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How to move your SMSF business to the cloud

By Kris Kitto
May 18 2016
7 minute read

It’s 2016. The arguments about moving your business and your clients to the cloud is over. Let’s take a comprehensive, practical look at how to make the switch with minimal business and client disruption.

Cloud accounting has won the battle against legacy desktop and server based products. Most accounting businesses I speak to already have moved to the cloud, or are in the process of doing so – but why is it also essential to move your SMSF clients to the cloud?

SMSF cloud benefits

There are a number of obvious and not so obvious reasons to migrate your SMSF clients to the cloud.

Like any disruptive technology, cloud SMSF accounting applications solve the same problem (SMSF compliance) in a better, more efficient way. Third-party data feeds for bank and investment transactions are the lifeblood of any cloud accounting application and when combined with built-in automation tools provide powerful efficiencies.

Unfortunately, the bar has been set low when it comes to the experience SMSF trustees receive from the average multi-discipline accounting practice. Businesses that provide a fantastic client experience for their SMSF clients stand out from their peers. Implementing cloud accounting software provides an opportunity to overhaul how SMSF clients are looked after – essentially a business can re-boot that part of their business and potentially leap-frog the accountant down the street.

Cloud applications may cost more, but when correctly utilised they work out cheaper. This argument applies to most software as a service (SaaS) products. Not having to constantly install and update desktop or server applications – or even maintain a server at all – upfront software costs and ongoing maintenance can be eliminated. Looking specifically at SMSF accounting applications, value also comes through efficiency gains. In my experience, we were able to reduce processing time by 80 per cent, per client.

Flexibility is a great benefit of cloud technology. Being able to work from home or across multiple physical locations seamlessly can be incredibly powerful. It can enable remote teams and enhance communication if your business works across different physical locations as everyone is working from the same data.

Similarly, most SMSF cloud applications provide online access to external users like SMSF trustees and their advisers. This access to up-to-date information is critical when it comes to providing any SMSF-related advice. A word of warning here: if you are an accountant who does not provide online access to your SMSF trustee clients or their advisers (especially if their advisers are a referral source for your business) it’s only a matter of time until they move to someone who does. Providing access to accurate and up to date SMSF accounts and consolidated portfolio information is no longer optional – it’s a minimum standard when it comes to servicing SMSF clients.

Integrate or die. In the cloud, applications no longer exist or work in isolation – they connect to other applications. This improves the accuracy of information contained in various databases and systems across your business. For example, in our business the same client data is synced across our SMSF administration application, practice management, CRM, document management, billing and marketing applications.

Great software can make you and your team better accountants. This particular benefit of cloud SMSF accounting came as a surprise to me. I believe the reason for this is that software engineers have to map the processes accountants use to achieve an outcome or solve a client problem. In comparison, an accountant as a professional just ‘does it’ without any thought to the process they undertake to make that decision or solve the problem. By looking at these processes with fresh eyes, software engineers are able to design software that provides the best outcome in an efficient and repeatable way rather than relying on many years of accounting experience. This concept is also known as ‘software is eating the world’.

Making it happen

The biggest lesson I’ve learnt when it comes to any kind of business change – including moving your business to the cloud – is to commit. No half measures. If you make a decision to move your SMSF clients onto a cloud accounting platform, then embrace that decision. Don’t keep a foot in each camp by maintaining some clients on a legacy desktop system. Failing to commit will commit you to failure.

Another form of commitment is ensuring you use the cloud application to its full capacity. Cloud software can cost more than legacy desktop and server-based programs, so you need to ensure you squeeze the most out of it. The key lesson with SMSF administration software specifically is to get all possible data feeds activated as soon as possible. As mentioned, data feeds are the lifeblood of SMSF accounting – so if they’re not present you are not getting the full value of what you are paying for.

Choose the best cloud providers. This doesn’t mean the best providers in the accounting space. For example, applications in the document management and CRM areas cover multiple industries. Look for apps that are the best of breed in their field, and that can be customised to suit your business. This often provides a better experience for all users. Employees are more likely to embrace apps with a great user interface rather than clunky accounting industry specific apps, which although functional may not be the best for the user.

It’s important to choose applications that have existing ‘out of the box’ integrations as well as a well-documented and supported API (application programming interface). Using applications with strong APIs will future proof your business as it provides flexibility with pushing and pulling data in and out of the app.

You want all the applications in your business talking to each other. For example, in our business our CRM connects to our practice management software and our practice management software integrates with our SMSF admin software, document management and billing software. In addition, look for external service providers such as auditors, actuaries and SMSF documentation providers that have built integrations with the core SMSF administration platform so all parties are working from the same common data.

Think about the entirety of the SMSF value chain. Work with partners who also understand their role in it. For example, if you are moving your SMSF accounting to the cloud ensure you work with an auditor who is comfortable and confident extracting the data and reports they need from your software. Similarly, if you have a financial planning referral partner, ensure the bank accounts and investment platforms/brokers they use for their SMSF clients provide a data feed you can utilise. Only by having all parties in the value chain working together can you extract the true value of cloud SMSF accounting software.

Get your team involved. If you are going to make the move to the cloud, you need to ensure the key members of your team are on board and will champion the changeover. You may encounter resistance – some people don’t like change – this resistance will lead to failure. How you manage this change will depend on you and the culture of your business but one thing is certain: You can never communicate enough. Communicate the why, what and how of the change as much as possible.

Beware Parkinson’s Law, which is the phenomenon of the work that needs to be done expanding to fill the time available. If you successfully implement an efficient cloud accounting system within your business, work should be completed quicker and additional capacity created. This new found free time is scary to some accountants – you may find they stretch the work they have to make them appear busier than they actually are. You need to provide additional high-value work to fill the gap.

Focus forward, not backwards. A hurdle with any transition to the cloud is moving existing records to the new cloud platforms. I’ve found you need to be pragmatic when it comes to what information and data is actually transitioned. With SMSF accounting most of the information you need is from the last 12 months. Dedicate resources to moving that information and leave the rest on the legacy system. Simply remove access and reduce the number of licences. Be careful to ensure users with access to legacy systems don’t fall into bad habits and find excuses to continue using software you don’t want them using.

Understand your clients. SMSF trustees do things their own way – be prepared for this. Just because you can complete all your clients’ returns in a short period of time through technology, it doesn’t mean your clients will play ball. Clients are creatures of habit – if you lodged their SMSF return in March last year, they are expecting it to be lodged in March this year.

Similarly you need to communicate – but not over communicate – your new capabilities when it comes to their SMSF accounts. Specifically I don’t recommend explaining in detail how the new cloud accounting software works. Too much information will just confuse them. Move their accounts to the new platform, do the work then schedule a meeting with them. Show them what they can now see online, how they access it and any limitations. Get the data feeds authorities signed – do it face to face if possible. Your clients trust you and you’ll have a higher hit rate compared to mailing out forms to sign. You cannot short-cut these conversations. If you have 100 SMSF clients, then you need to have 100 conversations.

Security and ownership of data has been an area of focus with cloud solutions. Don’t get caught up on these items. Established and reputable cloud software providers make a significantly better job of security, data backup and redundancy measures than an accounting business ever could. It’s their job and they do it well. Focus more on your internal security and the systems you have in place when a team member with access to these cloud applications leaves your business.

The final piece of advice I would provide accountants moving their SMSF clients to the cloud is to seek the experience of others who have made the journey. Ask software vendors for other similar businesses who have successfully made the transition, or reach out to your own network for recommendations. I can guarantee one thing: You will move your clients to the cloud – the only question is when!

Kris Kitto, director, Superfund Wholesale