Fixed Fee....ooops - The Book-keepers Forum (UK)

BobHarper · Guru

RE: Fixed Fee....ooops

kjmcculloch83 · Expert

Oh Bob, wait till I get my violin.

I've happily answered a lot of your questions Bob, in detail. Far more relevant detail than you have ever used in any answer to anyone. You may not see the relevance of my question, but I think it's an important one.

I don't dislike your presence. I have always felt that you are worse than a politician to get an answer from. I also think that you don't do as much as you could to help others here.

Whether or not I agree with you is neither here nor there.

Kris

kjmcculloch83 · Expert

Oh, and as a wee aside, my attitude hasn't changed. If you look back you'll see we were having a similar discussion back in september 2009!

You've moved from fixed fee to value pricing, and from bookkeepers to alternative accountants, but the same issues are present in both.

Kris

Shamus · Forum Moderator & Expert

Bob,

not so much issue on the pricing which is more a matter of debate and opinion. We may not see things the same way but that doesn't cause me any major issues. Plenty of people that I disagree with but I don't take that beyond the immediate debate.

The sheep video on the other hand... Well, that is just wrong. And yes, that one does cause a major difference of opinion between us.

Also the thread where your stance was that bookkeeping is dead and everyone needs to be moving to accountancy.

I don't want to get into either of those debates here as each have their own respective threads and there is little that can be said without repeating ourselves.

Lets face it, somethings we are just never going to be on the same page with.

On the accountancy body question the point has to be that you are standing outside a profession throwing stones at it. If you are not an accountant then you are in no position to attack the profession and if you did have the knowledge base born of a relevant qualification to attack it the way that Crunchers have with the sheep ad then you would find yourself not a member of it for very long.

A lot of people on here have invested a lot of their lives acquiring professional body memberships that they are very, very proud of. Ask yourself, how do you think it goes down when someone who hasn't been through all of those years of study likens their profession to mindless sheep.

My view is that Crunchers realise that the video was ill conceived but it cost a lot to make so you won't back away from it.... Of course, I'm not expecting you to admit that Crunchers have made a mistake.

BobHarper · Guru

@Kris - perhaps I missed your attitude before but I'll watch out for it.

Yes, I could probably do more for people than I do here but it is not practical because. As I have explained before, the answers are not simplistic but I will be releasing some training videos soon so perhaps these will help. And yes, Crunchers have moved from Bookkeepers to Alternative Accountants (for good reason) but Value Pricing has always been our approach.

BobHarper · Guru

@Shaun - I think it depends on perspective.

When the Value Pricing penny dropped for me I started to see things very differently. And, when my telemarketing time and I spoke with thousands of accountants (and I worked with hundreds of firms all over the UK) I found a profession that really isn't aligned with their clients.

It's not some much accountants but time based pricing. I don't think you'll understand how wrong the question in on this thread is until you understand Value Pricing.

But, please understand that I have also have very strong views about the the way accountants typically treat micro/small businesses. I think it is disgraceful that they charge for work that doesn't need to be done, do not innovate to save their clients money and do not offer any real help apart from charging more than they need to for basic work.

Think about the words in the video and tell me if any are unfair.

NickCraggs · Guru

@Bob,
i have been reading this thread for a while now but i really do think that the below is completely wrong, and you almost suggest that accountants are basically fleecing their clients. In all my experience of working in practice i have never come accross behaviour below. There might be one or two like that, but statements like yours below are obvioulsy wrong and slightly offensive.

But, please understand that I have also have very strong views about the the way accountants typically treat micro/small businesses. I think it is disgraceful that they charge for work that doesn't need to be done, do not innovate to save their clients money and do not offer any real help apart from charging more than they need to for basic work.

BobHarper · Guru

@Nick - I understand my comments may offend and many people choose to react that way where they come across me. Read on if you want to understand why I think that.

The normal way traditional accountants work with micro/small clients (which is my focus) is the client does the bookkeeping and the accountant does the accounts. Typically, the bookkeeping is quite poor (e.g. no bank reconciliation) and the accountant spends 15 hours plus producing accounts. This goes on for years and years with the accountant completing and correcting the same mistakes every year.

