As more and more online bookkeepingÂ automation is being introduced to small businesses, it seems the question is being asked by both small business owners and forward-thinking bookkeepers alikeâ€¦ are bookkeepers being phased out in favor of technology?
It is an attractive idea to most business owners, and thereâ€™s proof of the economic benefits. Not long ago the Wall Street Journal published an article that included a case study, with the headline: â€œThe New Bookkeeper Is a Robot”
Of course, itâ€™s easy to understand why most small business owners would love the idea of having the bookkeeping handled automatically without the need to pay a bookkeeper. But even beyond the expense savings, from the clientâ€™s standpoint, it also removes (theoretically at least) what they really hate.
Tracking down missing receipts, finding bank statements, keeping track of vendor bills, and answering what seem like unimportant, detailed questions on transactions from one, two or more months ago. Along with this, a major complaint the vast majority of small business owners have against accounting professionals is that we are slow to respond or offer assistance as needed. (By the way, I find it rather amusing that this sounds a lot like the complaints most bookkeepers have about getting info out of their clients! Maybe it IS a human thing?)
Enter automated bookkeeping which promises to provide real time financial information anytime, anywhere. Business owners are usually moving quickly with too muchÂ to get done in a day. So the idea of getting what they want quickly and with little effort is appealing. Technology can (mostly) deliver on that promise now.
Threat or Opportunity?
So where does that leave us? Should we be shaking in our boots? Is the bookkeeping profession going to disappear?
Not quite yet, but if youâ€™re running a traditional bookkeeping practice where you’re doing the bookkeeping on-site, or picking up the paperwork from your clients, entering it into the books each month, and charging by the hour, the news is not good. That is, if you want to keep running your business the same way youâ€™ve been running it.
Weâ€™re going to have to change our role and what we offer to our clients if we want to survive (and thrive). If we donâ€™t, weâ€™ll definitely see fees spiralÂ downward and become obsolete. That will be especially so withÂ the young tech-savvy entrepreneurs coming up. But stick with me here, there’s some good news in this too.
Lessons From The Past
As a lesson to be learned, think about what has happened to bank tellers. When ATMs (Automatic Teller Machines) first came out, they were a great invention of convenience (and new revenue for banks). But tellers werenâ€™t yet fully replaceable. But as a career choice, it would’ve been wise to learn additional skills, since the position would only contract as technology advanced.
Fast forward to today when most banks offer mobile deposits and online banking in addition to standard issue ATMs. How many times do you need to go to your bank and talk to a live teller? Yeah, I barely ever have to go to the bank anymore either. And when I do, thereâ€™s usually only one teller on dutyâ€¦ where there used to be four or five in timesÂ past.
If we donâ€™t want our bookkeeping business to go the way of the bank teller, we need to change our approach to how we run our business. Technology is moving faster than ever, so I doubt we have as much time as tellers did to refocus.
The good news is, we can embrace the technology and even leverage it to our advantage. In fact, there are some HUGE opportunities that areÂ now openÂ specifically toÂ bookkeepers… if we’reÂ willing to seizeÂ them. These will actually grow your practice exponentially and create far greater win-win solutions for your clients than ever before!
Prepare Now to Thrive
Now is the opportuneÂ time, while small businesses areÂ moving toward total automated bookkeeping. I can see at least two main areas on which we should focus our attention. You can choose one or both of them, but your bookkeeping business will definitely prosper either way if youâ€™ll invest the time and resourcesÂ to transitionÂ into them now:
- Leverage Technology as a Service
- First, use the technology available now to streamline your internal bookkeeping workflow to get more done in less time
- Second, switch to flat fees or value pricing (so you donâ€™t get killed by your efficiency charging by the hour)
- Third, offer technology consulting to your clients to design their internal financial workflow. Many are overwhelmed by the app choices and desperately want a trusted guide to do the nitty-gritty research and detailed integration for them.
If this option appeals to you, then youâ€™ll love the March TFB Premium lesson: Next Level Virtual Bookkeeping Workflow for Attaining Zero Data Entry where we tackle streamlining your own internal system.
- High Value Business Advisory Consulting
- First, recognize the specific ways that you can provide high-value advice to your clients that they will immediately recognize as a core need for their business success (services that enhance their profit and cash flow)
- Second, differentiate your services from the competition and position your practice for premium level fees
If you love the idea of rolling up your sleeves and being a proactive team player in your clientsâ€™ business success, then youâ€™ll want to join me on the free LIVE webinar Iâ€™m hosting this Thursday, March 17th with author and multi-million dollar entrepreneur Mike Michalowicz: From Traditional Bookkeeper to Trusted Advisor. Weâ€™ll cover the 5-step process that bridges the gap from compliance-only services to becoming your clientsâ€™ trusted advisor.
Even if you canâ€™t join us on the webinar live (it is tax season after all), youâ€™ll want to register for this event, since we will be providing a replay, but only to those who register for the live event.
Have you already started moving toward automated bookkeeping and/or advisory services? Â Whatâ€™s your take on where we are headed?