Running an bookkeeping firm without bookkeepers?

With the advent of bank feeds, receipt capture, autoentry has anyone estabished a workflow that.....

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With the advent of bank feeds, receipt capture, autoentry has anyone established a workflow that no longer needs bookkeepers, only accountants?
There is a slew of software applications out there promising accuracy and automation. I would be very interested in reading people's setups and experience and if the applications deliver on their time saving promises.

 

Replies (106)

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Replying to Paul Crowley:
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By atifdarr
17th Feb 2021 18:55

Yes, I was hoping the adoption of technology from the outset would help. I personally am an online marketer

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Replying to atifdarr:
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By Andy556
17th Feb 2021 19:36

If that is your plan to start an online accountancy practice then make sure you've got your practicing certificate, PII etc

Good job you're a marketer as it's a very crowded place so you'll do well to succeed

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Replying to atifdarr:
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By Mr_awol
18th Feb 2021 10:28

atifdarr wrote:

I am planning to setup an online accountancy firm.

atifdarr wrote:

Yes, I was hoping the adoption of technology from the outset would help. I personally am an online marketer

Couldn't make it up. See my post at 10.50 - https://www.accountingweb.co.uk/any-answers/outsourcing-year-end-account...

Sadly, this is common. Someone comes into a market they have no experience of, without any actual knowledge of the field, pitches low cost to the masses f0r a poor service (ironically the poorer the service, the lower the tax bill, in many cases - until HMRC open an enquiry at least, although these firms thrive on the basis of low probability of HMRC compliance checks) .

You could concentrate on refunds for uniformed workers and squaddies, but someone already beat you to it.

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Replying to atifdarr:
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By Paul Crowley
17th Feb 2021 23:11

Where would you fit in?
Technology does all the sorting out, without human intervention.

What need is there of an accountant?

Surely client just needs to buy the software from the software seller?

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Replying to atifdarr:
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By Paul Crowley
17th Feb 2021 18:39

Excel Spreadsheets.
The others are rubbish

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A Putey FACA
By Arthur Putey
17th Feb 2021 17:40

Lets face it, a lot of traditioal bookeepers time is spent keying stuff in, and we all remember the days when they visitied clients once a week or month and sat shoving stuff into Sage and doing manual bank recs. Never mind the palaver of accountants taking copies of the client's Sage and bringing back the adjustments, or not in some cases.

Behind this there is an interesting question about the roles of accounts clerks (or admin staff), bookkeepers and accountants. You can automate data capture which in turn can facilitate transaction processing to the point where the bookkeeper does becomes superflous, or perhaps more accurately the roles of the bookkeper and accountant are merged, with clients getting more involved. Very few of my Xero clients have a bookkeeper. Someone in the business raises the sales invoices and where necessary chases payment. The only reason to put Bills on Xero as such is where you want to use it as an AP for suppliers who give terms, or where you are not (and few small business are not) on VAT cash accounting. A lot of business spend is by card now, so all that is necessary is to code the bank transaction. If you want to upload a pdf of the invoice or receipt you can. Then all the accountant needs to do (if they are not doing the bank rec in any case) is check the VAT or other transaction reports to for incorrect coding.

Once more progress is made by banks (and so called challenger banks) in allowing payments to be made from the accounting system (like Xero does with Transferwise) or integrates accounting with banking (like Tide attempts to do) it will become more streamlined. The majority of transactions are not contentious, and mistakes are picked up by the reviewing accountant at VAT return time and with a further review when preparing the year end accounts .... which are also part of several cloud accounting providers' offerings.

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Replying to Arthur Putey:
John Toon
By John Toon
17th Feb 2021 18:04

Some excellent points, one issue from pedants' corner:

"A lot of business spend is by card now, so all that is necessary is to code the bank transaction."

If you have the right bank feed or the right card even this isn't necessary.

Let's also not forget the interminable development of openbanking is going to spread and develop into openfinance, maybe even openutilities or similar if you believe some of the commentary. Couple that with a potential move to digital or e-invoicing, which has happened or is happening in other countries right now and the need for raw data entry in the accounting system could be all but eliminated, with the exception of raising sales and possibly payroll, although increasingly this can be automated or pushed back to the user, with time recording, for example, captured within apps.

My feel is that in the short term the bookkeeper/accountant role moves more towards scrutineering, something we already do (VAT being mentioned above), but again increasingly being automated with tools like Xavier and Xbert to a point where you could see the human interaction being minimised. The days of a payroll clerk, purchase ledger clerk, credit control should really be numbered if they aren't already.

I haven't even touched on MTD which is now only a couple of years away...

This is not a bad thing, a few may pine for the good ol' days of big red books etc, but in reality none of us want those back and lose the opportunity of doing something better with the time we have freed up.

