The Virtual Office – Ten Years On

Just over ten years ago I set up as a ‘sole practitioner’. Newly returned from 3 years living in Australia and with our youngest child having just started school, I was doing some consulting work. But with a few people begging me to be their accountant and armed with a practising certificate I set up my own practice. I kept doing some consulting work to help pay the bills but gradually grew the practice, focussing on compliance (financial statement preparation and tax return work). I developed electronic workpapers, templates, and checklists. That was 2001. Word spread and by 2003 I needed some help. I had almost stopped doing consulting work and was working school hours from home and then more at the evenings and weekends. I couldn’t justify the cost of getting an office (and didn’t need one) and wouldn’t have been able to “man” it for normal office hours anyway.

Sue joined us but was based in Nelson. We both worked from home and used a combination of email, phone, skype, couriers, and Microsoft Word and Excel to get everything done. By 2005 we had 2 more part timers working with us and brought in MYOB’s Accountants Office. To use AO we had to operate it centrally so Martin, my husband, who has an IT background, implemented a remote access system for the 4 of us working part time from home. We’d manage to get together in person every 6 months or so.

The combination of AO and remote access meant that we held everything centrally. We hired a student who came in 4 half days a week. Anything that didn’t come in electronically eg MYOB, spreadsheet, she scanned. If there were bank statements she scanned them and built cashbooks. All our client files became electronic folders. By having everything electronically we didn’t need to send anything anywhere and from our end we were almost paperless.

Our concern then became the quality of records we were getting from clients. How they were able to keep track of their business finances I do not know. The daily bank balance via internet banking was all they wanted. But I felt they needed a good accounting system that they could manage themselves and MYOB, Cash Manager etc were just too difficult for business owners. They had to get in bookkeepers which was costly and getting information was just too slow. The accounting system really just produced the GST returns and nothing ever balanced with the bank! By 2007 I had almost convinced Martin to build us a basic but easy to use cashbook system when a flyer came across my desk about Xero. It looked to be just we what our clients needed. And it has been.

We already had faxes coming in via email but then we moved the phones to the internet via 2Talk. It emails us all our messages. The remote access means that we can be anywhere in the world and still be “in the office”.

Fast forward to 2012 – all our clients are on Xero except a very small handful. All year end compilation work is prepared in Xero and all tax returns prepared and filed through WorkflowMax which pulls the IR10 details from Xero. All workpapers, checklists and templates continue to be electronic and almost every communication is done electronically. We have truly become a paperless office.

In May 2012, bucking every trend, we also opened an office downtown. This move recognises that some staff like to work in a downtown office and provides a convenient base for those clients who wish to physically meet.

Several things have worked really well. By running a remote office from home we have been able to keep costs low. We have had flexibility about where and when we work. Our staff have all worked on contract and are paid by “compilation”. Therefore we have no WIP. We pay on completion of a satisfactory review. This has provided an unexpected incentive to finish jobs which allows us to turn work around relatively quickly (although not always as fast as we’d like) and we have no cost until we can invoice for the work. We pay on completion but don’t wait until we’re paid. Fortunately we have no debtor problems.

The very nature of the work lends itself to a remote system, similar to newer outsourcing models now better accepted by accountants. Working from home was driven by the need for flexibility (having children at school) but we couldn’t have done it without Martin’s in-house IT expertise.

Having flexibility means we are nimble to adapt to new ways of doing things and to increase capacity or decrease it when required. Even moving into a downtown office was done in hours and in the case of disaster we should be up and running as soon as we can get to the internet.

The downside of operating remotely doing compilation work is that there is limited direct client contact and less opportunity to provide additional services. This has focussed that work on me in Wellington which limits our capacity to provide these add-ons.

It can also be difficult to recruit staff who want to work this way. Because it’s not mainstream it’s not readily accepted nor is it seen as a career path by many. We’ve also found some people find it difficult to motivate themselves if they don’t have an 8.30am to 5pm work environment so it doesn’t work for everyone.

Developing a firm culture is also more difficult when staff are spread out, as is the ability to share knowledge that occurs more naturally in on office environment. However none of these outweigh the flexibility of being able to work from home.

Since we opened the satellite office in Wellington’s city centre last month we’ve had a mix of staff at home and in the office – all working remotely. The office is mostly “manned” 8.30am – 5pm to give us greater flexibility to attract staff who prefer a “traditional” work environment and can see a career path and for clients who feel more comfortable meeting in an office environment.

In the last 10 years we’ve seen a huge swing in demand for instant financial information, readily accessed by business owners, a resistance to paying for historic compliance information, and a move by other players such as financial planners and business coaches into areas previously covered by accountants.

So what’s next? Well I’m enjoying going into an office downtown every day after having been at home for 22 years. There’s 8 of us now (still mostly part- time) and several hundred clients with a large compilation/ compliance base. We’re continuing to grow, constantly improving what we do and how we do it, being guided by the ongoing demands of clients and staff. There’s a lot to do!