From XU Magazine, 
Issue 16

The three C’s of surviving the bookkeeping revolution

To the outside world, bookkeeping may seem an unlikely industry in which to find ‘a revolution’. However, this won’t be news if you’re a regular XU reader. So much has changed in the last decade...

Modern bookkeeping is now unrecognisable from the days in which businesses would give their accountant a shoebox of physical receipts once a year – although sadly, this isn’t completely unheard of today either.

Despite undoubted progress, many bookkeepers are still nowhere near maximising the full potential of the revolution happening in their industry, even bookkeepers who use Xero, which puts them way ahead of the pack. Using Xero is a great starting point from which to do more – to give clients an even better service, to make more money through advisory and to position themselves as a trusted advisor who can anticipate needs and wants before being asked. There are many bookkeepers who will become a victim of the revolution if they don’t adopt this mindset and instead let complacency set in. So how do bookkeepers stay ahead of such a fast moving revolution? For me, it all boils down to the three C’s: cloud+, counsel and cash.

Cloud+

The adoption of cloud services has transformed accounting and bookkeeping over the past 5 years.So much so that Cloud vs Desktop software isn’t even a relevant debate. It’s no longer a competitive advantage, but what people have come to expect.

Bookkeeping software has been a huge part of this change, and that’s been made possible by the advancement of text recognition software (and the fact that everyone has a camera on their

smartphone). Tools like ReceiptBank and AutoEntry have led the way by becoming platforms that all bookkeeping can be managed from. With more and more invoices being sent via email, it’s easier than ever to forward them on to the bookkeeping software of choice. And with Xero recently adding this functionality to their software, these services are just going to keep getting better.

The next step for bookkeepers is to clearly define their arsenal of tools they can rely on to give their clients the level of service they need. A tech stack is the web-equivalent of a smartphone screen, with each app having its own place and purpose. Have you properly explored the benefits of using services like HubDoc, Expensify, Pleo, Expend or Curve? Are you in a place where you can confidently tell your clients that you are moving on from old tools and invite them to come with you?

Counsel

This notion of inviting clients to join you in the use of new tools and applications is more than just a pleasantry. You may think that clients will be resistant to change, and some will be. But for many, it’s the exact opposite. There’s nothing progressive businesses like less than thinking that they are not getting the best and most up-to-date service possible – even if that means venturing into the unknown. They’ve put their trust in you as their advisor and you don’t want them thinking that they are missing out on better advice. If you don’t offer new options and show that you are adapting with the times, you’re paving the way for another bookkeeper to step in and do so. It’s as simple as that.

Bookkeepers need to think like market researchers or startups; to speak to their customers, ask them what they really want and show them what’s possible, using the new tools available.

Cash

When showing a small business what’s possible, there’s often only one financial metric that they really care about: cash flow.

Early-stage businesses need to know, in granular detail, what their cash flow looks like at any given moment – when money is going in/out, where, why and how. Only then can they plan for the future and grow their business through investment, or weather the storm during tougher times.

Businesses need their bookkeepers to help them make this a reality. Business owners are looking for integrated solutions and real-time reporting. They’re looking for accountants and bookkeepers who really understand technology and how to deploy it effectively. They need trusted advisors to educate them on what an efficient system looks like. They need to introduce bookkeeping practices that can make their financial processes run smoothly, with one source of truth for complete visibility on their cash flow.

Solid bookkeeping is the cornerstone of any business’ financial data. If they don’t have up-to-date data to make decisions on, they’re unable to take advantage of all that the cloud revolution brings. This has been a sticking point for some time, since financial reporting has historically been either timely or accurate, never both.

Leading the charge

We’re long past the point at which utilising the cloud was optional, the revolution is here and with it is an incredible opportunity for bookkeepers to lead the charge. If they don’t they’ll be left behind.

In summary, my advice to bookkeepers is to rethink the services you are offering, starting with understanding what kind of services your clients really need (without waiting for them to ask). Then identifying the software tools that can help make this a reality and use the output to provide insight, which will make you an invaluable part of their team.  

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