The Top Ten of Being a Leader in Accounting

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1 PROFESSIONAL SERVICES SMARTER SMALL BUSINESS REPORT Top tips you can t afford to miss

2 CONTENTS SHIFTING BOUNDARIES IN AUSTRALIA S PROFESSIONAL SERVICES SECTOR RETAIN STAFF WHILE CONTROLLING COSTS BOOST PRODUCTIVITY THROUGH KNOWLEDGE SHARING DIFFERENTIATE THROUGH CUSTOMER SERVICE MANAGE CONTRACTOR AND TECHNOLOGY RISK STORIES FROM SMALL BUSINESSES LIKE YOURS BUILDING FOR THE FUTURE FOUR THINGS YOU CAN DO TODAY 2 3

3 SHIFTING BOUNDARIES IN AUSTRALIA S PROFESSIONAL SERVICES SECTOR The professional services sector has enjoyed an annual growth rate of six per cent per year between 2006 and 2011 thanks to the growing trend of business and government outsourcing of non-core activities such as legal advice, accounting, IT management and advertising. 1 Globalisation means competition from overseas is rising in some sectors, yet capitalising on overseas expertise is potentially another business opportunity. TOP FOUR ISSUES FOR PROFESSIONAL SERVICES FIRMS 1 STAFF RETENTION GIVEN SPIRALLING WAGE COSTS 2 COLLABORATION AND KNOWLEDGE SHARING 3 DIFFERENTIATION IN AN INCREASINGLY COMPETITIVE MARKET 4 GROWING RISKS WITH TECHNOLOGY AND OUTSOURCING THERE $26% ARE OVER GROWTH IN EMPLOYEES IN HEALTHCARE 250,000 PROFESSIONAL SERVICES BUSINESSES Between per cent 2005 of and all Australian 2010 the number businesses of people are in employed this sector by this and sector competition grew by is 26 increasing per cent. adding Of the 737,400 value to employees, differentiate 19 your per cent service are is vital. aged 55 or older and 75 per cent are female. Source ABS Report Counts of Australian Businesses; ABS Media Release Source Towards (21 May a 2013) Clever Increase Australia in the - industry number insights of Australian white paper businesses (Health): Telstra (2013) IT S AUSTRALIA S FASTEST GROWING BUSINESS SECTOR. The professional services sector grew by 25 per cent (Growth Value Added or GVA) between 2006 and 2011, which was the largest increase in GVA of all sectors. Source ABS report Australian Industry ( ) AUSTRALIA S SECOND LARGEST BUSINESS SECTOR. Our professional services sector contributed $103 billion to Australia s economy in , making it the second highest contributor after mining. An extra 80,000 workers (an 8.7 per cent increase) joined the sector in Source ABS report Australian Industry ( ) LABOUR COSTS CONSUME 43% OF LAW FIRM REVENUE. Professional services staff typically need tertiary qualifications, so wage costs are a massive share of revenue, and keeping good workers is a challenge. Source IBISWorld Report M6931 (2012) CLIENTS WANT YOU ON SITE, OR EASILY ACCESSIBLE. Many professional services firms take a team approach to client service, so collaboration and communication between locations is important. THE CLOUD IS CHANGING WORKPLACE BOUNDARIES. Many firms are capitalising on the benefits of Cloud computing by outsourcing services and using technology to expand services without necessarily adding headcount. This brings new risk management challenges in protecting client data and intellectual property. 1 Source ABS report Australian Industry ( ) 4 5

