We've been hearing about the ‘rise of the machines' and automated bookkeeping technology taking over much of what we do for quite some time. Many of us are listening, and slowly upgrading workflows and systems to add more automation and moving to cloud-based systems. As a result, we have improved speed and flexibility in the services we are providing our clients.
But bigger changes are afoot, and the pace and momentum is increasing. Fully automated bookkeeping is within sight, as the machines are getting smarter. Are we keeping up?
Yes, we're going (more) paperless and using more virtual systems. Yes, many of us are at least realizing that charging by the hour just doesn't work when you reap the efficiencies of more automated systems. So we're slowly switching to packaged services with flat fees and / or value-based pricing. This is all positive and good, even if we get a few bumps and bruises in the process.
We've certainly had a lot to learn, but it seems, this is only the beginning.
In fact, it has become rather overwhelming, hasn't it? New apps are multiplying faster than bunnies! Trusted cloud-based solutions are changing constantly. It's a blur and becoming nearly impossible to easily know which solution will solve specific workflow scenarios. Instead, hours of research and testing are needed. And the core software we depend upon, along with the “rules of the game” that we've come to rely on while restructuring how we run our practices are making major shifts too.
Some of the Changes We've Seen in Recent Months
Intuit and the QuickBooks ProAdvisor Program is going through significant changes, one right after another…
- Wholesale pricing via QuickBooks Online Accountant only applies to new QuickBooks Online clients you take on board beginning, November 1, 2018. If clients already have a QBO account, you get the same price they do. (No benefit to including their subscription into your packaged services)
- The QuickBooks Advanced Certification for desktop is being discontinued December 31, 2018 (with existing Advanced Certified ProAdvisor credentials expiring in 3 years)
- Brad Smith will be stepping down as CEO at the end of December 2018
There are others, but you get the picture.
In fact, I suspect that there will be additional significant announcements from Intuit at QuickBooks Connect next week.
The Times, They Are A-Changing
Of course, you've heard this from me before. I've written in recent times and even hosted an experts-in-the-trenches discussion on the changes we are seeing as our profession is disrupted. As we feel the landscape changing beneath our feet, though we've been fairly warned, some distinctions are emerging that are quite frankly disturbing.
1. The software companies are now in control of the direction of our profession. We are dependent on them, but they are less so on us. Not good.
2. The perception of the value we bring to our clients is diminishing and causing significant downward price pressure (especially as the marketing promises of the software companies regarding faster and cheaper automated bookkeeping solutions influence our clients' decisions)
How Will You Weather the Future?
I see four different paths we can take. I used to think there would be somewhat of an even distribution among them, but I was wrong. Based on what I'm seeing now with fellow accountants and bookkeepers in response to these changing tides, it's going to be a rather lop-sided future. I'm not so sure many of us will be sticking around.
In fact, I very much agree with what Barry Melancon, President and CEO of the AICPA said in 2017:
“We won't recognize the vast majority of CPA firms in five or 10 years”
I think there's even less time for bookkeeping firms. The four most likely paths that I see right now are…
1. Ignore the changes and watch your practice slowly dieÂ If you're very close to retirement, this may be an option. But it's sad because it also means that you really only just created a job for yourself and not a business after all.
2. Embrace automation and scale using volume. This means that you will need to focus your efforts on building your automated bookkeeping machine, keeping it running smoothly amid constantly changing technology. You'll need to market the living daylights out of your commodity “fast and affordable” services as well.
For most of us, there's a huge learning curve to marketing, so that may need to be outsourced (which is another set of challenges). With this path, your clients will likely consist primarily of micro businesses who are always looking for the most bang for their buck; loyalty doesn't factor much into the equation with them. This model will work for awhile, but over time, it is a commodity game and a race to the bottom on pricing. The larger, online SaaS-like service providers will win. So prepare to reinvent your business when competition starts to get too tough. It won't be a level playing field.
3. Embrace automation and specialize. This model still leverages technology, but with the intent of going deep on client advisory and support. The gained efficiencies do not mean you compete on price. Instead, you free up time for working with the same number or fewer clients, providing higher-value, higher-involvement services that go far beyond historic record keeping. It's a new level of service. If you want to dig in and partner with your clients to help them reach their goals and grow, then this model is a good one for you. For many of us, it requires stepping up our analytical and business consulting skills, compared to how we've been serving our clients up until now.
4. Go fully into consulting and abandon compliance services altogether. Opportunities are being created for highly focused, financial strategy consulting and technology consulting, to name just a couple areas of need. Again, this works best if you can specialize in a specific, high-value service or industry vertical where there's high demand for expertise. This will pretty much equate to a near career change.
So, we have arrived. As automated bookkeeping and accounting (including tax services) take hold, we need be making choices about our direction now. In fact, just today I was asked to connect with a company dubbed as “The Artificial Intelligence platform for Accounting productivity,” which already integrates with all the key accounting software programs. They claim that their platform “automates tasks performed by humans…has the ability to execute accounting tasks at superhuman speed and accuracy.”
I will be investigating what they have to offer in reality. But there's no question about it. Automated bookkeeping is here now (or at least knocking at our doors)Â Are you ready?
By the way, as mentioned above, I'll be attending QuickBooks Connect next week, so you'll definitely be hearing more about what I learn there too.
But also, if you happen to be coming to the conference too, amid all the high tech talk of the future, please consider joining me in a brand new, totally non-automated, very human outreach effort while we're there.
A significant group of us in the accounting & bookkeeping community are participating in a grassroots project. We'll be reaching out to help the homeless in San Jose (it's a big problem there) with simple donations of items that they need most. If you want to pay it forward to those who don't give a lick about automated bookkeeping, but are just trying to find their next meal or a place to sleep – here's how you can help.
The donation drop-off location is Room 112 in the San Jose Convention Center (see the flyerÂ for dates and times).