Second post from me (Michael Wood, co-founder of Receipt Bank).
As the original post stated we are indeed experimenting with new pricing. The background to this is explained on our blog (sorry - can't work out how to link directly!) but I'm happy to give more detail here.
When we started out (in 2010) cloud accounting was still new and automated data extraction was very exotic! Today, cloud accounting is the norm, automated data extraction is becoming routine and the next round of technology changes are almost upon us.
Given this situation we have been hearing from more and more of our partners that they would like two things:
- to fix their costs (so they can deliver fixed fee services with confidence), and
- to make it more affordable to move all their clients onto automated workflows (so that they can have a single workflow within their firm).
At the same time, the investments we have been making in AI over the past 3 years have reduced our costs which have given us more flexibility in pricing than we had in the past.
We are currently experimenting with new pricing but we believe that our new offers are good value. If an average firm has 100 clients then £200 would mean it costs £2 / client / month and 4p per item. (I appreciate that some firms have fewer clients and some have more - £200 is not the price for all firms).
My name is Michael Wood and I am the co-founder of Receipt Bank.
Given that RB is the topic here I thought it would be useful to jump in on this forum. If I may, I'll post two posts. The first - to respond to some of the points made here and the second - to discuss the new pricing and why we are doing it.
We try very hard at Receipt Bank to be a good partner of, and supplier to, accounting and bookkeeping firms. From day 1 firms have been the core of our business and are the reason we exist.
As many of you are also business owners I know that you will understand the upset that you feel if your firm has missed the mark somewhere. If you feel that you have had a bad experience with us then, firstly, I am very sorry and secondly, please do let me know so that I can fix it - my email address is [email protected].
At RB we are very passionate about what we do. We believe that our technology can help firms to thrive and we encourage our team to communicate this. I apologise if this does not always come across as we intend.
I am sitting down with some of the team tomorrow to understand how we can improve...
I agree. Also, what happens if the client decides to switch cloud providers? Presumably they lose all access to historical data in the first provider. Another big worry for me is the security of the data. You have no idea where in the world the servers are that hold the data or how robust the security measures are of the cloud provider. Could they be hacked (see the current news story about an adultery website being hacked)? It seems that not many systems are secure if the bad guys want to access them!
There are two issues here: moving providers and security.
Moving providers is now easily solved as there are a number of services and softwares out there that enable you to move data from one provider to another. This happens much more easily and quickly than is possible with desktop software!
Security can also easily be answered. It is true that hacking and other security breaches do occur but it is also true that burglaries and other theft of local data occur. The reality is that the data is more secure in the cloud than it is on the PC in your office. It is also true that all clients' key data is already in the cloud! Online banking, HMRC online portals, Companies House online portals and other sources mean that all clients' data is already in the cloud. The question for a firm today is just whether to take advantage of the efficiencies that the cloud delivers or whether to incur the extra costs that desktop software incurs (and charge clients more and feel the reduced profitability).
No-one has mentioned the major downside of cloud accounting, and that is what happens if the cloud company goes bust. Oops - total loss of data! This has happened to me twice, so beware.
Hi Colin - with a quality provider this should not be possible. Instead arrangements are in place so that if the company gets into financial difficulties the service and the data remain available for sufficient time to enable all clients to export their data and migrate to another solution.
"There is going to be more "cloud accounting" in the future."
Peter Saxton above had it right: "There is going to be more "cloud accounting" in the future."
If anything this is a very conservative statement. Cloud accounting reduces the cost base of accounting firms & provides a much better service to the client. All quality firms will be primarily using cloud accounting within 3 years. The nature of the service provided by each firm will continue to be different: some will differentiate on price (as in the original example), some will differentiate on quality and some will differentiate on specialty.
Disclosure - I work for Receipt Bank which is part of the cloud accounting industry which means I have had the privilege of seeing how many of the best firms have already moved and the rate at which clients are voting with their feet.
Can I ask why you felt the cost was huge? Most firms are able to bear these costs (because the value is significantly higher than the cost) therefore I fear that there might be another issue that is causing you to have to look harder for a solution in this area than you need to.
Technology is changing bookkeeping from data entry to data management but this doesn't change clients' need for bookkeeping help.
In 2015, when so many firms are using all the new technologies to reduce their cost base, it would be a bad idea to hire more people for tasks that technology can do - you will just be inviting fee pressure onto yourself.
The best way to tell clients is to change your pricing model. The reason that the best firms have moved to fixed fee pricing is that they can see that there is steady stream of productivity-enhancing technology coming in the next few years and a firm has a simple choice:
charge per hour and NOT adopt new tech = increasing fee pressure and client losscharge per hour and adopt new tech = high client retention but falling revenue per client every yearmove to fixed fee pricing = high client retention and stable revenue per client
Although the choice is simple, making the change can be hard (I've worked in firms - I know!). If you would like Receipt Bank to help you with this then do feel free to contact us on 020 3699 5006. We can help you deploy our technology to improve your margins but also help you with our experience of how other firms have tackled the issues you are facing.
I love cake and all kinds of chocolates, treats, etc. When I started RB I wanted to make this part of our culture and it now is! Everyone has to bake when they join RB, on their work anniversary, etc. So everyone who works for RB also really loves cakes, chocolates, etc.
And we like to share this... It became part of our marketing because I have helped to build an accountancy practice and I know how busy everyone in a firm is. I also know that cloud accounting and the automation that services like RB provide is going to be essential for any firm that wants to survive and thrive in the future. Therefore I asked our team to think of ways to get the attention of firms so that we can assist them, but ways that reflect RB and its culture - hence the KitKats!
