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The threat to bookkeepers: Fact or fiction?

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1st May 2015
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Eighteen months ago, the opening lines of a very thought provoking article by Rachael Power said, Bookkeepers and accountants who offer bookkeeping services will need to adapt to change in order for the role to survive. This post generated much discussion, however according to many the statement remains true in 2015.

The article was as a result of the post Is Bookkeeping Dying which, for me, sounds more ‘half empty’ than ‘half full’, optimistic approach to the future. So I was intrigued to understand the current thoughts in the profession. 

My early discussions indicated many bookkeepers only saw the threats to their livelihood. However, as my investigations continued I found the majority know the opportunities that exist today while also being aware of the realistic threats.

I have profiled the behavioural style of many bookkeepers in the past. The results indicate a strong pattern suggesting the core behaviours are steady and compliant, reliable individuals. However an underlying characteristic of someone demonstrating these behavioural preferences is that they fear change. Therefore perhaps considering the threats more than the opportunities.

The main threat referenced was around technology. There is a strong feeling that desktop software will stagnate and no longer be developed or supported in the long term. I found that some bookkeepers were resistant to change, such as refusing to consider cloud based software or the potential collaboration with other financial service providers.

At the same time the client expectations are changing and might differ from a bookkeeper’s traditional offering.

Having attended a number of roadshows, seminars and conferences in the last six months, I was surprised that each event only had a handful of bookkeepers in attendance, compared to accountants. However listening to those bookkeepers, they are embracing the opportunity to learn, diversify and offer more added value services. This is a positive strategy to cope with such threats, instead of facing the very real risk of being left behind by their competitors.

Technology is also being linked to the threat on a bookkeeper’s potential income. Traditionally many bookkeepers charge on an hourly rate basis, so the fear is very realistic. Many can only see income falling with the technology driving efficiencies for the bookkeeping or making it easier for the business owner to undertake some of the work themselves. However there is much interest in the profession right now around value pricing and pricing models using fixed retained rates, which bookkeepers are finding is protecting their current level of income.

So is there a threat to the demand for bookkeeping services? Is there a declining need for a bookkeeper? Certainly some micro-business owners are looking to do more themselves and are finding it easier to do so. Some feel this is in part driven by the accountant or the sales messages of some software providers.  We are also seeing other professional service providers packaging the bookkeeping with their other services for one fixed price.

But there are still many opportunities and bookkeeping doesn’t need to suffer. The bookkeepers just need to know their market and attract the clients that value their skilled contribution.

I strongly feel that together as a profession, starting with each and every bookkeeper, it is imperative to understand and communicate the true value of using a qualified bookkeeper.

As bookkeeping practices grow, there is also the threat faced by some accountancy firms. With trainees today embracing everything about the cloud then who are tomorrow’s workforce likely to choose. Will it be the traditional practice using a software package they have potentially not seen or a practice compatible with cloud based solutions?

I encourage bookkeepers to embrace the opportunities and protect themselves from the threats. There are potential changes to the financial reporting standards, auto enrolment and the collaboration with clients, which all offer opportunities to be grasped.

Bookkeepers that focus their continual professional development will understand the threats but will embrace the opportunities. With their clients under attack more than ever they are more likely to retain their existing relationship based clients whilst attracting new business in the future. They will grow or, at least, survive.

Mike Foster is founder and director of The Entrepreneurs Mentor.

Replies (5)

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Teignmouth
By Paul Scholes
01st May 2015 18:35

Good article

To answer the question, yes, bookkeeping is still required but now it's more about who does it and with cloud accounting the role can be split properly between the client and the bookkeeper/accountant, which might mean either doing 5% or 95%

As far as bookkeepers remaining bookkeepers is concerned the natural progression is for them to develop new skills with the time saved from not doing all the bookkeeping and to illustrate this have a look at the ICB's qualification page

The march of technology has done the same to the traditional accountant's role over recent years enabling me to get away from bloody numbers all day!

Thanks (1)
Sarah Douglas - HouseTree Business Ltd
By sarah douglas
04th May 2015 15:47

no Shortage of work

Hi 

From my experience in Glasgow there is no shortage of work.  In fact the opposite as the ICB branch leader for Glasgow there is too much work and not enough qualified with experience and I stress experience.  The members with a lot of experience and qualifications are overloaded in Glasgow,Edinburgh and Aberdeen reports the same.   You get what you pay for when it comes to a bookkeeper.   

Yes members charge by hour but many use all methods of charging mix and match at the same time and make sure it suits the client and the bookkeeper.   Not all clients want fixed pricing our value added pricing.  At the end of the day as long long as they get paid and their is a strong relationship and trust between  the two parties that is the most important issue. 

The main point for me is that all advisor's consultants , accountants , bookkeepers all work together for the benefit of the client.  From my experience clients want professionals to work together and really do not like when they don,t.  

In relation to conferences there are two many and to be quite frank not all of them are worth going . They all have snippets for example I really enjoyed Gabelle Tax at accounting web but some conferences are sales pitches and are not interested in discussing their software are whatever they are offering.  It has become a competition between all of them especially computer companies who is better then who.   Some conferences you can walk away with nothing.  Do you know what I know  and then tell you nothing other then how great they are.

Most bookkeepers do not have time to go to conferences as it is too much time out.    However I do enjoy conferences as I am a social person and like catching up with everyone and have developed many friends over the years in the accountants and bookkeepers profession.    

 

 

Thanks (1)
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By abaco
04th May 2015 17:30

New Products

Despite the ease offered by present day accounting packages, someone maintaining company accounts will always be regarded as indispensable for business  managers (especially entrepreneurs) who are more concerned with sales and new products. However for our part we have played safe by adding value to our own business by advising on employment law, using the services of a retired manager of one of the biggest specialists for employment law in the country and planning and forecasting profits, cash flows and taxes for clients using figurewizard. These are effectively our new products and are generating significant new activity for us.

Thanks (2)
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By TaxAccountantSussex
05th May 2015 10:34

Cloud is the future
We have doubled our bookeeping sales by embracing cloud software and have a steady stream of new clients by referral. If you are IT literate and embrace change then the future is bright.

Thanks (0)
By ChrisScullard
05th May 2015 17:08

There seems to be a general feeling that because bookkeeping can be largely automated and 'made easier' by cloud packages that business owners will all do it themselves.

This is nonsense.  Like many tasks business owners outsource because they have better things to do with their time.

Building a website can also be done quickly and easily by anyone remotely IT literate.  This doesn't mean I won't outsource this to someone else.

We do the bookkeeping for nearly all our clients.  HOW we do it is very different to even 12 months ago, WHY we do it is for exactly the same reasons.

Thanks (3)