Have you come across this situation?

I have because I've been there in practice and spoken with thousands of firms about this. But, it does not need to happen; year-end accounts can be completed for a fraction of the cost if the bookkeeping is better. And, I know that accountants can make this happen, if they really want to.

The reason why the traditional accountant's clients bookkeeping remains poor (and year-end fees higher than they need be) is because the accountants pricing/revenue/business model is based on a time based billing. They are not rewarded for addressing the route cause. However, firms that take ownership/responsibility for the quality of the bookkeeping can significantly reduce the time/fee for accounts production. They do this by proving training and software to clients as part of their service.

I'd be interested to hear your thoughts?

Do you see my point?

semsley · Guru

Amanda wrote:
Love it Kris!!!!

I love Dragons Den, Hilary Devey is one of my favourite dragons along with Peter Jones. Changing the subject (sorry Georgie), has anyone heard Greg James (DJ radio 1) do an impression of Hilary Devey, its just brilliant. He had her on one of his afternoon shows once, and she thought his impression was brilliant!

I used to like Peter Jones until I went to discuss a job with someone he had gone into business with (no names no packdrill) but the relationship was not a good one and it cost them dear to dissolve the relationship, however, they still run a successful business.

AMajor · Veteran Member

Hi everyone, I've read the posts with interest and putting aside the banter Georgie raises a potential situation for which I'd value your replies. Not sure if I should start a new thread so apols if I break forum rules... I had a referral from a local accountant and I am going to see the prospect on Monday. The accountant suggested that a get the prospect on monthly standing order - is this the same as monthly fixed fee pricing? The prospect has asked me to give him an idea of how much it will cost - something I always hate doing. i usually estimate on worst case scenario and over estimate so they usually end up being charged less than estimated, which I think is better than the other way round. I've told the client the hourly rate and he asked if we would set up a standing order. The accountant suggested doing it because they'd had problems being paid in the past. I'm not afraid of discussing this upfront so I set the scene right from the start. I have always charged an hourly rate on actual time spent, I do charge for time spent dealing with queries but not for every phone call or email. At a conference last week "monthly bundling/subscriptions" were suggested as well as using companies like Receipt Bank that can streamline your approach. So I'm now wanting to explore fixed fees and different approaches: - how do you decide what level of monthly fee or standing order if the client is new to you - do those that use services like Receipt Bank change their pricing model to either monthly fee or fee per transaction Sorry for the long waffle Angie

Shamus · Forum Moderator & Expert

Hi Angie,

I would take the worst case scenario and base your standing order on that.

The accountant has stated that they have had issues in the past with non payment and you are simply factoring that into your fee's.

Yes it is fixed price but whenever one goes into a fixed price arrangement ensure that

1) The price is to your benefit rather than the clients. Telling clients a monthly charge sometimes seems to make them oblivious to the annual cost! I know, how difficult is it to multiply a figure by 12!

2) Your engagement letter makes it absolutely clear what such payment incoprorates otherwise clients will just assume that they have bought you and that any extra services that they can think of are all part of the price.

To determin an initial fixed fee can be difficult but that's one of the good things about the free consultation before taking the client on. They invariably think it is about them deciding on whether to come to you but equally important is judging the client and making a call on processing volumes, quality of documentation, clients credibility and knowledge base, etc. etc.

Ok, before going down the receipt bank route explain to us exactly how it works from what you have been told.

How does you bit of crumpled paper become a spreadsheet.

Take it through step by step and ensure that you have not missed something in the sales patter about a process that you might later regret signing up for.

I'm genuinely interested to see whether my understanding of the bookkeepers role changing from bookkeeping to scanning machine operator is fundamentally different to the reality.

kind regrds,

Shaun.

kjmcculloch83 · Expert

Hi Angie

I think the pricing was probably done to death at the beginning of the thread. For your second question, i'd love to get my clients to use receipt bank. The problem is that i would need to charge extra to cover the receipt bank costs, but my clients don't seem to buy into my view and see the value in this.

For new clients i think it would be easier, but it also depends on your clients. Some of mine have told me they like to have the physical papers, it doesn't make sense to me, but why argue?

