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Cloud creates new horizon for bookkeepers

Before joining Xero five months ago I was a bookkeeper in New Zealand, now as an account manager based in Melbourne I get to witness how bookkeepers are changing the way they do business in the cloud.

For me the new online world was a great way to build a client base and passive income, but it also helped me service clients better and meant my time really was value for money. Nevertheless there are two big concerns that I keep hearing at conferences and these are often a topic of conversation on our LinkedIn group.

  • Are bookkeepers becoming redundant with the rise of cloud accounting?
  • Are bookkeepers going to lose income, as data processing becomes more efficient and we aren’t spending as much time on-site? (Remember, traditionally bookkeeping was an hours game.)

The short answer is NO to both of these. And the great thing is that progressive bookkeepers are starting to understand this.

Let’s deal with the redundancy problem first. Firstly not all bookkeepers do the same thing. Secondly accountants and business owners will not (and should not) replace bookkeepers. It’s widely accepted among small business owners that their focus should be “on the business”. The bookkeeper’s role is to help “in the business” – if they keep the house in order business owners can get on with what they are good at and what they went into business for. Like Sam from AccountsHQ says, “Business owners want to spend their time making money, not accounting for it”.

As for the income and efficiency dilemma, this is more of a mindset shift. If your accounting software is making your bookkeeping work more efficient and your productivity is increasing, this should not be regarded as a bad thing. On the contrary, you have an opportunity to reposition your work from mere (and boring!) data entry tasks to more value added offerings that are ultimately more sustainable and better for you and your clients.

From my experience, the on-site/off-site is not really an issue for business owners. Typically they would like to see the bookkeeper’s face (have you onsite) maybe once a month, but for them the important thing is that their business books are kept up to date, regardless of where the bookkeeper is sitting.

If you’re interested in this new business model and in particular building your online strategy, Wayne Schmidt holds a free webinar that covers this and provides other helpful tips.

We’d love to hear your thoughts on this topic, from all points of view.

 

Read more about Bookkeepers, Australia

 

18 comments

Tim C – FGS
16 November 2011 #

Hi Anna
Great post
As one of the original people raising your first point – and being well educated by the LinkedIN discussion you refer to!! – there is a subtle yet important distinction in what you are saying….

I doubt Xero or the Cloud will make business owners want to do their own bookkeeping – the risk for the conventional, number crunching bookkeeper is that Xero will allow Accountants to take away their clients and their work – either by hiring their own bookkeepers or harnessing the efficiency gains Xero brings and doing it in house

Of course, bookkeepers can now do the same thing to the conventional compliance only focused accountants, thanks to Xero

Cheers
Tim

Rhys Jones
16 November 2011 #

Anna – thank you for this blog. You raised many good points. I agree with you that the cloud will not remove the bookkeeper. I think the cloud provides the opportunity for the bookkeeper to increase the level and quality of service that they offer to their clients. You are correct in saying that the cloud will make data processing much more efficient than the traditional bookkeeping methods of slow data input, however there is more that a bookkeeper can offer to a business. Quite often is the case that the bookkeeper develops into a ‘consultant’ role and takes on budgeting advise. With the assistance of the cloud, this becomes even easier.

Elizabeth Salter
16 November 2011 #

Anna, I certainly agree with you that there is a “new horizon” for bookkeepers. With not only the advent of cloud solutions, but also the previous BAS Agent regulations, there is definitely a new breed of bookeepers forming and we fall somewhere between accountant and the old-style “data entry” bookkeeper. Perhaps a new name/role may eventuate.

I find this very welcome and also pretty exciting. As a bookkeeper, I can get away from so much focus on the data entry and use my management accounting experience to provide real and relevant info & analysis to my clients which is much more exciting for everyone! And their feedback has been that they are loving this value-added aspect of my services.

I think most business owners would highly value the services the “new breed” of bookkeepers can give to them, they just don’t realise that it is out there yet.

Tim – I think that although accountants may take on more of the bookkeeping for their clients, they will still subcontract that bookkeeping out for the most part. Most would not be wanting to do this themselves, so the opportunity for bookkeepers would be still available.

Great blog post, Anna!

Accountancy
16 November 2011 #

Nice post Anna, I will work harder to bring more clients to you. :)
Jerry

Anna Cochrane
16 November 2011 #

Thanks heaps guys, I really appreciate your comments and feedback!! There are so many interesting discussions out there on this topic, so it is good to keep it going, and who knows like @Elizabeth mentioned we could see a new title (there is a discussion on Linkedin on this topic as well). It is going to be interesting to see the evolution over the coming months and years!! @Tim, @Rhys, @Jerry

Ben Talbot
16 November 2011 #

Hi Anna,

What a great post, I agree completely.
The interesting thing that I have found is again the opposite to the “Fear” reaction in the cloud accounting, but joy.
It means we are able to provide far more accurate solutions to clients and increase our overall base of clients, as physical location is not the limiting factor anymore and everybody is working from the same datafile.

