The great advantages of online accounting software – reduced data entry, fewer errors and faster processing – are without question a boon to businesses. But they are also forcing bookkeeping and accounting practices to evolve with the rapid pace of change to survive.
I realised that if you give the optimal business advice to clients you may look around and see you’ve done yourself out of your own business.
When I was initially introduced to Xero, I was worried reconciling at a superhero-like pace would lead to errors. However, during a number of Xero implementations I’ve run the old desktop based solution in parallel and carefully monitored the outcomes.
The reality is that bank feeds enforce accuracy on management reports; no longer can unexplained transactions be manually added to the accounts, dates of transactions can’t be changed, and there’s more time available to review the reasonableness and accuracy of information. All relevant paperwork can be uploaded into Xero, so a BAS or tax professional can quickly check and correct any issues in real time.
An optimal online solution for a typical business including Xero (accounting solution), Receipt Bank (extracts data from bills and pushes it into Xero) and SafeGuardMy (Backup solutions for online information), the need for data entry, administrative duties and travel time is astronomically reduced for the typical professional bookkeeper.
Professionals working in this industry may be charging an hourly rate. If clients no longer need you assisting them for the same amount of time you charged in the past your own business turnover is going to decline. In my own situation, I’ve seen the support I’ve offered to long standing clients drop to 10 percent of typical billings after implementing Xero. Not drop by 10 percent – drop down to 10 percent. That’s a 90 percent drop!
What options does the bookkeeping or accounting practice have to protect their business?
- Increase hourly rate
- Increase client base
- Offer additional services
- Charge based on the service offered
- Package your offerings
So the easiest thing to do is keep on charging what you are charging and just increase your client base. But is it the optimal and only solution for your business in the long term?
I also hear business owners complaining their accountants are not giving them enough attention. With all this extra time up your sleeve, how else can you help business owners? Setting and analysing budgets, developing KPIs, producing and explaining management reports, business planning, brainstorming sessions, chasing debtors, etc.
Agents have told me they’ve even assisted with other aspects of the business such as marketing and website development. Yes, in case you’re wondering, it’s ok for a BAS agent to do everything I’ve mentioned above.
Now the business coaches and young guns from the sidelines have picked up their megaphone and started yelling at you, ‘Stop charging hourly!’ Did you hear them?
It’s easy to say but implementation is a bit trickier. At one end of the spectrum some practices have invested in some great marketing and are charging breathtakingly high prices for their packages.
Others have rushed into offering packages, and found they did not fully detail their scope offerings; they’ve excitedly signed the client to a minimal monthly support fee, the client then sacks their internal administrative assistant, and expects the support package to cover everything and more! This commitment will crush you.
If you’re contemplating offering a support package you need to understand the detail of the package. Review what you offer and take a look at how some of the savvier Xero accounting partners have repositioned their services.
What will your practice do to survive the cloud onslaught?