Regarding standing order, all my monthly clients pay by this method, but I use fixed fees so it's a lot easier.

Kris

Shamus · Forum Moderator & Expert

Thats a good point Kris,

if the clients do the scanning and photocopying and send them to us then we send them to Receipt banks that's a diffent scenario.

I'm just thinking of the difficulty I have trying to get clients to even give me there receipts let alone scan and send them.

If one wanted the clients to do that I suspect that you would be met with a firm "and what the hell do we pay you for then" followed by you saying how much you do for them and them wanting to pay less for your services corresponding to the cost of their time doing our jobs for us.

My arguement was from the point of view of things being as they are now with the client giving us the bin liner of receipts an the only difference being that we scan, send, receive, evaluate, process rather than the current colate, evaluate, process.

My office has a lot of floor and dsk space so I don't actually mind the colation process and it is one of the only times that I will actually play music in the office.

Ooh, reminds me of an old thread asking what we listen to whilst we work. Well, for the turn your brain off times it's Pink Floyd or Sister of Mercy. All other times I always work in silence.

Right, off to find that old threead to correct my reply.

Shaun.

kjmcculloch83 · Expert

Ah Shaun, I think you miss an important point of Receipt Bank. You can actually send them the paperwork and they will scan it for you. It's certainly a bit more expensive that others I've looked at though. I got some quotes from scanning services, many of whom would scan the paperwork, extract the details to excel and add a link to the paperwork from there. They worked out quite a bit cheaper than receipt bank for bigger jobs.

Kris

pDm · Senior Member

My experience of fixed fees have been similar. I've always erred on the side of caution and end up underpricing by considerable amounts. Although this has had an unexpected positive. in each case so far, the client has been the first to say, "Look, I know you're doing more work than you expected to do. Do you want to re-quote?"

My response is usually, "I'm more interested in getting a full-year view of your business. We'll keep an eye on it and I'll give you a breakdown in 6 months."

After all, your prices might be under by 23% now, but they might not be in quieter times of the year (hopefully 23% up?!)

kjmcculloch83 · Expert

One of the other things worth bearing in mind is also that when we take one new clients the work generally takes longer thann when we get used to the work. As time goes on the time we take for clients seems to decrease, even though the workload may not.

Kris

Shamus · Forum Moderator & Expert

kjmcculloch83 wrote:
One of the other things worth bearing in mind is also that when we take one new clients the work generally takes longer thann when we get used to the work. As time goes on the time we take for clients seems to decrease, even though the workload may not.

And still we base initial estimates on worst case scenario and put our prices up every year biggrin

Why are we not all rich yet?

AMajor · Veteran Member

Hi guys,

I'm certainly interested in the mechanics of how services like receipt bank works - and if it does streamline the process. I would definitely trial something out before signing up.

Kris, if it does save you time would you not absorb the cost if it gives you more capacity?

I think for my chap on Monday my approach will be to do this first vat quarter so I have a better idea of time/fees and work out monthly fee from there. There will most certainly hassle factor included for queries.

I am pretty sure I will be able to save him time (he currently prepares spreadsheets) as well as money (he has been paying his accountant for the bookkeeping) and train him into sending me the books on a monthly basis. He seemed to be up for that.

Thanks Angie

Spamkebab · Expert

Where's Bob?

Amanda · Expert

Ha Ha your funny Neil!

Maybe he doesn't work Saturdays!

kjmcculloch83 · Expert

He'll bounce back soon Neil.

BobHarper · Guru

@Angie - some of the problems with quoting an hourly rate is that a) you focus the client on cost (not the value you bring) b) yo make it easy to compare yourself to the competition c) clients will still ask for a quote anyway but most importantly d) you are not focussed on what is important to the client.

Quoting hourly rates and billing based on time is why most (80% plus) bookkeepers/accountants are very busy with lower profitability than they could have.

The opportunity with new solutions like Receipt Bank (and technology like Xero) is to change the way clients/bookkeepers/accountants work. Basically, the idea is to reduce the fees/cost of bookkeeping/compliance and focus on higher value and more interesting work. And, instead of charging by the hour price for the value of the higher value work.

