Cloud-based technology vendors are producing more time-saving apps that automate everything from data entry to expense management -- tasks that used to fall in the laps of bookkeepers and accountants – at a pace that is making most professionals feel overwhelmed.
In the not-so-distant past, bookkeepers were expected to perform data entry, reconciliation, compliance and other similar tasks. Accountants would come in to do reporting and analytics, though generally either quarterly or at the end of the year, meaning the reports functioned more historical documents than actionable insights.
Are all these new technologies replacing the jobs of bookkeepers? Not at all, in fact I’d argue they’re freeing up bookkeepers to become even more valuable partners to their clients’ businesses.
How Bookkeepers are Adding Value
Technology has created a paradigm shift in the way organizations approach their financial information, and it is affecting what organizations want out of their accounting professionals. Now that bookkeeping is no longer about recording and reconciling data after the fact, today’s bookkeepers have access to real-time business transactions processed daily. This data, combined with industry experience and expertise, means the bookkeeper’s value is increasingly in consulting with their clients.
Helping organizations analyze and make decisions based on the data is a valuable — and highly sought-after — service. Clients want strategic advisors, not compliance and data entry experts. In fact, even back in 2013 a survey by technology consulting firm The Sleeter Group found that 72 percent of small business leaders had switched CPAs because their former CPA “didn’t give proactive advice, only reactive service.”
Your value is in being the educated, trusted individual who can help business owners make good decisions and leverage them with the least amount of manual labor.
How? In three broad areas:
1. Understanding KPIs and industry standard metrics. When you understand the KPIs of businesses similar to those of your clients, you can help them make smarter decisions about how to hit those metrics through benchmarking.
For example, you may realize what one client is paying for phone services is way out of line with similar businesses, and recommend they look into the VoIP system that several of your other clients uses. Or, you may offer to analyze the real-time data gathered from the sales team’s expense accounts to find trends and recommend ways to reduce it.
2. Implementing accounting technology stacks. Most of your clients know there are excellent accounting technology tools out there — but researching and evaluating solutions takes time your clients don’t have.
Your clients want your help in understanding the market and navigating the options. By making yourself the tech stack expert, you can help your clients implement the right solutions.
3. Defining and developing business and accounting processes. As part of your duties in analyzing data, you can also help your clients streamline their businesses and prevent problems. For example, if you notice an issue with missing receipts, you can recommend an expense tracking software. Or, recommend a bill paying software that helps prevent fraud.
Shifting Paradigms Requires Shifting Mindsets
For most of us who have been in the business a while, offering these sorts of services will require a new business model. Instead of using commodity-based pricing to sell hours or services, forward-thinking bookkeepers need to use value-based pricing to sell their expertise.
The good news is that this is potentially a more lucrative business model. Whereas the market generally sets the price on commoditized accounting services, a good CPA with a consulting mindset can set his or her own rates based on the value they bring to their clients.
The idea of an industry-wide shift can be unsettling, but I see it as one of the most exciting times to be in our industry. Bookkeeping is becoming a highly specialized profession, and good Accountants are now being valued more than ever for our business acumen and technical expertise. It’s important to become more than the bookkeeper by advising your clients on key decision-making areas.
In the rest of this series of articles, I will dig deeper into how to shift your own mindset, along with other next steps for accounting professionals who are ready to embrace this new paradigm.
AccountingWEB and Xero are proud to present this content through a four-part series. Xero shares in our commitment to help bookkeeping firms better serve their clients and drive growth. Learn more at xero.com.