Great Work

John Birse
16 November 2011 #

Thanks for the Blog Anna. Your participation at our recent National Conference showed that Xero is certainly at the leading edge of a change in our industry where we are moving away from the old analog (paper based – manual) process to digital (electronic – automated) systems. This process will change the way we all (Bookkeepers, Accountants and Business Owners) approach the processing of financial information and the challenge is to step up and be part of the change rather than resist it’s benefits. Automated payments systems such as EFTPOS,and Debit Card which will move away from cash and cheques toward contactless payments or near field communication will ultimately change data entry from a manual to an electronic process which is reflected in the real world where about a quarter of the population carry around less than $20 in cash with them and over one third of Australians carry less cash than they did five years ago (Source: recent Payment Australia Conference in Sydney) . Xero allows the business owner to view their financial information in a clearly presented dashboard which will empower them to take more notice of money coming in and money going out. Bookkeepers and Accountants will need to be aware of more sophisticated business owners who have now been empowered by software such as Xero to have information at their fingertips which will increase the level of service expected from their trusted advisers. It’s great to see bookkeeping practitioners such as Anna join Xero and add to the bookkeeper aware base that has been built by Wayne Schmidt.

Tim C – FGS
16 November 2011 #

I agree with @Elizabeth about the new name – for those of you smart enough to grasp the opportunity, bookkeeping is NOT what you are doing

i also disagree with @Elizabeth (in a nice way though) – there are plenty of accountants who are bringing the bookkeeping for clients within their realm rather than the external bookkeeper. Whether they employ someone to do this work or use junior staff ….it is happening

Gayle Buchanan
16 November 2011 #

Hi Anna,
yes, remember the post in LinkedIn. As a business owner it’s about running a business we are passionate about, nuturing our staff and having ‘fun’. Compliance is an expense – full stop! Xero cuts the boredom and bottom line F&A costs. The up side has sooo got to be control, control, control. Who would have thought a few years back that a couple of kiwi’s would come up with a way to cut the expense of admin, revert accounting data control back to a business owner and offer the ability to ‘tender’ accounting work with a single ledger. Double high 5 to Rod and Hamish for thinking outside the square and firing up the Kiwi GDP!

Anna Cochrane
16 November 2011 #

@Gayle, @John, @Ben – Thank you so much for adding to the discussion, it is so valuable to get your feedback and hear your experiences as well. I am flattered by all the comments!!

Kathy-maree Bartle
16 November 2011 #

You are a great support and a knowledgeable accounts manager, in all matters. Bookkeepers here in Australia are lucky to have someone who knows what it is like and knows what we go through. Thanks Anna for a great support. I hope your bosses know how great you are and how compassionate you are about your work and your clients.

Darren McMahon
16 November 2011 #

Great comments Anna. I started my business as it is now in January of last year. It was just before this that Xero started a real push in Australia. I don’t think it is any coincidence that my business has gone from strength to strength. The rise of cloud software has definitely changed the game for the bookkeeping profession. Bookkeepers who are really only data entry clerks will always have a place, but those positions will become less and less. More and more of our business revolves around Xero implementations, migrations and subsequent “health checks” and support. Its these consulting services that are being demanded more frequently every day as more and more businesses move to the cloud. They can see that on a day to day basis they can look after their own accounts (mostly). They just need someone to help them with the odd query and look over their file once a month / quarter and lodge their BAS.

I’m all for it. Bring it on.

Gillian Rossouw
17 November 2011 #

Fabulous Blog Anna – always reassuring to know that we have Xero as our voice reassuring the bookkeeping industry our services will be sought after. @Darren and all comments posted, endorse and shout out your comments, we as bookkeepers are now in a different phase of consulting and pleasing to be able to assist the client whether it be face to face or remotely, the journey has endless opportunities and one can feel the client’s enthusiasm and boundless energy as they learn how to use Xero.

Rener Lao
17 November 2011 #

Fantastic post Anna! I agree. Cloud accounting gives small business owners unprecedented efficiency, flexibility and simplicity. But it’s also for these reasons that small businesses will see the opportunity to get a lot more value from their bookkeepers. It’s something that they’ve been waiting for, for a long time. I think there has never been a better time for bookkeepers to show their real value to their clients – as a person who can offer timely solutions by knowing the books inside and out.

Erin Cooper
17 November 2011 #

Great Blog Anna.
I am often asked if I am concerned that I will earn less using Cloud-based systems for my clients. I have never seen a downside to it- I prefer to see the opportunity in being able to work from a home office, and the ability to take on more clients without having to employ more staff thanks to the efficiency of working in the cloud!
I follow with interest discussions on the future ‘name’ for what we do… Bookkeeper, to me, does not encompass the direction we, as Service Providers are moving in, or the solutions we provide for our clients beyond the old school data entry in the back office of yesteryear…

Steve
18 November 2011 #

Cloud accounting is certainly big picture stuff. It will continue to separate the Business Builders from the Technicians in our industry. It gives visibility back to the client and keeps the reactive old school accountants honest (they cant blame the bookkeeper anymore). I’m hard pressed to find the negative in Cloud Accounting.

bookkeeping software
18 November 2011 #

A great post Miss Anna. You have made some fine arguments there specially about cloud computing and book keeping. I will be sharing this out to our supervisor here at the office.

@ToniMcC
18 November 2011 #

Great blog Anna! I have to say, as an acct I’ve been really enjoying working with our network of Xero Certified Bookkeepers (#shoutout to the Sunshine Coast’s “Figurit” and “BeesKneesBkpg”) – its unlike anything I’ve seen in my 17yr career. Bring on 2012 and the many joint opportunities it will bring.

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