“Without order, there is chaos”, as Luca Pacioli, the creator of double-entry bookkeeping, famously said; one that is the source of truth for bookkeepers all over the world. As bookkeepers, we live to have order in our world of keeping books. It’s almost an OCD thing dare I say?
This obsession for order has long been the focus of bookkeepers since the early days of lavishly scripted transcription into a ledger, to well-cared for green ledger books, and ultimately to the present moment with online cloud-based bookkeeping.
It certainly has been an evolution.
The way we do bookkeeping has changed tremendously. However, the importance of the function of bookkeeping hasn’t changed. If a business doesn’t have the data available and clean data at that, a business owner is running with a blindfold.
But if the business owner is working with a highly skilled bookkeeper that has the financial information available and can remove the blindfold and allow the business owner to see the present clearly and predict the future? Well, it’s simply…... Magic.
Is compliance dead?
For the last five years, we have seen an influx of messaging from the accounting and tech industry on how bookkeepers really need to be focusing on advisory and using technology to do the grunt work.
Accounting firms (and in more recent times, bookkeeping firms) have been using offshoring teams to do the labour-intensive work of data entry. This model is not new, and this has long been an excellent solution for business owners as part of a holistic service provision.
With the introduction of cloud accounting, and further technology advancements around artificial intelligence and machine learning within the accounting vendor and ecosystem such as BotKeeper, Xero, Quickbooks, Receipt Bank, HubDoc & Expensify, the labour intensive process is reduced to almost zero.
The truth of the matter is there is no value for highly skilled bookkeepers in doing data entry work when we have all of the tools available to do the job for us.
We have long heard the death knell of “Compliance is Dead” being shouted from the battlefield front line but the reality is that compliance isn’t dead!
Tax is not going to stop; it’s just that the race towards zero is on to deliver this outcome for business owners. It’s something they just don’t value, but they know they have to do it. They just don’t want to have to pay huge sums of money for it.
It’s that simple.
Technology is a bookkeepers friend
I have been saying for many years that technology is a friend to bookkeepers. It allows us to outsource the labour intensive work that has so long plagued us. However, we are far from irrelevant. What technology can’t replace is the human aspect.
Small business owners are hungry for that piece in between data cleaning and tax compliance. They want an adviser that they can form a relationship with, that understands their business, that can support, mentor and guide them on their business journey, and save them some tax along the way.
This space is the gap in the market where bookkeepers can really shine. There is a significant opportunity for you to use your gifts and talents to provide value to the business owner. Do the Magic Work; this work is valuable to the business owner.
Don’t get me wrong, bookkeepers and accountants need to do the training on double entry ledger. The understanding of T accounts is 101 learning for financial professionals, and this knowledge at the start of a career is a necessary learning curve, but we do not need to be doing this work in our ongoing professional careers as we now have the tools to do that for us.
Bookkeepers: technology allows us the freedom to deliver the magic work.
Industry hot topic
The current hot topic in the accounting industry is the recent market test that Intuit, are doing in the USA around providing bookkeeping set up services for business owners.
As a long-term champion for the value bookkeepers provide, I was a little surprised to see this, and my first knee-jerk reaction, like many, was to think: “What is a vendor doing providing bookkeeping services?”
I took some time to think more deeply about this. My conclusion was that what Intuit is providing, in essence, is the service delivery that I mentioned earlier around, offshoring, BotKeeper, AI in accounting software.
The one thing that differs with this service offer is that I see it as a lead generator for bookkeepers who want to deliver the magic work.
One of the most significant pain points for bookkeeping businesses is that they have issues with lead generation (and I know this as my community of around 12,000 bookkeepers keep telling me this) and the majority of work I do with bookkeepers is on this topic.
The plan Intuit has on this is that they can deliver the grunt work and refer on the small business customer to their network to provide the magic work.
The truth here is that the low-value data entry work is not something business owners see of value anymore, and neither should bookkeepers. It's about using our skills to provide the magic work to our clients, and it’s work that we can absolutely command the price we deserve for the value we deliver!
My final word here to bookkeepers is that the message has been delivered for five years at a minimum now; we need to change our business model and upskill. The time is here.
So why do we want to do it?
Who wants to be working for $25 an hour?
And bookkeepers all over the world, neither should you. Bookkeepers: we are the phoenix rising from the ashes.
Melanie Power, founder, Bookkeeper Revolution
Melanie Power has not been financially remunerated nor is currently affiliated with any vendors or companies mentioned in this article.