aware that they are very slow implement things. Med scale firms don't have good internal communications so one department might be looking at a vendor and you wouldn't even know about it in another department
Ben Swanson 12:22 PM Seeing the additional value a bit more here as well because when I related to my own thoughts about trying to find software for prototyping being in a network like early doctors hub would give me access to that early on and therefore could be a competitive advantage. So there is something there that makes sense 12:24 The sales process They hate being sold to vehemently that comes up all the time. They want to have people truly understand their pain points and that for present valuable products to them based on those pain points. Demo sessions are useful to peak interest, but really that needs to be a long-term trial. For free which allows them to really test it out over a longer period, especially for the larger firms because of how long it takes them to tester 12:25 And they want to be speaking with the product people rather than salespeople so they can ask a really specific product questions and understand where things are truly on the road map 12:27 There also really big on building relationships and making friends with the people in buying from the people that they like. Basically they want people that put the effort into a friend of them basically rather than just trying to sell to them

Tidied notes

Client-facing and Internal Apps:
Client-facing apps - diverse range of client needs, so accountants have to have a wide understanding of the products available, so that they can know which is best to recommend to which accountant, and in which circumstance.
Internal apps can be more tailored as they are not directly exposed to varied client requirements.
Vendor Interaction:
Vendors in the accounting industry adopt a consultative approach, working closely with clients, listening, and incorporating feedback.
This consultative collaboration is aimed at implementing solutions that genuinely meet client needs.
Incentivization and Disclosure:
In Australia, there's a requirement to disclose any incentivization received from vendors.
Discounts from vendors must also be passed on to the clients.
It's not considered an effective sales technique to incentivize merely for product use.
Good service and product efficiency lead to organic client recommendations without the need for direct incentivization.
Firm Size and Operational Dynamics:
Large-scale firms are recognized for their slow implementation processes.
Medium-scale firms often face internal communication challenges, causing unawareness of departmental actions.
Benefits of Networks like Early Adopters Hub:
Early access to software for prototyping can offer a competitive advantage.
Being part of a network like Early Adopters Hub can facilitate this early access.
Sales Process Preferences:
Firms dislike aggressive sales tactics and prefer genuine understanding of their pain points.
Demonstrations should ignite interest, followed by long-term trials, especially important for larger firms due to their slower adoption rates.
Firms prefer interacting with product teams over salespeople to get detailed product insights and understand development roadmaps.
Building genuine relationships is crucial; firms prefer to buy from people they like and who make an effort to understand their needs.

⁠
Video 3
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- importance of the right integrations

Untidied notes

So, summary from the webinar. Main takeaway is that one of the biggest challenges that companies face when talking about integrations is the fragmentation of the users that they work with. Every different firm wants to do things a different way, and every different firm has downstream applications and integrations that they want to integrate with. So, if you're an accounting firm, you have to make decisions about which technology you work with, and that has a big impact on the implications for the companies you then work with directly, because you have to figure out a way of integrating whatever tools you're working with with their tools, and that becomes really complicated really quickly trying to satisfy everyone's requirements, and you have to make decisions whether you want to do direct integrations or whether you want to use something like Zapier, which they seem to be quite negative on. I'm not really sure why. I think it was because of limitations and not having exposures to the actual data you get. That's one part, and then Xero has a practice manager, which I presume is some way of managing different accounts, and the Xero practice manager has a read-only API, which allows you to use the practice manager as a data source for all the data, and it's read-only, so you can't edit anything. So, Xero allows you to integrate external apps and build your own trust with the Xero Practice Manager API, which is unique. None of the other providers offer that. They also have their app store, which is where everyone's built. A lot of people have built lots of tools on there, which seems to be a cool addition. I'm going to stop there.
I guess I'm starting to get a better understanding of what it takes to be an accountant in terms of a lot of it is a really difficult spot to be in because the compliance stuff is getting easier and easier to do there's more and more tools to do it and so you're trying to make your business seem relevant so how do you do that try and become more competitive try and add more value and as it becomes easier and easier to do the compliance more and more competitors are coming into the space making services cheaper and cheaper and those competitors are using newer and newer products so it's even more of a squeeze to stay relevant and especially how do you improve yourself prove yourself to others that you are indeed the best way of doing something when there's so many alternative ways of doing it

Tidied notes

The main challenge in integrations for companies is dealing with user fragmentation, as each firm has unique requirements and downstream applications.
Accounting firms face decisions on which technologies to integrate, significantly impacting their client relationships and workflow efficiency.
There is a need to choose between direct integrations or intermediary tools like Zapier, which has received some criticism possibly due to limitations in data access.
Xero offers a solution with its Practice Manager featuring a read-only API, allowing integration without data manipulation, setting it apart from competitors.
Xero's unique position is further supported by its app store, which has a variety of tools built by different developers.
Consider the integration challenges and user fragmentation in future company strategies.
Evaluate the technological partnerships and integrations that best align with company and client needs.
Assess the benefits and limitations of using intermediary integration tools like Zapier.
Explore Xero’s Practice Manager and its API for potential adoption or inspiration.
Investigate the offerings in Xero’s app store to understand the ecosystem and potential integrations.

