Out with the Old, In with the New
By Josh Tuohy - Former Finance & Accounting Support Lead
Originally published on LinkedIn
What is your Accounting or Bookkeeping practice doing to evolve and get more value to your clients?
For as long as I can remember, a large percentage of the Accounting and Tax work performed for small to medium business was spent rectifying data entry errors, fixing bank reconciliations and spending hours finding GST variances (usually because the MYOB backup I was using wasn’t up to date).
There was a turning point in my career when the penny dropped: why would we keep fixing the same mistakes year after year when we could do something about the root cause?
It seemed like such an obvious solution, but I didn’t see anyone around me offering coaching or assistance to the clients or recommending a change in how the bookkeeping was performed. It was like we had resigned ourselves to the fact that bookkeeping for some clients would never be correct, and we just had to make peace with that. We were in a pattern of billing the client to fix up their books, but not engaging with them to get it right in the first place.
Then something happened… Cloud Accounting came to the party!
All of a sudden us accountants HAD to start helping the clients with the day to day bookkeeping as they asked questions about what software they should use, and how they could get back to focusing on their core business.
Because of the massive gains in efficiency that Cloud software provided another big door opened up for the industry, external bookkeeping services could now be provided at a much lower cost, one that would be affordable for a lot of small businesses who had long opted to handle the accounts in-house. Accounting firms could now implement a strategy to allow them to be “Value Add” rather than compliance based. In other words, provide advice to their clients without increasing their billing, because less time was spent on compliance, reconciling the accounts and completing data entry work.
I have witnessed over the past years a few different approaches to this opportunity, some are partnering with external bookkeepers that they can trust with the quality, others are opting to bring the bookkeeping in house (which can now be cost effective) and structuring their fees under a monthly fixed price which includes the full end to end services. Many accounting firms (and bookkeepers) have also implemented a successful offshore strategy to drive down costs even further and give their people even more time and space from the work of the past.
Whichever path taken, the technology has paved the way for Accounting firms to control the quality, allowing them to get past the historical way of working and focus on advice. Some early adopters are finding great success, others are still on the journey, but all are slowly shifting in that direction.
This is constantly evolving, and there is some serious momentum, just look at a photo of the crowds at Xerocon!
As an industry we can drive the momentum further and change the entire landscape for business owners everywhere.