For example, the old way could be an engagement of £1,000 a year for 60 hours of bookkeeping. The new model could be the client spending £400 with the likes of Receipt Bank and you charging £400 fixed price for management and technical review. If this took you 10 hours a year it means the client saves 20% of costs and your profitability is 145% higher.

I accept this means your turnover is 20% lower and that is why at Crunchers we are adding on new services.

@Kris - was that answer OK with you?

Shamus · Forum Moderator & Expert

Hi Bob,

Statistics. Got to love them as one can make anything be anything that one wants it to be.

The above implies that 83.33% of our time is currently spent on data input.

Lets take the scenario for how the receipt bank is intended rather than as I see it used, Basically that the end user takes on the scanning the receipts.

I'm assuming that the bookkeeper pays receipt banks for the client to be signed up.

What about the clients time in scanning in the receipts? They seem to be getting a £200 discount for taking on a lot more work which is what they took the bookkeeper on to sort out in the first place.

Are clients really willing to take on so much more work for no improvement in service but a 20% reduction in fee's?

I feel that whilst receipt bank should eradicate much of the collation and sequencing stage of the bag of receipts, the bookkeeper still needs to evaluate the content of every receipt and that's still going to take more than 16.77% of the time that they previously spent working on the clients books.

From experience I find the best way to visualise processes is by creating a process flow diagram and then transferring the process to a swimlane diagram. Miss nothing out in the process and you will get a much clearer view of what the process is now, what the process will be and see that whilst there is change it may not herald the sort of return that you believe it will.

Also don't forget about factoring into that the cashflow element? When does the bookkeeper pay receipt bank comparative to being paid by the client?

In general terms I think that maybe 20% to 30% (lets take the best case for the scenario here of 30%) of my time is collation and data entry which using your figures would mean that :

Existing scenario : £1000 for 60 hours work equates to £16.67 per hour. Not a bad rate.

Proposed Scenario : Hours saved are 30% * 60 so 18 hours leaving 42 hours work for a client.
Client payment is reduced to £800 to compensate for the client taking on the work themselves (that's not going to go down well!), of which the bookkeeper now pays £400 to receipt bank. Leaving £400 for 42 hours work which equates to £9.52 per hour or a reduction of 42.89% in hourly income in order to free up 18 hours additional time.

Assuming that those extra 18 hours earn £180.88 (9.52 * 18) from an additional client then total return for the 60 hours previously spent if £580.88, or £9.68 per hour so factoring in the opportunity cost the real reduction in the bookkeepers return is reduced to 41.9%.

They are just quick figures so I've not properly reverse engineered the opportunity cost.

What I am saying is that the model that you portray works only on the assumption that the percentage of a bookkeepers time on receipts data entry is higher than it actually is.

That may be true of a small percentage but one of the things that we are in agreement over is that clients demand more from a bookkeeper than pure data entry which is why I state that only 30% (or less) of the time utilised is data entry work (the remainder being accountancy territory).

This really is one of those areas where the statistcs cn be anything that you want them to be depending upon how certain elements are factored into it.

The only real way to make a like for like comparrison is by using real life bookkeepers on an individual basis to improve their existing processes and procedures which may or may not include Receipts bank and cloud offerings.

As I say, the procedures need to be properly charted and costed with possibly the post important step being the swim lanes as at the moment I don't think thgat all elements are being factored into the arguement.

kind regards,

Shaun.

BobHarper · Guru

@Kris - I know you didn't say the new ways of working are better, I did. And, I agree, the vast majority of clients/service providers work in the old way (and they will continue to do so until they change or are forced out of business by the new).

-- Edited by BobHarper on Sunday 30th of September 2012 11:35:56 PM

Amanda · Expert

I Can't see any of mine customers wanting to use receipt bank and actually them sort out the receipts etc. Trying to educate Joe bloggs whose a tradesman to so that would be very difficult in my opinion! I can see that it might actually work, but for me they can give me it in a bag and I'll do the rest. Sometimes although its nice to make money and hopefully one day alot of it, its the service and the friendly smile that customers appreciate!

I know some of you will not agree on this. I can see where you are coming from Shaun.

kjmcculloch83 · Expert

AMajor wrote:
Hi guys,

I'm certainly interested in the mechanics of how services like receipt bank works - and if it does streamline the process. I would definitely trial something out before signing up.

