5 key steps successful Xero Practice firms are doing to implement Microsoft Power BI as a service

When you are a cloud first Xero practice firm, it opens the door to an interconnected new world. Single ledger for client and firm, practice management in the cloud and a client base already on Xero for accounting and utilising or transitioning to the cloud for operational platforms that sit inside the Xero marketplace. Inventory management systems, payroll, CRMs, payments just to name a few.

The Xero marketplace is where firms are really looking to push the boundaries and harvest the huge amount of cloud data their clients now have. Welcome to the world of Business Intelligence. Welcome to the world of Microsoft Power BI. Ranked by Gartner as the best in the world inside the Magic Quadrant for Analytics and Business Intelligence. The accountant can bring all this rich data into a single source of truth and now offer reporting to their clients and their own firm that previously they would only have dreamed about.

How do you get to this point, where you are creating these new and wonderful opportunities with Microsoft Power BI? I have been watching accounting firms attempt to do this over many years and I’ve been able to identify some of the key things they have implemented along this journey to get there. I present to you…..

5 key steps successful Xero Practice firms are doing to implement Microsoft Power BI as a service;

1.     Internal Reporting FIRST 

Setting up Xero Practice Manager (XPM) Power BI Reports first – the old saying goes, if you see the value they will likely as well. Test it on yourself. It’s amazing how quickly your mind explodes with thoughts and opportunities for your clients with the same technology.

 There are several reasons why Power BI is so valuable with XPM;

-        Live & Dynamic Reporting - Power BI refreshes the data repeatedly across the day. It’s no longer an end of month process, data dumping, reconciling. You open the report and it’s reflective of where you are at, at that time.

-        User Segmentation - Having the ability to easily filter and distribute separate reports to partners, managers and individual staff members. The peace of mind you get knowing everybody has access, but you have set the rules as to what all team members can and cannot see.

-        Customisation – Accounting firms all have their own nuances and KPIs, which are critical in reviewing performance. For example; Fees plus WIP minus Credit Notes from Xero Blue or even looking at a correlation between client profitability and client NPS scores. There are so many different areas that an individual firm might like to review as their interpretation of success, and with this software, you can achieve this.

 The three most popular reporting templates to look at are;

-        Staff productivity, Client profitability/Recoverability and WIP analysis. You can get these reports setup in a matter of minutes.

2.     Productisation  

Productisation of advisory services works. The same way we have productised the compliance services inside accounting firms. Moving clients onto a monthly, recurring, sticky and passive income stream is not only immediately profitable, but it also opens the door to multiple different additional revenue streams like business coaching and custom client reporting with operational and marketing reports.

Building out a custom client report deck with a Xero data source and then scaling it to a list of your top clients, I see as profitable and successful with accounting firms. This report deck normally includes variance analysis, budget v actual, debtor/creditor analysis. You can even rank poor paying customers, customer analysis by location, growth comparable YTD.

Having this standard productised service offering firstly creates a new revenue stream, but it also gives you a bird’s eye view of your top clients. You start having conversations with each other that previously you may not have. The feedback is very positive, and the clients appreciate having a place to go to review their business.

3.     Scale

Segmenting your client base into different areas and building out reports that you can scale to different pockets, can lead to a win/win for your business and your clients.

A Xero data source is essentially the same in layout under the User Interface. They all have invoices, accounts, credit notes and bank transaction tables. The profit & loss and balance sheet are reconciled using the same method for each client. This is the standard way of extracting data from Xero, and what this means is a standard way of delivering reporting to your client base.

It also opens the door for new conversations with clients about what further reporting they need or want. It’s much easier to scale general reports, which lead to only minor adjustments to individual clients.

This is particularly true with clients who are yet to grasp the potential of data driven decisions. Being able to deliver the standard templated reports quickly, you can share with them and allow them to consume the value and then ask for more.

4.     Automation

One of the first projects we recommend accounting firms start with, is reviewing all your clients who are currently receiving reporting through Microsoft Excel where you are completing monthly, quarterly or annual repeatable tasks. This would normally be an Excel template which you CSV data dump the Xero trial balance into, which then feeds into the Excel tabs. Automating this process through Power BI will eliminate the repeatable task and remove WIP and data integrity issues. It is an immediate and quick win.

Another aspect to automation is the actual automation of the Power BI reports themselves. To be able to open a report and it dynamically shows last months results, current months, last week, upcoming quarter forecasts is so powerful. You can do this through the TODAY function inside Power BI and it is powerful. Why? Imagine if you rolled out a monthly report to 50 of your clients. Are you telling me that you are going to roll over these 50 clients manually each and every month or week? Probably not. Welcome to the TODAY function! It can save a lot of time and money.

5.     Choose a Champion in your firm

Executing Power BI as a service in an accounting firm with a partner or director driving the growth of the reporting has historically not been the best option. The champion in your firm who runs this service is likely; 

-        The Microsoft Excel guru, who can be intermediate or junior level

-        A new hire with specific skills in Power BI already

 The added benefit is rewarding your cloud champions in your firm which also creates a level of staff retention. Junior staff members are excited by the new frontier of business intelligence. You are upskilling your talent.

CONCLUSION

Humans are able to THINK. Big picture, we are responsible for decisions and can perform damage control. It is such a powerful skillset and by working with machines to assist us, we can move into the future without any fear of being replaced as we evolve our skillset.

A next step as you explore the world of business intelligence is to read Where to start – Power BI in your Accounting Firm.