4 RETAIN STAFF WHILE CONTROLLING COSTS Keeping highly skilled staff is a big challenge for all businesses within the professional services sector. For example, in the engineering, design and consultancy sub-sectors the inadequate supply of skilled local labour has seen the demand for engineers met by skilled overseas migrants. 1 Managing salary budgets is the reciprocal challenge: in law firms wages represent 43.4 per cent of revenue. 2 I ve got a desktop, a laptop, an ipad and an iphone, and now I can use any one of those to access an up-to-date [version] of what I need. They are all synced which means we ve really improved our productivity. Martin Nally, HR Anywhere AVOID TECHNOLOGY GROWING PAINS When adding more staff quickly, technology must keep pace or workers will become frustrated and lose productivity. Cloud technologies many firms are looking at Cloud-based solutions as they make it easier for teams to collaborate online. For example, in the accounting sub-sector 23 per cent of accountants currently use Cloud-based accounting solutions, with 60 per cent not currently using it intending to do so in the future 3 VoIP phone systems Voice over Internet Protocol systems use data connections to deliver communications, so you can scale your business faster without having to wait for extra lines Technologies which put data connections to clever use can offer cost savings that allow you to deliver better services to more clients. MAKE IT EASY TO MOBILISE YOUR WORKERS A flexible workplace is attractive to many professionals in this sector as they often need to work onsite with clients. Providing them with the tools to work away from the office will help ensure an engaged, productive workforce. Have a Bring Your Own Device (BYOD) policy. BYOD can reduce costs and boost productivity, but it can also put IT systems at risk, so best-practice security measures are essential Get access to files through the Cloud. Mobile working also offers the potential to reduce rent costs Quality video conference technology will cut travel time and make multisite collaboration easier. 27% OF AUSTRALIAN BUSINESSES SAY THEIR BIGGEST PRODUCTIVITY ISSUE IS DOWNTIME AND KNOWLEDGE LOSS DUE TO INCREASING EMPLOYEE TURNOVER. Source Randstad World of Work Report Source Engineers Australia: Inquiry into the Shortage of Engineering and Related Employment Skills (March 2012) 2 Source IBISWorld Report M6931 (2012) 3 Source CCH national research study (April 2013) Cloud Computing a matter of survival for the accounting industry? 6 7

5 52% OF SMES WOULD CONSIDER CHANGING ACCOUNTANTS IF THEY DO NOT MOVE TO A CLOUD-BASED SYSTEM. Source CCH Survey April 2013: Cloud Computing a matter of survival for the accounting industry? BOOST PRODUCTIVITY THROUGH KNOWLEDGE SHARING Professional services businesses are already operating online. In 2012, 68 per cent of them went online for ordering and invoicing. 1 Many accounting firms now access client financial records through Cloud-based software, cutting the time they used to spend chasing clients for missing statements. With secure online access to data, documents, knowledge and internal advice when out of the office, professionals can work flexibly and improve customer service response times. USE THE CLOUD TO COMPETE If you re not already using Cloud-based collaboration tools, there s a good chance your competitors are and they re able to respond faster to customer queries, with more accurate and timely advice and analysis. Synchronisation make sure any new toolkit integrates with your other systems Familiar interfaces your people need to be comfortable with the new technologies, so choose tools that present familiar user controls and work across multiple platforms Gain access to real-time data and clever analytics a sure-fire way to impress clients is to give them the best answer the first time, by accessing complex analytical tools and real-time reports via Cloud technologies. CREATE A TEAM WITHOUT BORDERS In some sectors, such as legal services, profit growth might only come from streamlined management and cost savings. For example, the Law and Justice Foundation of NSW found that video conferencing technologies deliver savings in travel costs. Many firms are also looking at outsourcing non-core operations to offshore offices to reduce the costs of routine tasks. Video calls offer a faceto-face conversation when building relationships and delegating tasks across cultural borders. Video calls can make client meetings and team building more personal. We get in there, roll up our sleeves and deliver outcomes for our clients. We can only do that because we have access to our tools, templates and processes via the Cloud Elizabeth Newbound, Australian Pressure Testing Services 1 Source ABS Year Book Australia 2012: How Australia accesses and uses the internet 8 9

