Bookkeeping is a proud and ancient profession. The earliest accounting records date back 7,000 years, and were found in the ruins of ancient Babylon, Assyria and Sumeria. These tokens recorded the growth of crops and herds. Later, as kings rose to power, they hired "bookkeepers" to manage their stores and tax collection.
Bookkeeping has come a long way since those days and has seen many changes and innovations to business. But as more and more accountancy work is being automated, many bookkeepers are looking to the future with trepidation. Is bookkeeping becoming redundant?
As I meet new clients, I notice how the needs of small business owners have changed in the last 10 years. However, these clients seem to want similar things:
- Real-time information. Clients need up to date information to make sound financial decisions.
- Automation. Most business owners are focused on increasing their bottom line. Data entry is low on their list of priorities.
- Mobility. In this informational age, many business owners want the flexibility to access information on the go. Cloud or web-based apps are becoming the new norm. The ability to view information from smartphones and tablets is high on the list of “must haves.”
- Autonomy. Many owners want to manage their books with less supervision. They don’t want to be dependent upon their CPA for every little thing that needs to be looked up or every simple question that needs to be answered.
- Easy to Understand Information. Clients want to look at their financial information and see things that they easily understand.
We're living in the age of the paperless, mobile and global office, and there's little call for data entry or book-balancing. As a bookkeeper whose business model has revolved around data entry for literally thousands of years, the prospect can be quite scary.
But it doesn't have to be.
The Books are Changing, and so are the BookkeepersInstead of fearing the impact of cloud technology, bookkeepers should be embracing it. Cloud-based accounting makes bookkeeping much more efficient. It is not the omen of doom for your business, but a tool you can use to improve your system.
Think about it. You have access to all the information you need, 24 hours a day. Neither you nor the client has to print out reams of paper or travel across the city to deliver files. You can run your bookkeeping business from any location, and work with clients from all corners of the globe.
To a large extent, the automated bank feeds and rule-based reconciliation mean a large chunk of a bookkeeper's time is now freed up. What are you going to do with this time?
Well, you could take on more clients, for one. More clients = more revenue. And that's always a good thing. As business (particularly small business) flourishes in the wake of the global recession, more and more people will need the services of a bookkeeper. Cloud-based accounting software will never eliminate the need for bookkeepers, because a person needs the financial knowledge to understand what is happening with these programs. Most business owners would rather outsource this to someone with the knowhow than learn themselves.
Alternatively, cloud-based accounting is opening up opportunities for bookkeepers to expand their role. As long as the bookkeeper doesn't go outside the parameters placed on their business through the relevant legislation, they can add many new services to their repertoire.
Any part of business where a sale, payment, or invoice is involved comes under the bookkeeper's umbrella. Think of additional services you might be able to provide under payroll, accounts payable, accounts receivable, stock, point-of-sale, e-commerce, etc. It's all about helping your client to become more efficient and giving the client advice about the best way to record their information.
But What If I Don't WANT To Change?Well, you don't have to. Nobody is forcing bookkeepers to embrace cloud-based accounting.
The truth is, not all bookkeepers are keen to embrace cloud-based technology. And there are plenty of clients out there who feel the same way. Many business owners will resist change even more than you and will want to keep using the same systems they've used for decades. If you're not keen on learning new technology, then focus on providing bookkeeping solutions for these clients.
Just be aware that these cloud non-adapters are a rapidly shrinking market, and their business profits are often shrinking as well.
Perhaps it's time you thought about your reasons behind resisting change? Is it that you feel too old to reshape your business? Are you scared because you're being taken out of your comfort zone? Do you feel overwhelmed by the technology? Perhaps if you educate yourself more on what cloud-based accounting software can actually do, you might change your mind? There's only one way to find out …
Action Steps for BookkeepersSo, what can you do right now to help facilitate change within your business? Here are some simple steps that bookkeepers should be thinking about right now if they want to grow and flourish in the future.
- Get familiar with the technology. This means using the different available technology yourself, attending all your local training sessions, utilizing online training tools, and attending events such as QB Connect.
- Learn from Thought-Leaders in the Accounting/Bookkeeping Space. One of the best ways to figure out the future direction of your accounting business is to see what others have done and learn how they did it.
- Figure out your new offerings. The role of the bookkeeper is shifting from data entry, to data management. Brainstorm the types of services and packages you might offer to clients. Think about where your skills and interests lie and talk to your clients about where they're feeling stuck in business. You might be able to add value by offering software solutions to help clients manage payroll, e-commerce and point-of-sale, or assist clients who want to do their own accounts with monitoring services.
- Learn new skills. Look for gaps in your skillset that might prevent you from providing your new offerings. Now is the time to start training yourself to give business advice and build on your IT skills. Learning more about solutions-focus, networking and marketing your business could also be extremely beneficial at this crucial stage of your business.
- Think about how you might rebrand your business. Are you moving from a bookkeeping model to one of an indispensable business consultant? Remember, "consultants" get paid more than bookkeepers, so you might want to alter your branding to reflect the changes in your business model. For this stage, you might need the advice of a branding agency, graphic designer or copywriter.
- Forge new collaborative business relationships. There are many people and companies offering complimentary services, such as accountants, tax agents and cloud-computing business advisors. Team up with these people to share resources, offer referrals and give advice to each other. A strong network will help your business thrive.
- Work together with the technology providers. Ensure they continue to provide the best software solutions for your clients. You are often the people closest to the day-to-day business and provide valuable insight into what they need.
By exploiting the new cloud-based technology available through companies like Quickbooks, bookkeepers are able to increase their efficiency and become more productive and profitable than ever. The information bookkeepers can impart to business owners makes them a valuable source of advice, and that's always worth paying for.
Bookkeepers with an entrepreneurial spirit are expanding their services to include wider consultancy and are collaborating with accountants and other B2B services to get better results for everyone.
Bookkeeping is far from dead – it's just evolving. The bookkeeper who collaborates and progresses will always find work.
How is your business changing with technology?