AccounTech Product market fit series

⁠
Video 1
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- Will Farnell

Ben Swanson shared insights from listening to Will Farnell, noting significant takeaways and reflecting on the challenging position of accountants.
He observed that accountants face difficulties due to the majority of their potential clients being small businesses or sole traders, with few large clients to target.
Swanson mentioned advancements in financial software and automation, like QuickBooks and Sterling Bank, potentially reducing the demand for traditional accounting services.
He expressed his own inclination to do his tax return himself due to the ease provided by modern tools, highlighting a trend where sole traders might require less professional accounting support.
He commented on the price sensitivity and competitive market for accounting services, stressing the challenge for accountants to differentiate beyond pricing.
Swanson reflected on the changing role of accountants from valued business partners to service providers focused on compliance and non-critical functions.
He advocated for the use of specialists for specific problems over generalist accountants, emphasizing the evolving market dynamics and increasing difficulty for accountants to stand out.
Insights based on numbers:
Market Size and Penetration: The UK market has about 1.1-1.2 million businesses over the VAT threshold, but only around 800,000 are using cloud accounting solutions.
Firm Adoption: Out of approximately 34,000 accounting firms in the UK, only about 7,000 are effectively utilizing pre-accounting tools like Receipt Bank.
Technology Utilization: Despite being early adopters, many firms, including Farnell’s own, face challenges in fully utilizing the potential of cloud accounting due to data management issues.

⁠
Video 2
⁠
- Richard Sergeant

Critical Assumptions:
Product Appeal: Assuming that if the founder likes a product, so will everyone else, which might not be true.
Generalization Danger: Overgeneralizing (using words like "all," "most," "many") can lead to flawed business strategies.
Misunderstood Quality: Being "made by accountants for accountants" does not guarantee quality.
Market Access Misconception: Believing accountants are the perfect route to the SME market can be misleading. While they have trust and connections, leveraging this channel effectively requires patience, time, and understanding.
Insightful Discussions: The dialogue delves into practical aspects, such as the challenges in selling to accountants, the time it takes to establish trust, and the importance of understanding the accountant-client relationship.
Future Expectations: The compliance value discussion touches on its increasing importance, contrary to the belief that it's diminishing. With digital record-keeping mandates (like MTD in the UK), the need for accurate, organized financial data is more critical than ever.
Compliance and Advisory: Richard emphasizes the misconception that advisory services can easily replace compliance tasks in an accountant's portfolio. He asserts that the foundation of accountancy lies in ensuring compliance and managing taxes efficiently, tasks that are irreplaceable and will continue to be in demand.
Advisory Services: The term "advisory" is considered nebulous, varying greatly in definition and expectations. Richard mentions that while all accountants should be capable of offering basic advisory services like cash flow forecasting, not all are suited to or interested in providing expansive business development advice.
The Reality of Business Advising: Richard challenges the assumption that all accountants can or should become business advisors. He points out that many accountants are primarily focused on compliance and tax matters, which remain their core strengths and client expectations.
Client Relationships and Expectations: The session also covers the expectations between accountants and their clients, highlighting that not all clients seek proactive business advice. The relationship is often more about trust and solving immediate problems rather than ongoing business development.
Future of Accountancy: The discussion veers into the future of the profession, with Richard suggesting that while automation and technology will streamline processes, the fundamental role of accountants in ensuring compliance and providing tailored advice will remain critical. He argues that automation might change the nature of some tasks but not eliminate the need for professional judgment and expertise.

⁠
Video 3
⁠
- Adi


Ad suggests engaging with potential customers to understand their previous purchasing experiences as a way to predict future behaviors concerning new problems or products.
Importance is placed on identifying the consumer's pain point, regardless of the solution's complexity; the focus should be on the end product and how it addresses the pain.
He emphasizes the value of examining competitors' reviews to understand customers' pain points more accurately, which might differ from the company's assumptions.
Ad advocates for the use of specific questions, such as how disappointed customers would be if the product no longer existed, to gauge product-market fit.
Stresses the necessity of collecting verifiable data and validating hypotheses continuously to ensure the product is on the right path to market fit.
The goal is to achieve at least 25% of customers stating they would be "extremely disappointed" if the product didn't exist, which is a metric for product-market fit.
Strategies for optimizing product-market fit include targeting the segment that values the product highly and improving features based on customer feedback.
Another indicator of product-market fit mentioned is achieving a 1:1 ratio of marketing spend to revenue generated, which, once reached, allows for scaling and profitability optimization.
The overarching theme is the importance of rapid testing and data gathering to iteratively improve the product and achieve market fit efficiently.

Questions for accountants

Accountants love helping other accounts - but not clear why?
What areas surprise you by not having been developed yet?

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