The first known printed use of the word “bookkeeper” in English dates back to 1555, according to Merriam-Webster. Obviously, the way in which bookkeepers work has changed significantly over the years, but what’s even more important is that the evolution is far from over. Technology is breathing new life into the profession and transforming the role bookkeepers can play for the future of small businesses.
“‘The definition … is continuously changing,” said Cindy Schroeder, owner of Bright Bookkeeping in Winter Garden, Fla. “I think there’s still going to be a lot of changes in the next five to 10 years, and maybe in five years when we have this conversation, it will be absolutely nothing like it is right now. But I think as long as there’s small businesses out there, they are always going to need someone to help them understand the numbers and figure out if their business is successful.”
The need among small-business owners was underscored in the 2017 “SMB Emerging Trends in Accounting” report by B2B network provider Viewpost. According to the survey of 5,000 U.S. small and mid-size business decision-makers, many small businesses do not have a clear picture of their bottom line and continue to rely on spreadsheets, manual data entry and the postal service. Furthermore, 18 percent of SMBs do not use accounting software.
However, times are changing. Armed with a forward-thinking mindset, a new approach to doing business and innovative technology, a new wave of bookkeepers is emerging. Their mission: to change the game for small businesses.
“The new wave of bookkeepers will help keep current firms on pace with technology. Cloud technologies, automation, artificial intelligence, machine learning, etc., all help to create processes that streamline firm workflows, boost accuracy, and give valuable time back to bookkeepers to concentrate on their clients,” said Ariege Misherghi, accountant product leader for the accountant segment in the small business and self-employed group at Intuit.
Bookkeeping gets high-tech
Technology is bringing about significant change for the bookkeeper of the future. Artificial intelligence, machine learning and blockchain technologies are poised to transform how bookkeepers work and serve their clients. Understanding what these technologies mean for the profession and the opportunities they can bring is essential.
One example is botkeeper, a company that is looking to help businesses save time and money by automating bookkeeping tasks through a blend of dedicated machine learning, artificial intelligence and human assistance.
“I think all too often the average bookkeeper today … spends all of their time just trying to keep up with the day to day and get all of the data in,” said botkeeper’s CEO, Enrico Palmerino. “And then as soon as the data is in they are moving on to the next month and trying to get all the data in for the next month. They’re not spending much time, the most important time, reviewing and looking at that data to make sense of it.”
With botkeeper, companies secure a dedicated bookkeeper — referred to as a “botkeeper” — that provides accounting services virtually. Botkeepers represent a combination of technology and human assistance that can securely access a business’ financial information (e.g., bank records, credit card data and accounting software) to make entries, track and schedule revenue and deferred expenses, account for payroll, reconcile bank accounts, send invoices, and more. And it’s available around the clock.
The company currently serves more than 500 clients ranging from startups, to tech companies, to dental practices, and retailers, and Palmerino said it recently launched a partner program for CPAs through which CPA firms can white-label botkeeper to offer bookkeeping services to their clients.
“We have a bunch of CPA firms that use [the program], and we actually have a bunch of what used to be competitive bookkeeping companies also using it. So, they’ve decided, instead of hiring in-house accountants, to white-label botkeeper and provide that to their clients instead,” said Palmerino.
Also looking to work with accounting professionals is newcomer PeaCounts, a bookkeeping solution that is built on the NetSuite platform and leverages artificial intelligence and blockchain technology.
“Part of what we’re trying to do is have the accounting professionals be included in this and receive a stream of income from this type of product and service, rather than just being displaced by it and getting nothing out of it,” said co-founder Crystal Stranger.
Here’s how it works: Users access real-time information via a dashboard and mobile app, and adding a business receipt is as easy as using a mobile phone to scan the receipt. Artificial intelligence helps users manage daily bank reconciliations and identify transactions as they are entered. Behind the scenes, PeaCounts secures client data via blockchain and utilizes a “blockchain of identity” concept where only users will have access to the data registered to them in the directory.
Stranger, an Enrolled Agent, became impassioned by the idea of such a product after seeing so many entrepreneurs struggle with the record-keeping parts of their business. As the owner of a tax office, she experienced this firsthand with her clients when they would come in at tax time with a shoebox full of receipts and have no idea what they made or spent during the year. Together with accounting software developer Shashank Shukla, she founded Viact Systems and began developing PeaCounts.