My answers
Second post from me (Michael Wood, co-founder of Receipt Bank).
As the original post stated we are indeed experimenting with new pricing. The background to this is explained on our blog (sorry - can't work out how to link directly!) but I'm happy to give more detail here.
When we started out (in 2010) cloud accounting was still new and automated data extraction was very exotic! Today, cloud accounting is the norm, automated data extraction is becoming routine and the next round of technology changes are almost upon us.
Given this situation we have been hearing from more and more of our partners that they would like two things:
- to fix their costs (so they can deliver fixed fee services with confidence), and
- to make it more affordable to move all their clients onto automated workflows (so that they can have a single workflow within their firm).
At the same time, the investments we have been making in AI over the past 3 years have reduced our costs which have given us more flexibility in pricing than we had in the past.
We are currently experimenting with new pricing but we believe that our new offers are good value. If an average firm has 100 clients then £200 would mean it costs £2 / client / month and 4p per item. (I appreciate that some firms have fewer clients and some have more - £200 is not the price for all firms).
Hope this helps shed some light.
Michael
Hi,
My name is Michael Wood and I am the co-founder of Receipt Bank.
Given that RB is the topic here I thought it would be useful to jump in on this forum. If I may, I'll post two posts. The first - to respond to some of the points made here and the second - to discuss the new pricing and why we are doing it.
We try very hard at Receipt Bank to be a good partner of, and supplier to, accounting and bookkeeping firms. From day 1 firms have been the core of our business and are the reason we exist.
As many of you are also business owners I know that you will understand the upset that you feel if your firm has missed the mark somewhere. If you feel that you have had a bad experience with us then, firstly, I am very sorry and secondly, please do let me know so that I can fix it - my email address is [email protected].
At RB we are very passionate about what we do. We believe that our technology can help firms to thrive and we encourage our team to communicate this. I apologise if this does not always come across as we intend.
I am sitting down with some of the team tomorrow to understand how we can improve...
Michael
Hi,
Could you pls outline how you would like / think this should work?
Thanks,
Michael
Migration & Security
There are two issues here: moving providers and security.
Moving providers is now easily solved as there are a number of services and softwares out there that enable you to move data from one provider to another. This happens much more easily and quickly than is possible with desktop software!
Security can also easily be answered. It is true that hacking and other security breaches do occur but it is also true that burglaries and other theft of local data occur. The reality is that the data is more secure in the cloud than it is on the PC in your office. It is also true that all clients' key data is already in the cloud! Online banking, HMRC online portals, Companies House online portals and other sources mean that all clients' data is already in the cloud. The question for a firm today is just whether to take advantage of the efficiencies that the cloud delivers or whether to incur the extra costs that desktop software incurs (and charge clients more and feel the reduced profitability).
Hope that helps.
Regards,
Michael
Downsides
Hi Colin - with a quality provider this should not be possible. Instead arrangements are in place so that if the company gets into financial difficulties the service and the data remain available for sufficient time to enable all clients to export their data and migrate to another solution.
Regards,
Michael
"There is going to be more "cloud accounting" in the future."
Peter Saxton above had it right: "There is going to be more "cloud accounting" in the future."
If anything this is a very conservative statement. Cloud accounting reduces the cost base of accounting firms & provides a much better service to the client. All quality firms will be primarily using cloud accounting within 3 years. The nature of the service provided by each firm will continue to be different: some will differentiate on price (as in the original example), some will differentiate on quality and some will differentiate on specialty.
Disclosure - I work for Receipt Bank which is part of the cloud accounting industry which means I have had the privilege of seeing how many of the best firms have already moved and the rate at which clients are voting with their feet.
"Huge Costs"
Can I ask why you felt the cost was huge? Most firms are able to bear these costs (because the value is significantly higher than the cost) therefore I fear that there might be another issue that is causing you to have to look harder for a solution in this area than you need to.
Fixed fees
Hi,
(Michael from Receipt Bank here.)
Technology is changing bookkeeping from data entry to data management but this doesn't change clients' need for bookkeeping help.
In 2015, when so many firms are using all the new technologies to reduce their cost base, it would be a bad idea to hire more people for tasks that technology can do - you will just be inviting fee pressure onto yourself.
The best way to tell clients is to change your pricing model. The reason that the best firms have moved to fixed fee pricing is that they can see that there is steady stream of productivity-enhancing technology coming in the next few years and a firm has a simple choice:
charge per hour and NOT adopt new tech = increasing fee pressure and client losscharge per hour and adopt new tech = high client retention but falling revenue per client every yearmove to fixed fee pricing = high client retention and stable revenue per client
Although the choice is simple, making the change can be hard (I've worked in firms - I know!). If you would like Receipt Bank to help you with this then do feel free to contact us on 020 3699 5006. We can help you deploy our technology to improve your margins but also help you with our experience of how other firms have tackled the issues you are facing.
I hope that's useful.
Michael
Agreed!
I do!
This is absolutely my fault!
I love cake and all kinds of chocolates, treats, etc. When I started RB I wanted to make this part of our culture and it now is! Everyone has to bake when they join RB, on their work anniversary, etc. So everyone who works for RB also really loves cakes, chocolates, etc.
And we like to share this... It became part of our marketing because I have helped to build an accountancy practice and I know how busy everyone in a firm is. I also know that cloud accounting and the automation that services like RB provide is going to be essential for any firm that wants to survive and thrive in the future. Therefore I asked our team to think of ways to get the attention of firms so that we can assist them, but ways that reflect RB and its culture - hence the KitKats!
Apologies if you didn't enjoy...
Michael