Kris, if it does save you time would you not absorb the cost if it gives you more capacity?

I think for my chap on Monday my approach will be to do this first vat quarter so I have a better idea of time/fees and work out monthly fee from there. There will most certainly hassle factor included for queries.

I am pretty sure I will be able to save him time (he currently prepares spreadsheets) as well as money (he has been paying his accountant for the bookkeeping) and train him into sending me the books on a monthly basis. He seemed to be up for that.

Thanks Angie

While i think it would save some time, and give me a tidy office, I don't feel that it would save enough time to justify taking one the cost. I took on a member of staff recently who can process a transaction for around 20p each. Why pay 30p and then still need to put it into the accounting system. The costs just don't add up, yet.

Kris

kjmcculloch83 · Expert

I do see what you are saying Bob, and while the technology is there already there has to be a mass uptake on an almost universal level to make it work. For that to happen it needs to be a lot quicker and cheaper than the current method, and there needs to be a willingness from all.

I don't like predictions of the future very much. I feel badly let down by Tomorrows world. I expected to be flying a hover car and going on holiday to the moon by now, with robots doing my washing and hoovering.

Kris

-- Edited by kjmcculloch83 on Monday 1st of October 2012 01:17:54 AM

BobHarper · Guru

@Shaun - it was just an example to highlight the opportunity and the general principle of opportunity costs and applying resource to higher value work.

@Amanda - I agree, not every client can be educated (but you don't need to work for every client). You have a choice if your marketing is good enough and marketing includes the value proposition.

@Kris - not sure if your 20p covers all secondary costs (like recruitment, training, management and office space) but data from Receipt Bank goes into Xero.

My guess is you and Shaun have probably worked out the best way to process but this is the old way. The opportunity is the new way.

Amanda · Expert

@Bob - I see what you are saying buy what if you don't use Xero, which I don't, but if you prodominately use QB's or Sage, can it be used then?

I heard some good things said about Xero but for me I like QB's and it suits me at the moment. What do you mean that the 'marketing includes the value proposition', can you spell it out in leymans terms please? I'm sure there are others who would like it spelt out. (sorry not having a go).

I agree you don't need to take on every client, but sometimes you just don't realise how bad a client is until you have started working for them. I had one of these last year, all started off well, he failed to tell me that he hadn't seen his accountants for a long time, so I phoned them to ask them about his year end stuff, next thing I know they have given my number to the Baliffs, and I get a phone call from the Baliffs, telling me all about his debt problem, which incidently he doesn't realise he has!!!! Luckily he has paid me for everything I have done, and I have stopped working for him, as theres a high possibility he will go bankrupt very soon.

So although sometimes we would like to pick and choose it doen't take much to pick totally the wrong client.

kjmcculloch83 · Expert

To be honest Bob, the 20p per transaction does cover direct wages and overheads (my overheads are very low). I accept that receipt bank works well with Xero, but we use QuickBooks mainly now, so still a bit of duplication. I'm more than happy to employ technology when it helps me, but I think there can be a bit of employing it just for the sake of it.

I kind of agree with you Amanda, some clients like to abdicate the work, and you'll never change that with many, especially the trades. There is still a place for the traditional 'bag of paperwork' bookkeeping, and I suspect (even though I don't do it) hourly fee bookkeepers.

Kris

BobHarper · Guru

@Kris - there is a place for the bag job and hourly fee bookkeepers/accountants, I just don't believe it gives the provide/clients the optimum return.

kjmcculloch83 · Expert

no, and I didn't say it did. But at the same time a large part of the industry works with these clients on these terms and this wont change overnight. If the provider and client both agree to these terms then it works for them.

kjmcculloch83 · Expert

Possibly, but I don't see it happening, certainly not in my working life, and remember I'm only 29.

I think there will remain a place for both traditional and progressive within the industry.

Shamus · Forum Moderator & Expert

lol.

with the true belief that new is always better eh Bob.

The issue with examples using random figures yet quoting statistics as facts will not transfer well to reality, Readers need the promised improvements as facts rather than simply a wet finger in the air.