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Replying to johnt27:
paddle steamer
By DJKL
18th Feb 2021 13:15

Like signing on.

Lets face it , whilst some accountants will still be wanted others will be shelf stacking in Asda (though think robots will grab these jobs), the number of accountants currently available is likely to far exceed demand.

What is coming is the white collar industrial revolution, when swathes of these functions and many more will be replaced with AI that works 24/7 with no coffee breaks.

Personally if I were say in my twenties/thirties I might be considering retraining as a sparks, AI cannot climb stepladders (mind you I used to believe I was safe from Daleks as my bedroom was up a flight of stairs, I have now found out they can fly)

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By 0098087
18th Feb 2021 10:24

Every client bar one who uses online software messes it up. Only one who doesn't used to work with us 25 years ago in accountancy practice.

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Replying to 0098087:
A Putey FACA
By Arthur Putey
18th Feb 2021 10:38

The answer to that is work with your clients to help them get it right, and offer a managed service to those who are incapable (maybe that's where the bookkeeper comes in).

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By tom123
18th Feb 2021 10:49

If I were setting up an accountancy/bookkeeping firm from scratch, I would choose to only work with people who were committed to using online software.

I accept that might be a niche position, but it would give me a common starting point for each client.

And, rightly or wrongly, you would have a TB of sorts to work with.

However, I am often reminded of the adage to not contract out your key competence. If you don't really add much value then it won't be long before your place in the chain gets wiped out.

Computers are getting better than humans at diagnosing tumours from Xrays, so things will improve.

OP - when you say online accounting firm, what value are you proposing to add?

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Replying to tom123:
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By johnjenkins
18th Feb 2021 11:27

The idea of on-line Accounting in "the cloud" with bank streaming etc. comes from HMRC wanting to do away with the small Accountant. We use VT a lot and any Accounting package is not to different to cash book analysis (depending how big the business is). HMRC wrongly thought or were miss sold the idea that all business had to do was press a few buttons and hey presto dinner for two. Hence MTD. Yes, some can but the majority haven't a clue. RTB will never happen.

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Replying to johnjenkins:
A Putey FACA
By Arthur Putey
18th Feb 2021 12:40

No it doesn't, its just progress being enabled by technology.

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Replying to tom123:
A Putey FACA
By Arthur Putey
18th Feb 2021 12:31

tom123 wrote:

If I were setting up an accountancy/bookkeeping firm from scratch, I would choose to only work with people who were committed

I think I've already achieved that!

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Replying to tom123:
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By atifdarr
18th Feb 2021 12:43

Yes, I only plan to target tech savvy users as they fit my ideal client persona. In answer to your question I don't intend to ADD value. I intend to offer VALUE as the product.

I know you guys are highly skilled and experienced in what you do and you bring many years of knowledge and expertise to the table. But speaking as a micro-business owner for over 35 years we just want our accounts done as cheaply as possible as we see it as a distraction and expense. It's all about compliance for us, especially if you are hardly making a profit.

Now, you can post replies and explain to me on this forum how much value you add, but do you have this opportunity in the real-world? I mean really being able to convince your clients and demonstrate how much you can save them in tax as opposed to the fees you will charge. I am guessing the answer is very rarely.

Therefore, I am working on the assumption that there is low hanging fruit; people who just want the job done at the lowest price, with minimum fuss. I am assuming the "low nett worth" individuals who have to comply and it is just not financially viable for them to get accountants to pour over their books to save them less than the accountant would charge?

Really sorry to ruffle your feathers, not my intention especially when I am the only non-accountant in the room! Let the sparks fly!

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Replying to atifdarr:
A Putey FACA
By Arthur Putey
18th Feb 2021 12:55

Sounds like the same mentality as those who give discounts for cash, put second hand tyres on their car and do their own dentistry. There is nothing to stop you doing your own accounts and tax for free, other than the cost of your time. If you want to do it on the cheap there are already adverts for £99 tax returns and £199 accounts, done in India or the Phillipines (or from a lock up shop in Bolton (no offence Bolton just chose you at random)). You are probably correct, all an accountant can do for you is compliance.

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Replying to Arthur Putey:
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By atifdarr
18th Feb 2021 13:00

But for many soletraders and micro businesses, isn't that all that is required? compliance?

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Red Leader
By Red Leader
18th Feb 2021 11:46

To the OP: as a marketing person, you are ideally qualified to be an accountancy marketing guru. Remember, money was made in the gold fields by selling to the miners, not by the miners themselves.

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Replying to Red Leader:
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By Andy556
18th Feb 2021 11:54

That's true but he wants to set up an online accountancy firm.

Marketing the accountancy firm would be fine as long as there are qualified staff to do the work and I assume he would need a business partner with the right licences to be able to open an accountancy firm.

