Bookkeepers and accountants who offer bookkeeping services will need to adapt to change in order for the role to survive, according to AccountingWEB members.
On a recent Any Answers thread, AccountingWEB member ccassociates sparked a debate when he queried the future of bookkeeping.
“One of the most startling developments I have seen over the last 20 years is how the role of bookkeeping has changed. Has anyone noticed this?” he asked.
Bookkeeping has moved from a key service offering from accountants to many more clients choosing to ‘do the books’ themselves, he surmised.
Due to technology and the increase in computer literacy among all generations, clients have become more confident about using accounting software packages themselves.
But is the ease of bookkeeping making the role redundant, and is there a place for it in the modern accounting world?
As with every area of accountancy in the changing, increasingly technological world, the message from responding members was simple: You need to adapt to survive.
Cloud accounting and cross collaboration
Many members agreed that there was indeed a place in modern accountancy for bookkeeping, but appear to offer services that perhaps a traditional bookkeeper might not have previously.
Sarah Douglas said her firm produces monthly management accounts for clients with five to seven days, and provides an ad hoc bookkeeping services for when businesses whose in-house bookkeepers struggle.
Cloud helps her team to do this, she added, as the firm uses remote access in extreme cases and is on hand via Skype to provide client support.
“It’s a pretty good money earner,” she said. “In fact, it brings us more bookkeeping work as quite a lot of our clients ask us to visit them.”
Ccassociates agreed on the use of cloud solutions to provide bookkeeping services.
“We have found that clients want to do the books themselves, but also want some hand-holding and find that cloud systems are ideal for this,” he said.
With cross collaboration comes the added bonus for clients of ‘double controls’, and many members mentioned they would never assume the bank is always correct.
Other members, such as Paul Scholes, advised accountants to change and roll with the tide, or “put your head in the sand and moan.”
“Cloud accounting has improved the work I do for my clients, and they do for me, beyond anything I could have hoped for five years ago.
“While it's reduced my fees and workload on the number crunching side, again, it's given me the opportunity to do more beneficial and enjoyable work and reduce the business to a much more comfortable level,” he said.
Bookkeepers don’t need to see cloud as a threat though, as it throws up more opportunities for expansion into areas such as management accounts and provide better, more complete information to the client and accountant at year end.
Giving clients an ‘ownership’ of their accounts through such a system gives clients and accountants a different outlook on bookkeeping, Scholes added.
“Good bookkeeping is worth its weight in gold,” said Peter Saxton, echoing other members’ protestations that bookkeeping isn’t dead due to the demand.
“Everyone’s a bookkeeper, but is it such a good thing? It requires knowledge and skills; good bookkeepers can never just be replaced by a cleverly designed spread sheet,” added Mrs Muzzy.
Using methods like cross collaboration in the cloud and providing clients with ‘ownership’ of their accounts in a limited way, provides scope for the bookkeeper to retain the prestige of their skillset.
A lack of financial acumen in businesses leaves them vulnerable in terms of having years of built up bookkeeping knowledge.
Sarahturnerbookkeeping said that while some of her clients have a “feel for numbers”, they like the comfort of having a certified bookkeeper finalise their monthly accounts.
In addition, many of her smaller company clients or sole traders don’t have time to prepare their own accounts due to the stresses of trying to run a business; a sentiment that other members echoed.
JAADAMS mentioned that some clients are even turning to further education to teach them the ways of different accounts packages.
But, Kentfunny warned, accounts packages are “dangerous in the hands of the untrained.”
Alternatively, packages such as FreeAgent are being developed that don’t require the user to have a detailed knowledge of debits and credits.
“Such packages enable businesses to do their own books without any help from trained people, these businesses don’t need bookkeepers and it’s time for our industry to wake up to that fact,” Scholes said.
“So while you and I may not want to do much of the work ourselves, being able to recommend, provide and support such systems is essential if we want to attract young businesses to use our services.”
Challenges for bookkeepers
Apart from technology, regulatory simplification has played a part in aiding clients to do their own bookkeeping.
The new cash basis accounting will simplify things further for bookkeepers and clients when it comes in, but some members are still apprehensive of the regulatory change.
“I always thought the cash scheme would mainly be of interest to people who didn’t want an accountant anyway,” Cfield said.
“It comes with many downsides including no sideways loss relief, restrictions on loan interest, miserable rates for use of home and maybe it’s better to point this out to people who listen to the political spiel and are tempted by the “simpler accounts” mantra in the hope of lower fees.”
The cash basis for VAT and SA returns also means some businesses clients no longer need sales nor purchase ledgers.
“Most businesses don’t offer credit anymore, they get payment up front or on delivery by BACs or credit card and have no use for a sales ledger,” said Ken Howard.
Scholes also added that the biggest change for accountants was the abolition of audit requirements.
“Almost overnight, the firm I was with went from 60 audits to 10. The world kept turning and freed us up to do much more beneficial and proactive work for existing and new clients.”