How will anyone ever force a client to change. You can coax them to alternate ways of doing things but they will stick with it only where they feel that the sale was genuine and the promises are reflected in the new reality.

Whats the old saying... You can lead a horse to water but you can't make it drink.

There is no pending revolution. The bag of receipts will continue to be common for as long as people start micro businesses.

Accountants and bookkeepers will always base their charges on their time as that's the way clients think... Which of us have not justified a quote as "well, that's going to take two days to sort out" (insert your own time frame over the two days line). In saying that you are linking work to a timeframe.

However, please by all means tell all of your clients that they need to be scanning their receipts as I'm sure that all of the dinosaur bookkeepers and accountants on this site such as myself are always happy to take your clients off your hands for you :)

Sure that the comeback on that one is the belief that it is we who will be losing clients. Tell you what, lets revisit this thread in ten years and see how each of us fared with our respective approaches.... Of course, by that time Crunchers may have moved on to being something comletely different from what they are today.

Shaun.

BobHarper · Guru

@Kris - my father is consulting in his 70's so you may have another 30 years to go. Do you really think paper bag jobs will be around then?

My vision is a sales invoice from one company being sent electronically to another becomes the purchase invoice. And, business debit cards that send receipts/invoices direct to your bookkeeping system.

@Shaun - there is no need for clients to scan receipts to use Receipt Bank.

I don't know how long it will take but I'm not so sure that the bag of receipts. The economy is moving to less cash, there are new rules for cash accounting for tax and bookkeeping/accounting technology linking to bank accounts. Change happens faster than ever before so it will be interesting to see where we are in 10 years.

Don Tax · Expert

Seems to me that the dispute is merely one of timing.

All here know that technology, from windmills onwards has been labour saving. The question is: what do these services offer now to our small business market? Put another way, what fields and entries require no intervention? I can simplify by uploading bank statement data but are 1-2 day jobs worth inaugurating a further system for the 10% of fiddly cash bits?

As of now, I still need to go into each bank entry to change :

Add the VAT field amount
Change Narrative/Description from "Card Payment to Acme Stores" to more specific
Change auto wildcard nominal code say 'OF' for fuel overhead

So, even something as straightforward as bank uploads doesn't save me much time right now. Will Xero/Kashflow etc do the above for me?

I can't see the argument here although my 14yo system is due for improvement.

kind regards,

Tim

AMajor · Veteran Member

On the face of it services like Receipt bank seem to work like this:
- the client gives you the trusty bag of receipts etc as usual
- you send them to Receipt Bank
- Receipt Bank scan them
- they either send you a spreadsheet or it integrates with your online accounting software

There would still need to be a check that the data is posting to the correct parts in the P&L etc but the majority of 'data entry' is done for you. So I see the potential for streamlining the way bookkeepers usually work - me included. I am certainly going to give it a trial but not at my clients expense.

I've been a huge fan of QB for several years. I've used SAGE although not a big fan and QB was always my preferred choice. Having used Xero for the last two years it really does change the way accountants, bookkeepers and clients work together. My clients love it! The 'bank uploads' Tim mentions are done are daily bank feeds automatically which makes reconciling so easy. Bank Rules can set criteria to remember repeating transactions so remembering to change the vat field, nominal code etc can be done for you but there are lots of other benefits to using Xero. The company are really forward thinking and are constantly innovating. They do product releases every 6-8 weeks which QB or SAGE would find hard to do.

I am now converting existing customers and encouraging all new clients to use online accounting software, in particular, Xero. If you haven't seen it, have a look at the short videos on their website

Shamus · Forum Moderator & Expert

I appreciate what you are saying Angie but the idea of a new product release every 6-8 weeks does not sound to me like a selling point but more a reaon to avoid like the plague.

Can you pan that one out a little please.

Are you saying that they are releasing new features all the time, corrections, just changing stuff constantly? Bookkeepers are looking for stability rather than constant change, although genuine improvements on an annual basis are no major issue that's about the maximum software learning curve that most people are willing to accept.

Also, in your Receipt bank process list it mentions "You send them to Receipt bank for them to scan"... How do you do that? Are you putting all of your clients irreplacable receipts in the post to India or do they have UK representation which would explain their apparently high price of scanning (30p per receipt).