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Replying to Andy556:
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By atifdarr
18th Feb 2021 12:22

Hi, its my understanding that there is no requirement for licenses to open an accountancy firm.

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Replying to atifdarr:
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By Andy556
18th Feb 2021 12:36

Just wow

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Replying to atifdarr:
A Putey FACA
By Arthur Putey
18th Feb 2021 12:37

Correct, apart from AML supervision, so once you get going don't foget to come back here looking for free advice every time something you don't understand comes up.

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Replying to Arthur Putey:
Red Leader
By Red Leader
18th Feb 2021 12:57

The small matter of AML supervision ...

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Replying to Red Leader:
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By atifdarr
18th Feb 2021 12:24

I have worked all my business life selling on eBay and Amazon, it was only ebay and Amazon getting rich!

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Replying to atifdarr:
A Putey FACA
By Arthur Putey
18th Feb 2021 12:33

must have been something wrong with your business model then, which bodes well .........

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Replying to Arthur Putey:
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By atifdarr
18th Feb 2021 12:48

Yes, unfortunately I followed in my father's footsteps into the Islamic products market - which is obviously very niche - had I gone online with any other business in 2001 as I did I would have sold the business 10 years later for £6m. As it was I worked at it for 20 years and turned over £6m, but had a healthy product margin as I only ever employed 1 other person and most of the goods were high margin and imported. Anyway most businesses have a natural lifecycle.

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Replying to atifdarr:
A Putey FACA
By Arthur Putey
18th Feb 2021 12:58

Accountancy is probably past the peak of its lifecycle! So you might want to look at alternatives. Why not open an estate agency, licence to print money they are. All you need is a camera and someone who can knock up an EPC rating.

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Replying to Arthur Putey:
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By atifdarr
18th Feb 2021 13:02

I think the reason is probably because there is no Rightmove or Amazon in the accounting industry.

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Replying to atifdarr:
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By NewACA
18th Feb 2021 17:46

Yes, there is, its called Xero, or Sage or QB. They make all the real money, for all the thousands of bookkeepers fighting over a small number of clients and low-balling each other. It is easier to make a profit on Amazon, at least you can choose niche products that have high margins. Basic Compliance bookkeeping ALWAYS has low margins: small pool of clients, too many bookkeepers.

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Replying to Arthur Putey:
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By DaveyJonesLocker
18th Feb 2021 13:37

Lettings agency is even better. For my last check they got ME to go around my house shooting a video. Whilst no doubt charging my landlord a nice fee.

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Replying to atifdarr:
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By NewACA
18th Feb 2021 12:47

Likewise, using Xero, QB, Autoentry etc (as many others already do, for a pittance income), will only make Xero, QB and Sage rich. To get rich yourself, you'd need to do something unusual, like invent your own bookkeeping system that does exactly what you are looking here for - as no one else has yet done it. Otherwise, you are only using software that thousands of others are doing and making little real money: bookkeeping doesn't make much of any money: ask a bookkeeper who runs their own practice how much they get paid, and many of them would be better of being employed elsewhere, but just enjoy the idea of being their own boss or being a mum working from their bedroom in charge of their own time. Niche highly experienced and highly qualified accountants get paid a lot, upwards from £100k profit as a starting point, but it doesn't seem you want to go down that route. Businesses don't mind paying an adviser lots of money to save tax, or re-structure their business, or help them get a large bank loan or investor, it makes and saves the business thousands, so don't mind paying a lot for that. Bookkeeping is just admin task that business owners don't want to pay much for.

Selling on Amazon is largely a mugs game, as all the vendors are trying to out do each other on the lowest price. The problem is exactly the same for a bookkeeping service that doesn't provide consultancy/advice or deal with more complicated accounting issues: you'll just drown in the sea of "race to the bottom" bookkeeping fees. A lot of bookkeeping is now outsourced to India (about 50% of firms do that I imagine), if you want to compete with that, getting paid less than £10 a hour that doesn't pay for the other costs, feel free to go ahead!!

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Replying to NewACA:
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By atifdarr
18th Feb 2021 12:51

Yes, I have good contacts with overseas accountants, but my goal would be to grow the client base aggressively, upsell services if possible, but ultimately exit.

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Kevin Lord
By Kevin Lord
18th Feb 2021 12:46

At FreeAgent we treasure our relationships with our ever-growing bookkeeper partners. Our role is to simply provide them with their clients' data more quickly and easily so they can concentrate on what matters to them most - being there for their clients.

With so much growth in the bookkeeping industry over the last year or so it seems clear that the future is looking bright for bookkeepers! I'll actually be discussing this at a panel event on Friday 12th March as part of our Bookkeeper Boost Week - feel free to come along!

