What does the future hold for bookkeepers and how can they ensure they are still relevant in an increasingly fast-moving technological world?
Bookkeeping as a profession is changing rapidly; but fears that the profession might suffer as companies and individuals undertake their own bookkeeping are proving unfounded.
‘In fact,’ says Sharon Cole, a bookkeeper with a range of clients, ‘technology makes bookkeepers more relevant and useful than ever. Technology means you can store documents in the same place and work from different locations, access data and share it when you need it; but you still need a bookkeeper to do the work. Payroll, collating turnover and expenses and creating journals are the kinds of functions bookkeepers will still be essential for in the future.’
The streamlining of accounts by using the cloud removes much of the laborious work previously undertaken by bookkeepers. This potentially frees you up to gain more clients. Marketing yourself as a bookkeeper is a key way to differentiate yourself from your competitors, attract new clients and ensure you retain existing ones.
Does the technology make it easier to generate more business? ‘I have a different take on this,’ says Cole, ‘which is that I have been downsizing my client base. Today I concentrate on fewer, key clients.’ This is because, for Cole, ‘the most important thing about being a bookkeeper is that the client trusts you and that you are there for them. If you have too many customers, that doesn’t happen. My focus is on offering a reliable service to a core set of people whose businesses I know well.’
Cole’s view of the profession is that ‘most bookkeepers are swamped; they are turning work down, rather looking for new work – unless they are new.’ For newly qualified bookkeepers then, this is good news; there is plenty of work out there, and by marketing yourself and pricing yourself in the right way, you will be able to build your business.
Does it help to specialise? ‘It’s certainly a way forward. The demands for everything to be exactly right and for bookkeepers to know the minutiae of a vast array of data mean that if you specialise in a particular area it can make life easier.’ For example, Cole is bookkeeper for a couple of charities. ‘This requires a totally different skillset to working for a B2B (business-to-business) company.’ A way forward for bookkeepers is to consider a niche market they would like to work for, and specialise in that field.
An evolving profession
Are there opportunities for bookkeepers in future to become business advisers? It’s true to say that going online means that the client has more input into bookkeeping activities – a knock-on effect of this is that the bookkeeper has a much more detailed knowledge of the client’s business, and is more able to spot areas for improvement.
‘There’s an opportunity to become a business health consultant,’ says Brian Palmer, Tax Policy Adviser at AAT. ‘Traditionally, bookkeepers are reacting to past information – often months later, when from a consultancy point of view it’s no good to anyone. Instead, you can move to (almost) a real-time scenario, where you can analyse the business and how it is operating, and see what could be done differently.’
‘As you are performing data entry on everything on a monthly, weekly or even daily basis, you have more of a feel for things and increasingly you find yourself able to identify what needs looking at,’ says Cole. ‘So yes, there is more opportunity to make suggestions; but you would have to be a particular type of person to want to become a fully-fledged business adviser.’
For Cole, ‘it’s a specialist field and unless you have extensive knowledge of rules and regulations it’s hard to advise people.’ She adds the further caveat that it ‘depends on what the advice is. A key issue for bookkeepers is that people will pay for your services because they don’t want to do the work themselves – but they don’t want to pay more than is strictly necessary.’ In other words, for Cole ‘there is a pay-off between what you can do, and what people will pay you for.’
The key is to consider what other services you can offer. In the end, any data around incoming and outgoing income, payroll, cashflow and e-commerce ‘are the province of the bookkeeper.’ There is plenty of scope to grow yourself both as a professional and as a business.
HMRC’s move to digital accounting also offers opportunities to bookkeepers. Whilst potentially it brings more deadlines to bookkeeping workloads, ‘you could consider a monthly fixed fee in order to spread workloads,’ Palmer suggests.
Rather than seeing the compliance-driven model as a burden, see it as something that helps the role of bookkeeper change positively. The old model of doing things once a year makes you distant from your client – in future, you will be working together much more closely and more regularly.
The need for bookkeeping skills
Ultimately, software will never replace bookkeepers because financial knowledge, capability and willingness to keep knowledge up-to-date is essential to do more than the most basic bookkeeping and tax returns.
‘The frequent changes from HMRC make it increasingly hard for bookkeepers to stay on top of things,’ says Cole. ‘An individual cannot keep up with a two-inch thick guide each year which has the changes you need to know inside it.’ Whilst this preserves the need for bookkeeping as a profession, it’s also one of the arguments in favour of focusing on a small number of clients and understanding their businesses well – rather than trying to be a one-stop shop for lots of different people.
Future thinking – key facts
- Technology does not make bookkeeping redundant – use it to your advantage, and to enhance what you can offer the client.
- It can help to specialise – knowledge requirements on bookkeepers increase all the time and it can help to focus on core areas you have expertise in.
- Grow the business the way you want it to be – building the relationship can be more important than getting new clients.
- The profession is evolving – in the direction of business adviser and business health consultant. If that appeals to you, there are opportunities.
Mark Blayney Stuart is Business Journalist of the Year, Wales Media Awards 2017 and Former Head of Research at the Chartered Institute of Marketing.