Do you also need to factor in photocopying every receipt before sending it and if you are doing the photocopying why not just simply do the scanning for them.

Back to the 30p per receipt. I'm not fast but I would say that I can comfortably enter 2 receipts per minute (thats erring on the side of caution there), so lets say on average one can comfortably enter 120 receipts per hour which is 120 * 30p which is £36 per hour that is being charged.

I had a company on the phone a few weeks back offering 12p per receipt and again I'm thinking that they are charging £14.40 per hour for low skilled scanning work in a low wage part of the world which is too much.

If it works for yourself then I wish you the best but it seems to me an expensive option even over employing someone in the UK to type in the data. And of course, using that option there would be no risk to one's clients documentation from two not particularly dependable postal services.

kind regards,

Shaun.

Don Tax · Expert

Right, thanks Angie - been grimly hanging on to beloved software even though not the most sympathetic to bank data.

The 'Bank Rules' sound convincing for revolution instead of the incremental change I've been holding out for. I'll have another look at the videos.

best wishes,
Tim

Don Tax · Expert

Mornin' Shaun, the argument does then seem to be about scanning services like Receipt Bank rather than electronic data per se.

Kris, it's a let-down about washing and hoovering robots and I could do with one to iron these petrol receipts :o)

Shamus · Forum Moderator & Expert

Howdy Tim,

quite.

If someone came along to me and said we could make your life easier and increase your profits with zero risk then if they passed my punching holes in their business model tests I would be quite happy to consider using their services.

The receipt bank approach does seem to be a bit of a proverbial cullander when it comes to finding holes though.

I've seen this so many times where someone comes up with a new idea but doesn't think through all of the implications... And talking of RTI... lol

kjmcculloch83 · Expert

I'll be honest with you, guys, I did trial Receipt Bank. The service seemed fine. The turnaround was a bit slow, but they seem to scan the receipts then process them in batches. I imagine this is to save money. The accuracy was good, but I thought the cost was a bit high.

I did then call other scanning services in the UK who could do me a better deal, but to make it work I'd have needed the majority of my clients to part with on average an extra £20 per month, this is the point it all fell down. Very few could see the advantage to having their paperwork scanned and not having boxes around.

My point is really similar to yours Shaun, that if technology or a service can lower my workload and/or increase my profitablility then I will look at it. What I wont do is jump on the bandwaggon of every fad to come along. How long has it taken me to say yes to some form of cloud software?

Kris

AMajor · Veteran Member

The product releases are because they are continually innovating, not because of bugs or fixes. They are listening to accountants and bookkeepers about what they want included. They are offering partner webinars and certification training to make sure users can benefit from the changes and continue to learn

Today's product release is online invoicing for example; you have been able to send invoices and statements by email since the beginning but online invoices means not only are a customer sent a PDF attachment they also have a link to the invoice online. What this does is show in your accounts receivable that not only has the invoice been sent, it has been received and read (so no excuses it got lost in the post...) and also if your client is also a Xero user they can actually download that invoice in to their straight into accounts payable without having to enter it manually.

That's just one example.They've had an app called Xero Touch available for iPhone & iPad users for a while. They're adding bank reconciling as one of their updates in the future as well as extending the app to other mobile phones.

On the Receipt Bank note, I haven't used it yet - was going to give it a try. smile Yes they are a UK company - I met them last week at the Xero Conference as well as other Add-On Partners

Tim, The way the bank reconciling works means you can also add any transactions that are in your bank but not in Xero - at the same time as reconciling the item. I'd certainly vote for a robot that irons receipts too biggrin .

BobHarper · Guru

I am writing a report/whitepaper and this includes the impact of technology, which is making us ever more efficient.

The research from the 2020 Group shows that accountants are three times more productive than 15 years ago. From my experience (first hand as well as speaking with bookkeepers/accountants and trainers) new systems can save 40% to 60% of the work.

This means (because of a profession based on time based billing) that we will all need more clients to maintain fee levels. This will makes us more competitive, which drives down prices until it is a very low margin game.

