From XU Magazine, 
Issue 21

Loyalty won’t pay the bills

The image of Bob Cratchit is one of Dickens’ most compelling. Standing at his lectern for long hours filling out ledgers by weak candlelight for his miserly boss Ebenezer Scrooge, Cratchit evoked sympathy in even the most hard-hearted of readers. The digital revolution is here and it is being televised…
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The modern equivalent must be the auditor or accountant in a practice still using spreadsheets to manage accounts for clients. Manually entering figures and running trial balances over and over again while trying to hunt down the miscreant misposting may have been the stock in trade and lot in life for accountants 10 years ago, but there’s no excuse for it now.

The digital revolution is here and is being televised. Accountancy and bookkeeping have been automated to the extent that manual entry is effectively a thing of the past.

Customers are upping their game

Take the example of a popular small business accounting software package. It is available on PCs and smartphones and the user can take a picture of a receipt with their phone, import it to the package which scans it and asks what expense category to post it under. Next time the user photographs a receipt from the same supplier the software will automatically post it to the correct expense category.

No keystrokes whatsoever.

The same software will do the double entry bookkeeping for the user. Long a dark art known only to the cognoscenti with professional accountancy qualifications, double-entry booking had the capacity to mystify even the most numerate and highly skilled business people. Indeed, it may well continue to mystify them if they had to think about it at all.

The availability of extremely low cost automated accounting packages has made such thinking redundant. All they have to do is take the pictures or record the income and expenditure and the software does the rest.

They can happily go from one end of the year to the other without giving any thought at all to arcane accounting rules or conventions. From time to time they may wish to click on a button to generate a cash flow report or a profit and loss account for a particular period with the software doing all the heavy lifting when it comes to the number crunching.

And then they get to the end of the year when the accounts have to be audited. That’s where reality might bite, where shiny new automated accounting technologies meet the latter-day Bob Cratchits who haven’t moved beyond spreadsheets.

Customers’ expectations are rising accordingly

Audit firms still working on spreadsheets, and there are many of them out there, require their clients to delve into the innards of their accounting software in order to export files in various formats such as CSV which will be compatible with their systems. What a CSV format means to a painting and decorating contractor is anyone’s guess. They certainly won’t find it on the colour chart.

That’s bad enough but having done part of the auditor’s work for them, the client then finds they are having to pay a higher fee for the pleasure of doing so. The fact that the auditor is not using the latest automation technologies makes the whole process that much more labour intensive and costly in terms of time spent.

What if your competition makes it easier, cheaper, better, and faster?

Imagine a different scenario. Consider the situation where the business becomes aware of a competing firm that lets them know that they take files electronically, in any format, and from any software package with no lengthy conversions and no potential for data corruptions during the process. That’s going to be tempting enough but add to that the prospect of them offering a significant discount on current arrangements you’re really in no-brainer territory.

Faster, more efficient, less prone to errors, and now cheaper – what’s not to like?

There may be some slight loyalty inertia to overcome. If a company has been doing business with the same accountants for many years an overnight change is unlikely. However, any residual loyalty is likely to dissipate quite quickly if the accountancy firm doesn’t take steps to catch up on its competitors.

The days when service providers could make customers pay for their inefficiencies are long gone.

The message is clear…

Accountancy firms which don’t keep pace with their clients when it comes to technology will haemorrhage business to their competitors and may not stay in business for very much longer.

Bob Cratchit may have been a likeable and wholesome fellow, but he belongs in the past with the dusty ledgers and the clunky spreadsheets. Businesses can no longer afford to pay for the inefficiency of others, nor should they be asked to.

Why leave it there?

Automate manual data entry with AutoEntry. A free trial is available for all new users. Find AutoEntry in the Xero App store or via our website

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