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Replying to Kevin Lord:
A Putey FACA
By Arthur Putey
18th Feb 2021 13:00

Wondered when the self promotion would start

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By North East Accountant
18th Feb 2021 12:46

Client - my books are great this year I've taken photos of my receipts and it's posted it straight into the software I got called SHITA (pronounced "She- Ta").

Accountant - did you reconcile the bank?

Client - I set up the bank feed and it was amazing as it brought all transactions in, well most of them and I got it to balance.

Accountant - how did you do that?

Client - it was easy I don't know why you Accountants make such a fuss. I looked at my bank statement and whatever the books said I put in an entry to make it agree to what was on the bank statement. Doodle.... oh and will you reduce my fee.

As we all know SHITA (pronounced She-Ta) stands for Should Have Instructed a Tax Agent.

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Replying to North East Accountant:
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By atifdarr
18th Feb 2021 12:54

Lol!

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Replying to North East Accountant:
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By DaveyJonesLocker
18th Feb 2021 13:42

Also Client - why is your P&L different to my CrapBooks one?

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Replying to North East Accountant:
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By Southwestbeancounter
18th Feb 2021 13:50

Superb and so darn true too!

Usually when I ask 'did you reconcile the bank' they ask 'what's that?'!!

These TV adverts for SHITA (LOL!) and the like are so annoying - often fronted by bloomin' comedians - what the heck they know about accounting software is anyone's business - just want a nice fat pay cheque funded by the 'mugs' who believe the adverts I guess!!

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Replying to Southwestbeancounter:
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By Happyjot2
18th Feb 2021 15:47

Not only are they annoying, I think they are misleading to imply VAT & Self- Assessment returns are "Done"

Yes they can be done - but- only if the user knows what they are doing.
Bookkeepers do- clients dont.
These Ads should carry a "Financial Risk" warning

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Replying to Southwestbeancounter:
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By Happyjot2
18th Feb 2021 15:48

Not only are they annoying, I think they are misleading to imply VAT & Self- Assessment returns are "Done"

Yes they can be done - but- only if the user knows what they are doing.
Bookkeepers do- clients dont.
These Ads should carry a "Financial Risk" warning

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Replying to Southwestbeancounter:
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By Happyjot2
18th Feb 2021 15:48

Not only are they annoying, I think they are misleading to imply VAT & Self- Assessment returns are "Done"

Yes they can be done - but- only if the user knows what they are doing.
Bookkeepers do- clients dont.
These Ads should carry a "Financial Risk" warning

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Replying to Southwestbeancounter:
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By NewACA
18th Feb 2021 17:42

That's American marketing tactics for you (aka "American Dream" to rip people off), that's how it works over there. Tell them whatever it is you think they want hear, and then that will do.

Perhaps we should all make complaints to the Advertising Standards Agency?

I've noticed that Xero has now started with the same line as well (a robot will do it all for you - apparently!), feeling they have to copy their American US competitor...

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Replying to NewACA:
Red Leader
By Red Leader
19th Feb 2021 12:08

You just take a photo of your Starbucks latte receipt and job's a good un!

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Replying to Red Leader:
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By cbp99
01st Sep 2021 12:45

Remember to pass it around your friends so they can claim as well.

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By Rgab1947
18th Feb 2021 16:29

I find that the AI software creates its own unique errors for me to fix. Things like;

* Bank feed missing dates - requires monthly recons
* Downloaded entries coded to what the software thinks it is but its wrong.
* Specifically Amazon so a dozen entries saying Amazon, yes but what nominal code
* OCR not realising HMRC has PAYE/CT/VAT accounts in the ledger and just reading HMRC and just allocation to a catch-all account
* Software developers making the software do something they think is correct and it makes a recon a nightmare. Here I specifically pick out QuickBooks with their strange way of allocating VAT payments and payroll payments

Etc.
I can only wish for the new software not making errors but they do.

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By DaveyJonesLocker
19th Feb 2021 08:53

This is starting to read like a failed Dragons Den pitch

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By Paul Crowley
19th Feb 2021 09:40
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Replying to Paul Crowley:
A Putey FACA
By Arthur Putey
19th Feb 2021 11:48

Piece of cake. Provide a ledger type platform so SA transactions are captured by date, type and tax return section. I bet Sage could easily add this to Personal Tax Onlline. TaxScout will probably add it to their £119 offering.

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Replying to Arthur Putey:
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By Paul Crowley
19th Feb 2021 11:56

Separate filing for the 2 parties that rent out BTL properties
Different dates to trading
Partnership splits

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Replying to Paul Crowley:
A Putey FACA
By Arthur Putey
19th Feb 2021 12:27

Nothing new there. Build a link based on the check box for jointly let property .... better shut up, someone might nick my ideas!

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