Melanie Power is the Head of Bookkeeping at Xero.
Cloud accounting tools have given small businesses and bookkeepers alike increased efficiency through automation, while empowering financial transparency.
Coupled with hundreds of potential add-ons and integrations (more than 400 at last count), automation of otherwise laborious tasks has made what we do as bookkeepers far more streamlined.
But if everything becomes automated, how do we as bookkeepers continue to add value?
The answer lies in uncovering the best, most helpful data to help the small business you work with to continue to thrive and grow.
It’s no use giving a small business owner a torrent of data that means nothing to them. At the same time, keeping your client in the dark about how their business is running is likely to undermine their trust in you.
It’s far better to tailor data specific to their needs (which you can gather using the core Xero platform and a number of add-ons). You can then use other add-ons to present the data in real-time in a helpful, easy way and work closely with the small business owner to turn the insights into actions.
As an example, let’s take a look at a cafe owner.
A coffee shop is a business that runs close to the bone. The business needs to very carefully monitor staffing, costs and pricing to ensure profitability. Big bookkeeping or accounting bills don’t help — so you have to find a way to deliver information to your client efficiently, cost-effectively and in a timely way.
It’s worth taking a look at the ATO’s performance benchmarks which show how an average cafe performs. With the right automation, your client can get detailed, accurate insights like these from their data and compare their performance with others in the industry.
A good way to approach the client relationship is to agree on an initial startup cost for you to set up systems and processes, so your manual intervention from month to month is reduced, yet you still provide maximum value.
Three key things to present regularly to a cafe owner would be cost of sales to turnover, labour to turnover, and rent to turnover, all as percentages. A real-time view of these key metrics would help the cafe owner flourish in this tough, crowded, yet exciting industry.
This is something that is best done in collaboration with the client and the accountant. You would sit down, dissect the available data, and agree on the key metrics to track.
As the bookkeeper, you’d then implement the system to generate the information and reports, and monitor them as agreed at the beginning of the collaboration. Then, if the figures are outside the parameters decided on (for example, rent as a percentage of turnover exceeds a certain threshold), you can talk to the cafe owner and together work out how they can get back on the right path.
This type of advisory service works really well for everyone involved. Yes, it requires the bookkeeper to adapt to new tools and systems, but it really allows you to increase the value you bring your clients and maximises the impact and benefit of what you do. It also allows accountants to focus on what they need to do, instead of setting up systems which is what bookkeepers are great at. It’s a win-win.
Xero’s built-in tools can help with this and the new business performance dashboard is a good starting point.
Plus, you can use great add-ons like CrunchBoards to create custom reports from real-time information using synced data.
Turning data into insights and then into actions is something that was previously only possible if you were a huge organisation with analytics and finance teams. Now, it’s at the fingertips of every bookkeeper and small business owner.