Don Tax · Expert

AMajor wrote:
.......................Today's product release is online invoicing for example; you have been able to send invoices and statements by email since the beginning but online invoices means not only are a customer sent a PDF attachment they also have a link to the invoice online. What this does is show in your accounts receivable that not only has the invoice been sent, it has been received and read (so no excuses it got lost in the post...) and also if your client is also a Xero user they can actually download that invoice in to their straight into accounts payable without having to enter it manually.
    Hi, that's a nice feature but just had a look at the price page and IMHO 5 invoices and 20 transactions are not worth changing a system for.
Tim, The way the bank reconciling works means you can also add any transactions that are in your bank but not in Xero - at the same time as reconciling the item.
   That's a 'must' Angie for cheques not yet torn from the cheque book or in the pending tray etc etc.
   As there isn't a fee for say 200 bank 'lines' and 50 invoices then it will cost £19 p/m. This would be a new fee as our bookkeeping software has cost about £20 p/a since 1994 with no annual licence and unlimited clients and work stations.
   Obviously, not the same functionality but I think Xero is a case of attracting suitable new clients rather than trying to convince present ones.
best regards,
Tim

Shamus · Forum Moderator & Expert

BobHarper wrote:
I am writing a report/whitepaper and this includes the impact of technology, which is making us ever more efficient.

The research from the 2020 Group shows that accountants are three times more productive than 15 years ago. From my experience (first hand as well as speaking with bookkeepers/accountants and trainers) new systems can save 40% to 60% of the work.

This means (because of a profession based on time based billing) that we will all need more clients to maintain fee levels. This will makes us more competitive, which drives down prices until it is a very low margin game.

I feel that a white paper would only useful if those writing it do not have an element of self interest in the conclussions reached. If they do, then even an unbiased report will only ever be considered as marketing material by tthe intended audience.

Saving 40% to 60% of one's time should not mean that you charge less even though you have more margin to play with. However, I think that what you are saying is that if others pass on this saving then we will be forced to do the same or lose clients.

Thats a battle that can never be won as larger firms have the resources to operate at less than cost in order to fund a sustained campaign to drive out competition so no matter how much one works on closing the expectation and efficiency gaps such effort is ultimately futile unless one has the reserves to fight which I doubt if many of us (Crunchers included) have if ever it came to facing off against mid tier firms with an eye for our client bases.

Actually, with some of our clients we might actually pay fiirms to take them away (or they might pay us to keep them!) but I think that you see what I'm saying about how little practices such as ourselves can not use cost leadership as a strategy which leaves us with differentiation based on quality of service over price.

With cost reduction strategies a good example using the same principle would be the likes of that which a certain famous video rental company employ. Basically, move to an area, use a low price strategy to force the competition out of business, raise prices higher than the prior incumbants charged in order to recoup the losses born in the campaign to destroy the opposition.

Differentiation is somethng measured in qualitative rather than quantitative terms such as how the client feels about the relationship to their bookkeeper or accountant. As such, there is no overall right or wrong approach, there is only what is right or wrong for your business rather than any magic one size fits all sollution.

For some I am sure that the likes of receipt bank will work. I am not currently seeing it for my business and also if I did deal with a company providing this sort of service it wouldn't be one that works from a mailboxes etc. po box with directors with a string of disolved companies behind them.

HendyPhilhendy · Guru

I have been meaning to try something like receipt bank but have never been confident that it would work accurately and at a genuine cost saving to getting someone with experience to input the information for me.

I would be interested to hear if any others have used it effectively.

I am definitely one for technological innovation if it genuinely improves efficiency and cost.

Shamus · Forum Moderator & Expert

AMajor wrote:
Yes they are a UK company

How can you be sure?

The company is a UK company run from a Mailbox.

Where is the real business behind that one?

AMajor · Veteran Member

Shamus wrote:
AMajor wrote:
Yes they are a UK company
How can you be sure?
The company is a UK company run from a Mailbox.
Where is the real business behind that one?

I have actually met them Shaun - British people who won and Add-on Partner award at Xerocon last week. Sarah lives in London.

I don't know them personally of course!

kjmcculloch83 · Expert

Given what you have said Shaun, i had another look. I will no longer be even concidering using their services. Thanks.