6 DIFFERENTIATE THROUGH CUSTOMER SERVICE While the professional services sector is growing in Australia, so too is the competition from emerging economies. While this could be an opportunity for your firm to outsource, it might also pose a threat to your existing client base. What s more, many professional service firms find they re now competing across other sectors. So evolving your services to meet customer needs is critical. For example, if clients are using Cloud-based accounting solutions such as Sage One or Xero, bookkeepers may find their time-based revenue is under threat. Yet it also creates time and growth opportunities for high value-add services such as tax advisory and cash flow management. THE GLOBAL IT OUTSOURCING MARKET WILL REACH BILLION IN $288 Source Gartner Inc media release (July ) EXPAND YOUR SERVICE CAPABILITIES Add to your specialist services by bringing in contractors or creating a professional network. Or turn your service into a product, creating a self-service digital tool or app based on your intellectual property or processes. Video calls through IP telephony let us work more effectively without worrying about breakdowns or sound quality. It makes it like having a conversation in the next room. Ashley Simpson, Galilee Solicitors Expanding geographically? You ll need to roll out simple, easy to use technology and processes so that all customers get the same quality local service, plus the benefits of nationwide insights and knowledge Provide local support. If you see a specific regional opportunity, create a local office Be reliable and contactable. Customers want to have a direct connection with your team, whether that s on the phone, via or through a video conference, so invest in your communications systems Create a network. Another way to expand geographically is to create a national network of local experts. This may happen organically or through a merger, acquisition or franchising arrangement. MANAGE CONTRACTOR AND TECHNOLOGY RISK If your team is working offsite or you re relying on contractors for specialist support, how are you managing the risks involved? As many professional services clients come from the banking and finance industry and government, winning new clients could come down to your ability to protect confidential client data and intellectual property. PROTECT YOUR REPUTATION, AND YOUR BUSINESS The risk of fraud or data theft is always present, so you need reliable back-up systems and data recovery plans. For some professional sectors, changing and complex regulations provide a steady revenue stream, but for others they re a significant cost. Fit secure systems secure Cloud services can support tracking and reporting on compliance with anti-money laundering laws, tax accounting, privacy issues and other requirements Use online knowledge portals. Knowledge libraries or subject matter experts can help you stay on top of regulatory changes. 27% OF ALL MALWARE ATTACKS GLOBALLY IN 2012 TARGETED KNOWLEDGE WORKERS. Source Symantec Internet Security Report (2013) Vol 18 We replaced the majority of our servers and use the Cloud for services like , file collaboration and online telephony. We only pay for what we use so we can treat computing like a utility such as power. Brad Rappell, Mr Rental MAKE SECURITY PART OF THE SERVICE For any organisation, it s crucial to partner with reputable providers the potential loss of reputation and business through lost time or data is too great a risk. Protect your reputation 24/7 IT consultants especially need to instil confidence in the systems they use or recommend, so 24/7 proactive monitoring and support is typically a given Get local support for you and your clients. Your Cloud provider s monitoring and support can be an additional benefit if you make sure their infrastructure is located in Australia under Australian law Comply with international security standards. Check your Cloud services are certified to stringent international data security and privacy compliance standards, such as ISO And make sure you have a disaster recovery plan in place to help minimise the damage of business downtime

7 STORIES FROM SMALL BUSINESSES LIKE YOURS GALILEE DELIVERS BETTER SERVICE WITH IP TELEPHONY Galilee Solicitors specialises in property and general commercial law and has a number of offices in Australia and South-East Asia. Switching to Telstra s unified communications allows employees to use video calls to connect and collaborate, helping foster a strong sense of camaraderie between the Australian and Filipino teams. I can see my manager in Manila and that makes it a bit more personal, says chief operating officer Ashley Simpson. Click here to find out more. ALTERED IMAGES IS ALWAYS AVAILABLE Melbourne-based commercial photographer Ian van der Wolde, of Altered Images, keeps many balls in the air at one time juggling travel for shoots, studio work and the admin to keep his business humming. In this day and age everything is red hot urgent. Clients don t like it if they can t get hold of you, he explains. SECURE CLOUD SERVICES CREATE SERVICE IMPROVEMENTS Mr Rental is one of Australia s largest home-grown domestic appliance and furniture hire chains. The business started in 1991 after the owners of a small Bribie Island video store noticed a gap in the market to rent televisions and video players. The company went through a rapid growth phase when it became a franchise 10 years later, and has grown to more than 90 stores across Australia and New Zealand. Mr Rental s chief information officer, Brad Rappell, explains that the business needed to invest $30,000 to build its own secure network to run the chain and was facing hefty maintenance and electricity charges to keep the systems running. He says the move was risky given the company s changing needs and its plan to experiment with new initiatives. We had all these roadblocks in terms of technology, Rappell says. Turning to Telstra s Cloud services cleared the road ahead. The business found that by using the Cloud it has helped cut infrastructure costs, while tailoring systems to complement new initiatives. Mr Rental now uses powerful Cloud-based tools to communicate new campaigns to franchisees says Rappell: We ve elevated IT from a role of keeping the lights on to a business improvement. We replaced the majority of our servers and use the Cloud for services like , file collaboration and online telephony, Rappell says. We only pay for what we use so we can treat computing as a utility, just like power. He notes, the franchise also operates more cohesively and by using video conferencing for training, it has overcome the distances between its franchisees while cutting $70,000 in travel expenses. Click here to find out more. HR ANYWHERE, IN THE CLOUD HR Anywhere s consultants are spread all over Australia, and even work as far afield as Canada. It depends on Cloud services to provide workers with the information they need to troubleshoot problems and deliver expert advice to clients. We get in there, roll up our sleeves and deliver outcomes for our clients, says managing director Martin Nally. We can only do that because we have access to our tools, templates and processes via the Cloud. Click here to find out more

