NOVA Group is an Amaka accounting integrations and automation partner
Digital transformation in the accounting industry is happening all across the globe. We’re seeing a rise in a role we’ve called the Accounting Technologist, someone at the intersection of accounting and technology. These people can both do your books and advise you on how you should build your digital ecosystem.
We’re interviewing Matthew Li, Co-Founder at NOVA group. He has over 17 years of experience in the field. About 12 years ago, he founded NOVA group, a CPA accounting and business services firm based in Hong Kong. He shares his bold opinion on AI replacing jobs, the evolving Accountant role and how firms can generate leads in this technology-driven world.
- What did NOVA’s digital transformation look like?
- How do you build teams with Accounting Technologists?
- Does expertise in accounting technology lead to more leads?
- How has investing in accounting technology boosted margins?
- What does app advisory look like for an accounting firm?
- What’s a major challenge your digital team has faced?
- Will firms that don’t move to technology become obsolete?
What did NOVA’s digital transformation look like?
“At the beginning, we focused solely on CPA work and business services. However, we found that accountants were spending too much money and too much time on handling data input that was not optimal. It was garbage in, garbage out. We went on a difficult journey trying to find ways to standardise the input so that we could standardise the output.
“We eventually found Xero and adopted it internally first. And since we found it to be quite user friendly and capable of features, like international currency handling, that were lacking from other accounting software, we started recommending it to our clients as well. We were the first Platinum Champion Partner with Xero in Hong Kong and positioned ourselves as a leading cloud accelerator. It’s weird, even though Hong Kong is a digital city, the cloud adoption rate is quite low compared to countries like Australia.”
“Then, we were finding that handling just the accounting system could not solve all our clients’ problems. Operations were still a massive part. A great accounting system isn’t helpful if their POS system is rubbish. Even further, if you can’t handle inventory or payments, how can you handle the POS?”
“Based on different client requirements, we’ve accumulated a wide range of experience. We work with over a dozen different solutions that we use to build up our clients’ own digital ecosystems; POS, inventory, HR, payments, accounting, everything. We want to make sure everything is working optimally and digitally for our clients, we don’t just stay in our comfort zone.”
How do you build teams with Accounting Technologists?
“We found people with experience in tech who were working in consultancy firms. We wanted to work with people who could handle both the accounting and the technology sides. We have a partner with a background in computer science and coding, he has worked very well with us, building our entire infrastructure on first grade cloud servers, in order to consolidate our backend with different operating systems and business units.”
“We built up our technology in the background and then started building our team. Everyone from designers, programmers, hardware developers. Our programmers can even customise both mobile and web-based apps for clients. We built an entire digital solutions team that could help our business internally and clients with digital transformation.”
“Then there’s our business services team, the more traditional team. They do accounting, bookkeeping, auditing and all the CPA stuff. I’m lucky to have partners who can manage this side very well so I’m quite hands-off in this area. I’m more focused on the digital side.”
Does expertise in accounting technology lead to more leads?
“When we started, we provided bookkeeping, accounting and auditing, just like any other CPA firm. I didn’t see that as a way NOVA could stand out in the market. We could continue but we wouldn’t be attracting high-growth clients. After getting experience across the entire ecosystem surrounding Xero, we transformed that into our competitive edge and used that to position ourselves better.”
“We started working quite well with tech startups. For example, we’re partners with one of the largest tech incubators in Hong Kong, which is also backed by the government. We helped companies within their incubator program to adopt cloud accounting as a starting point. We then acted as experts for specific solutions, apps and tools, and as strategists for their digital ecosystems.”
“Nowadays we get leads from both sides, traditional, and digital solutions. It’s working quite well. Right now, it’s about a 50/50 split but what we keep finding is that the number of leads from the digital solutions side is increasing far more than the accounting and bookkeeping side, and we expect that to continue in coming years.”
How has investing in accounting technology boosted margins?
“Honestly speaking, investing in tech has impacted our profit margins in a positive way. We’ve focused on SMBs, but with our expertise in technology and recommendations, a lot of international brands have started coming to us. We’re able to handle their entire system from the frontend POS or CRM system to the backend inventory, accounting and ERP system.”
“We fill a gap in which a lot of CPA firms in Hong Kong are still refusing to let their clients move onto cloud accounting. We’re early adopters and a lot of people are moving to us because of this. By using a cloud based accounting system, our accountants, bookkeepers and auditors are saving 50% of their time and can use that elsewhere.”
What does app advisory look like for an accounting firm?
“We plan for 3 to 5 years. We tell clients we don’t want to see them switching systems frequently every 1 or 2 years. It’s a waste of both of our energy and time to participate in such a project. We drive the selection of the apps, digital ecosystem, everything. For example, we work with Hong Kong Land, one of the largest property developer companies in Hong Kong. They use Vend as their POS system and we integrate the backend for them.”
“We did a lot of trial and error internally for 5 to 6 years before we became the sole distributors in Hong Kong for apps like Vend and Revel. It’s now easier for us to look at a solution’s design, functionality, features and capabilities, and to understand if we need it. Internally, we’ve also built a lot of integrations; PDF generators, co-branding tools and other tools for our full suite of digital solutions.”
What’s a major challenge your digital team has faced?
“In terms of upselling and cross-selling our digital solutions to our existing accounting and bookkeeping clients, what we’re finding is during the digital transformation journey, tech is not the key, the people are the key. If people aren’t that keen on technology, I see a lot of people with concerns about cloud technology, it’s very difficult to convince them to transform.”
“On top of that, our digital team is not that big, about less than 20 people, but I can see that they’re already very busy. They have specific specialties that might not be applicable to all our bookkeeping and accounting clients. We don’t necessarily have the capacity to actively transform existing clients yet. We just make sure that they’re all familiar with one or two systems in our ecosystem.”
Will firms that don’t move to technology become obsolete?
“Honestly speaking, for firms who can’t help clients with the technology side within the next 5 years, I think it’s a matter of staying in existence at all. I told my team at the beginning of the year that the accounting industry is on its last leg. Most of the jobs will be replaced with AI in 5 to 7 years. Your firm will not survive if your team can’t adapt to an industry with these technologies.”
“The idea that you can become an accountant, work in a CPA firm, and earn a good living for the rest of your life, that’s no longer true in a world with technology. We’re seeing so much funding going into platforms that are using AI and other similar technologies for accounting, bookkeeping, auditing, taxation. What will be the point of employing people for mundane tasks? Especially in places like Hong Kong where salaries are very high.”
About Matthew Li and NOVA Group
Matthew is the co-founder of NOVA Group. He’s passionate about solving critical business and societal problems by bringing positive changes in our thought process and leveraging effective use of technology, collective knowledge of his network and broad experience from his over 17 years of industry experience in business consulting, auditing and digital transformation, specifically on technology startup, retail and F&B chain businesses. He is currently the Xero Platinum Champion Partner, Oracle Netsuite Solution Partner, Vend POS Partner and the Revel POS Partner in Hong Kong.