Smithink director David Smith believes the development of cloud accounting software has tilted bookkeeping in favour of accountants who used to struggle to be cost-effective in comparison to standalone bookkeepers.
He added that incorporating such a service into an accounting firm would markedly improve the quality of the ledger, leading to a better service for clients.
“It gives them the ability to do the year-end tax accounting compliance work more efficiently because there are fewer errors, and then secondly they've got access to the data and they are more across the data to be able to help them move into providing more business advisory type services to the clients,” Mr Smith said.
“Doing bookkeeping via an accounting firm with the overheads of an accountant was a relatively expensive exercise and the accountants really couldn't compete with a standalone bookkeeper on price but these days because of the automation, accounting firms are able to do it more cost effectively.
“I think there is an opportunity for accounting firms to leverage the automation and this makes a lot of sense to give them an opportunity for business advisory work and doing the year-end compliance work more efficiently.”
However, Mr Smith does not believe that this trend would spell the end for dedicated bookkeeping firms, instead urging bookkeepers to embrace this as an opportunity to deepen their relationship with accountants.
“You could argue that it's an opportunity for standalone bookkeepers to integrate into an accounting firm and work with them,” he added.
“At the end of the day it depends on the size of the business, if somebody needs a bookkeeper for two or three days a week, you are probably better off with a standalone bookkeeper.
“But if you're only needing a small amount of bookkeeping each week, it will probably make sense for the accounting firm to provide that service as part of their overall technical and complying services as well as doing their bookkeeping… large businesses needing bookkeeping services probably will still stick with a standalone bookkeeper I think.”
Earlier in the year, Lielette Calleja, director at All That Counts, told The Bookkeeper that firms looking to secure longevity in the Australian market need to take a more open-minded approach to business opportunities, which includes embracing working more closely with accounting practices.
“We’ve really got to start looking at forming strategic alliances, because the water is getting very grey and murky between bookkeepers and accountants,” Ms Calleja said.
“We are moving into each other’s spaces, you can’t avoid that,” she said.
Jotham Lian is the news editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.