8 BUILDING FOR THE FUTURE 1PROTECT YOUR BIGGEST ASSET: YOUR PEOPLE There are ways to grow your business without necessarily adding to your salary overheads, and retaining your most talented staff is vital. Offer the flexibility to work from home or remotely, however be sure to include security protocols within any BYOD policy. Set up regular training programs to develop your team s technical and management skills consider outsourcing leadership and coaching training, or deliver via video or app modules to remote teams. 2CONSIDER NEW REVENUE STREAMS Mobility, the Cloud and fast broadband speeds can support new services you might not have considered yet. Turn your expertise into a product for example, by creating tailored software or apps, or add a lower-cost self-service option for smaller clients. Consider creating online training courses to build your reputation for thought leadership. FOUR THINGS YOU CAN DO TODAY 1 RAISE THE BAR ON YOUR CUSTOMER SERVICE RESPONSE Make sure your phone systems connect multiple sites, with the ability to automatically forward calls to mobiles or another office. Use a voic -to- function so you can capture more incoming calls. 2 USE SMART COLLABORATION AND WORKFLOW MANAGEMENT TOOLS Here are a few simple, readily available digital tools that you can begin implementing today to help you start building for your business s future. Set up a shared document system such as Aris so your staff can access the latest version of everything they need on a compatible tablet or smartphone. Cut the time and cost of manual data entry by digitising customer forms with mobile apps like Canvas on a tablet and making sure data syncs with your backend systems for example, Cloud-based project management systems should connect with your client database and invoicing systems. Look into Microsoft Office 365 as a way to share , calendar and all working documents, or industry-specific platforms for time or project tracking that work across compatible mobile devices and laptops. 3BE SMARTER WITH CLIENT DATA It can be much easier to get more business from your existing clients than add new ones, so investing in data management tools can pay big dividends as it allows you to be proactive with client relationships. Make sure your customer relationship management (CRM) system tracks data and syncs with your other systems, so you can trigger marketing campaigns and automated service reminders. Check your team can access client data from their mobile devices so they can be more productive onsite. 4GET READY TO EXPAND If you re planning to outsource by bringing in specialist expertise, or curb the cost of non-core activities, you need strong risk management and communication systems to make this strategy effective. Only outsource tasks offshore if they are easily explained through a set of steps invoice processing, for example, rather than creative design. Add collaboration tools, such as video conferencing and screen sharing, so virtual teams can collaborate and work together. 3 CONNECT WITH CLIENTS AND STAFF VIA VIDEO Video conferencing can provide immediate savings on your travel budget, as well as a big boost in collaboration between team members. IP telephony makes video calls far more affordable, as it brings voice and data together on one network. With a reliable, fast network you should get great sound and visual quality. 4 UPDATE YOUR RISK PLANS Ensure you have access to 24/7 support, set up a data recovery plan and train staff in what to do if something goes wrong. Check that suppliers, contractors and software providers have systems set up to protect your data. If you d like to discuss your communication needs or get more ideas on how to work smarter, feel free to drop into your nearest Telstra Business Centre

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