Meanwhile, Intuit is working to help firms transition to the cloud and better serve clients through enhanced workflow and automation tools that leverage machine learning, AI and voice commands to eliminate data entry on the front end of all accounting systems.
“Technology advancements not only provide for more accurate data and end results, but they give bookkeepers back valuable time by making processes more efficient. With more time back in their days, bookkeepers can focus on acting as strategic advisors to their clients as opposed to just number crunchers,” Misherghi said.
The enabler
For a growing number of bookkeepers, the advancements in technology and greater automation mean more time and resources can be dedicated to expanding their business — whether it be through offering higher-margin advisory services or bringing on more clientele.
“The bookkeeper of the future actually has a much more connected role, a much more advisory role as part of what they’re doing. With things that we are doing around machine learning and artificial intelligence, we want to give the time back to the bookkeepers,” said Herman Man, vice president of product and partnerships at Xero.
Said David Emmerman, a partner at Long Island, New York-based firm Emmerman, Boyle and Associates, “The less touch points on data, the more profitable we are and also potentially the less cost that we have to charge our clients. If you think about AI and machine learning in respect to OCR on source documents, if you can leverage the AI and ML that’s out there to [for instance] read a check better with a higher level of accuracy, no matter how messy your handwriting, you’re going to create more of that opportunity time for that bookkeeper right off the bat.”
Added Emmerman, “If you have the ability to take some technology, put it in place and save yourself, let’s say, 30 percent of [your] time, now you can add some clients. You’re not necessarily taking clients away. Or you can look at the five clients that you have and you can say, ‘Well, I’ve saved 30 percent of my time, so what else can I do for these clients that they’ve been asking for?'”
The firm offers fully outsourced bookkeeping and virtual CFO services to its clients and leverages such technology as Xero, Hubdoc and Expensify.
Adding value
“Put yourself out there,” said Cindy Squires, CEO of cloud-based Mile High Bookkeeping Services in Parker, Colo. “What you need to do as a bookkeeper is start to prepare yourself for what’s going to be happening in the future. Stay at the forefront of implementation. Be among the first people to learn about and test all of the new technologies.”
Mile High Bookkeeping Services uses QuickBooks Online, and apps that integrate with QBO, to offer its clients such services as bookkeeping, payroll, accounts payable/receivable, and financial statement preparation.
“At the end of the day, we are business advisors. We are able to take that information and we can add value to the client based on what we can see from [their data] because that’s what we’re trained to do,” Squires added.
Echoing the sentiment is Schroeder of Bright Bookkeeping. Leveraging QuickBooks Online and a handful of apps that integrate with the cloud software, Schroeder offers clients full remote bookkeeping and accounting services. The technology has enabled the firm to boost its clientele, broaden its scope of services, and eliminate unprofitable travel to and from clients — all while enjoying greater flexibility and enhanced work/life balance. “That’s the biggest [benefit from technology] — that freedom that you can offer these types of services remotely and it’s more efficient and it gives you an audit trail,” said Schroeder. “And it allows us to offer more advisory services because the other stuff isn’t taking as long.”
Jennifer Warawa, executive vice president of partners, accountants and alliances at Sage, acknowledged that, for some, a barrier to entry into more advisory services may be a lack of confidence. For those professionals, a collaborative partnership may be an ideal solution. “There are a lot of bookkeepers that are made to be able to offer advisory services. I think the biggest challenge that we see in the bookkeeping market is confidence,” she said. “Sometimes it’s the fact that maybe they don’t do taxes or they don’t have their CPA designation, and so we’ve seen those bookkeepers maybe partner with a CPA.”
Emmerman agreed and said, “Since we’re using all cloud-based technology, there’s no inhibitors anymore to creating this collaborative environment across firms. So, those folks that are doing advisory services, they might not want to be doing any of the bookkeeping. Therefore, there’s excellent opportunity to drive growth on both sides.”
Industry sources note that significant changes are on the horizon, but believe that staying flexible and viewing technology as an enabler will be key for the bookkeeper of the future.
“You have to be willing to jump on the train or you’re going to have to get out of the way, because the clients are forcing us to move in that direction,” said Karine Woodman, founder and CEO of 24hr Bookkeeper in Hibbing, Minn. “In my opinion, I think it’s great. Why wouldn’t you want to use technology and automation to make your job easier and make the client experience better?”
This article was written by Antoinette Alexander from Accounting Today and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.
