Remote access the real driver for cloud uptake, says ICB
Bookkeepers must keep up with technology.
Bookkeepers, working at the coalface of many small and medium businesses, are sitting much closer to the sweeping changes brought about by cloud software. As discussed several times on BoxFreeIT, the bookkeeping industry is undergoing its own transformation as cloud accounting tools make it easier to perform lower value data entry tasks.
It’s evident that the change in bookkeeping is happening at a faster rate than in the wider accounting profession. BoxFreeIT had a long discussion with Matthew Addison, CEO of the Institute of Certified Bookkeepers, about how the industry association is working to keep its bookkeepers informed and prepared to succeed in a world of automated bank reconciliations and bank feeds.
Readers might also be interested in an interview with the bookkeeping association Accounting Technicians of Australia on a similar topic and yesterday’s story on how bookkeepers can move from hourly rates to fixed-fee services.
BoxFreeIT: Do you agree with comments from some accountants that bookkeeping is dead?
Matthew Addison: I’m not a fan of this “bookkeeping is dead because technology replaces it”. It’s just wrong. It’s a total misunderstanding of what bookkeepers do. Our view is that bookkeepers are typically about assiting businesses doing the business.
If they’re doing a bank reconciliation in today’s world, they should be considering software that makes it quicker. Doing a bank rec, tick and flick, it can be routine. We don’t believe good bookkeepers actually want to do that manually, we’re doing the business. We’re doing payroll, we’re looking after the people. We’re doing the sales, we’re helping the business generating the income.
Some bookkeepers are paranoid that ‘technology is going to cost me my job because I’m not ticking off every item on the bank statement.’ Our view is, guys, somebody is going to do it (use software to automate and speed up the tick and flick). Somebody is going to approach your client and say I can automate the bank rec.
Now, as the existing bookkeeper with knowledge of that business, you are in the best position to automate it properly. What happens next month? You might take less time.
Has the client got the same value delivery? Absolutely. So let’s talk about outcomes. What outcome is the client getting? Now you can deliver more outcomes and you’ve got some more time on your hand. Think about the next outcome improvement.
BoxFreeIT: What about this opportunity for bookkeepers to improve their clients’ businesses by recommending cloud software?
Addison: I don’t particularly like the term “business improvement”. The other term people bandy around is business development or business coaching, all of which have been overmarketed or oversold.
In every newsletter we produce we’re talking about how bookkeeping could be structured or the best process a business should follow. So yes it’s all about business improvement for the bookkeepers but also how should they do their client’s business better? How should they be record keeping assets and depreciation according to current law?
BoxFreeIT: What will be the cloud’s biggest impact?
Addison: The real paradigm shift that is going to happen in bookkeeping, business and accounting is the remote access that cloud can bring. We have had remote access for years, it’s all there but it’s all hard and expensive.
In my past life in my accounting practice I put the $45,000 servers in, the terminal server and exchange servers and hosted our own systems, to give us the remote accessibility and the multi-user environments in everything I need. Today, you’d turn three cloud apps on. We’re just in a better space.
BoxFreeIT: So you think businesses will drive accountants to use the cloud?
Addison: Yes. The clients will pick up new software because they heard it from somewhere. They’ll whack it in the cloud and say to the accountants, ‘I’m not sending you a disk anymore, just access it.’ I think that’s a paradigm shift.
BoxFreeIT: But there are two areas in IT that are now available to businesses – integration and optimising workflows. Could bookkeepers do this?
Addison: Everything you’ve said is part of doing business. I don’t think cloud itself is a wonderful new paradigm. I reckon we’ve had technology improving the business process for 20 years. I look at Xero as a recent comer but if you look at MYOB’s journey or Reckon’s journey from producing a profit and loss balance sheet to now integrate with everything, that’s been a 20-year journey. We just happen to now be at a spot where the internet has opened up a better way to do this.
BoxFreeIT: Let’s accept that the accounting profession is going to change to some degree with cloud accounting. What is the ICB doing with bookkeepers to prepare them for that transition to a more automated accounting environment?
Addison: Right at the moment we’re at the next step of progressing the bookkeeping interaction via remote access. From 2006 (our founding year) to now there’s been a couple of iterations of that progression. In terms of the MYOB AccountRight space: We are just releasing a whole lot of resources about what MYOB’s “Live” means for a bookkeeper and engaging the accountant in that remote access.
We have also looked at browser-based solutions such as Xero: As best practice for a bookkeeper; we have advised and are continuing to build resources around what we think you need on a browser-only solution? For example, where are your business records? If you stop paying and the business records are lost on a browser-based server, it’s not a good answer for anybody.
Xero has a workable answer that we believe needs to be known. What if the tax office comes knocking any time in the next five years, where are your ultimate business records?
I like where the cloud is going in terms of the backup routines. Be it, for instance, Xero’s own in-built redundancy and backup system which is far more comprehensive and complex than a client would be able to do on their own machines.
But our question is, what is the best model for every business in that environment? So we are aiming to inform bookkeepers on what’s happening, on what cloud means, and what the best business processes are with the different versions of accounting software in the cloud.
BoxFreeIT: How do you make this big jump to the cloud happen faster?
Addison: Through education of the solutions for the end user: How will it affect you? Why is this an improved process? I think of one client who is a very dynamic, very proactive entrepreneur in terms of their industry but getting them to use internet banking was a major hurdle. Getting them to use electronic payments was a major hurdle.
So you have businesses way out there in terms of their industry and what they know, but they’re not doing anything risky with their accounts.
BoxFreeIT: What are the next outcome improvements you can see? How can bookkeepers increase their value?
Addison: I think it becomes far more about how we interact with our suppliers. How is that record keeping happening? How is the processing happening? How do we interact with our customers? What documentation are we sending out? When are we sending it out? Should it be more electronic?
Some of the software developers are more advanced than others in terms of electronic ordering to electronic purchasing, it’s all there. Getting government to accept some of the technology improvements and how to accept that technology improvement means a business’ records are going to look a bit different.
BoxFreeIT: Is there any sense of urgency among your members needing to move on?
Addison: I don’t think there’s a sense of urgency. There’s no trigger to make the sense of urgency. In our conference this year I spent half an hour working on the competitive space and that they need to know what is the best technology and the best business process, because if they’re not taking it to their clients and employees then somebody else will.