REASON 7/8 INNOVATION/TECHNOLOGY

We might have waited decades longer for mainframe computing, Lyons Leo for example - introduced to perform accounting and management functions. I suspect accountants were at the forefront of the mini/micro computing revolution in the 1970s, simply because machines calculate faster and more accurately.

I think that the reason is more likely to be that accountants can't afford mainframes.

The big boxes with the blue sides were much, much faster and more dependable than PC's.

When you say more accurately then if we're talking user programs then the quality of programming on Mainframes was for a long time much better than PC's with much greater emphasis on testing.

If we're talking operating systems then PC's have only recently started to catch up with the idea of multi processing and I still don't think that PC bods would have any idea about pseudo conversation processing as they have not been brought up to understand that processing power is a finite resource.

On the whole accountants being at the forefront you are right but in many cases it was simply because they were forcing through change for the sake of it and there were several high profile cases of accountancy and consultancy firms being sued for advising the move to mini's where such could not hope to keep up with mainframes.

The revolution to PCs though I feel didn't really start until the 80's.

Greatest mistake that IBM ever made.

These new fangled things will never catch on. I know, lets give chip development to Intel and software development to Microsoft.... Well, who's laughing now on that one!

@Don - I know that I've innovated technology by co-developing a bookkeeping package that sits between Excel and Sage but what do you mean by accountants being innovative?

A spreadsheet/computerised accounts hybrid?

What's it called? Sexage? lol.

BobHarper wrote:

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... So rather than arguing I'd suggest you look to understand and the best way is to read Ron Baker's work so you know what I am talking about. It is likely some BIG pennies will drop.

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Roughly £30 if Amazon is anything to go by... Significantly more if you buy the whole set of Ron Baker books... (let's all try and remember how this man makes a living... )

I really cant understand the current hype about value pricing, its just another form of price discrimination.  (I am sorry, I have not bought into the hype  )

There are actually elements of value pricing that are common sense (in my opinion, mainly the bit relating to fixed fees) but then I think even Ron Baker himself used to refer to it as "fixed fees."

There is plenty of info and advice from people/forums/books on all aspects of pricing and quoting.  Personally, I love that I am free to pick the bits that I think are useful and disregard the bits that I think might be erm, questionable... (I think that's where there can be no substitute for good common sense)

Personally, I agree with this bit:

BobHarper wrote:

Clients/customers buy expectations and they pay for good feelings and solutions to problems, they do not buy hours or want to pay for your time...they want the result.

But I also agree with this bit

kjmcculloch83 wrote:

So all in all, a very good case for fixed pricing, with a small amount of mud slinging built in.

I think if anyone is interested in value pricing, they should read about the subject from a couple of different authors/speakers etc and then be prepared to disregard at least 50% of it as marketing hype.  (I must be getting cynical).

@Bob, but if clients used software properly there would be no place for Bookkeepers!!!

Most of mine don't know how to turn on a PC let alone do anything else with it which is why they use me. I can understand what you are saying getting clients to use modern technology, but some types of businesses especially tradesman when they come in from a long day and quite a physical day they are not interested in doing their books. ITs the same as I wouldn't be interested in bricklaying or how to plumb a toilet in, I would employ someone to do the job for me.

@Shamus
LOL, yes, 50% is probably pushing it. I must be feeling generous today

I think all these books/theories etc... should carry a warning not to swallow the contents whole.

@Amanda - check out Receipt Bank.

@Louise - £30 is cheap for a lifetime of knowledge from a recognised leader in the profession but there are loads of free resources from Ron on his site.

You say disregard 50% so can I ask, have you read his latest book on Implementing Value Pricing?

@Don - I don't think I criticised accountants for not adopting technology but the question is how quickly?

Hi Tim,

you might enjoy this discussion :

http://www.accountingweb.co.uk/anyanswers/q-and-ron-baker/477754

Its a long one (4 pages) but I think comliments our discussion perfectly

I've only just got a new laptop with windows 7 on it, give me time to catch up please!

lol Mark,

I agree that we are in a transition period in the industry and as mentioned by Tim much of it is being forced through by the demands of HMRC (thinks iXBRL for starters).

One thing that does come to mind though for all this talk of fundamental change is when I first started working in industry in the late 70's I was told categorically that within ten years we will all be working in paperless offices.... Best part of 35 years later I still think that they could be saying the same thing.

My own view is that except for the HMRC driven changes, productivity enhancements will happen in small incremental steps.

I could be wrong. Wouldn't be the first time. But that's how I see change happening as by our nature we are a conservative lot and like to improve, ensure that works then improve again whilst aways being able to take a step back if necessary.

And on that subject I'm actually very interested to read your field report on moving from VT Accounts to the Taxcalc Accounts production package when you have it.

I love VT accounts but as you say in your other post, if all the bits were tied together with the tax package it would be somewhat better.

kind regards,

Shaun.

@Mark - some very good points but if bookkeepers and accountants don't change their business/pricing model they'll need to win 50% to 100% more clients to retain profitability. The only option to stay small and profitable is to add value and that is best done by adopting Value Pricing.

Cheers Mark,

The way my VT licence falls (April) I think that I will be renewing next year with a view to perhaps adopting a more integrated approach (unless VT go down that route) at around the following renewal date.

In Information Technology ten years is a lifetime and what we regard as cutting edge today will like as not be old school accounting by the time we get to where we expected it to be implemented (Look at the speed of roll out of chip card technology).

I do worry at how easy it is to make costly mistakes when it comes to adopting new software and always prefer to be a second wave adopter rather than cutting edge.

We are very much living in interesting times,

kind regards,

Shaun.

Bob

Stick to the pancakes.

As said on AWeb.  Lets see where you are in 5 years time with your value pricing model after it taken you 5 years to work out you had the wrong model.

If you have a thriving business with lots of people buying into your ideas then great you have found your niche and everyone on here and AWeb is wrong. (ok maybe 99%)

Though wouldnt hold my breathe.

As said above (or maybe it another thread), your postings provide some much needed light relief and humour. (laughing at you rather than with you) .

What I am saying is that I think that the role of the accountant will probably change in that a lot of the processing that is currently done will become automated.  Therefore accountants will need to look at the added value services to generate income eg tax planning, year end accounts submission work, succession and exit routes etc.  Unfortunately for a bookkeeper I think that a lot of the what they currently do will no longer been needed (probably not what I should be saying on a bookkeeping forum).  eg OCRex turns the posting and analysis of the bank statements for a year from a 1 or 2 day exercies to a 20 minute exercise.  I also think that clients will take on a lot more of the processing themselves as they discover cloud accounting and the ease to which information can be recorded.  There will always be those who "dont like doing the figures" and "dont know how to turn on a computer" but as time passes these types of business owners will diminish in my view.

How accountants/bookkeepers price for their work is entirely up to each individual whether that be fixed prices, billing based on time taken, value pricing or randomly picking a figure that seems in the ballpark of what is needed based on previous work and experience.  It certainly isnt for me or anyone else to tell someone else how to do this.

Regards

Mark 

 

Shamus wrote:

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Hi Tim,

you might enjoy this discussion :

http://www.accountingweb.co.uk/anyanswers/q-and-ron-baker/477754

Its a long one (4 pages) but I think comliments our discussion perfectly

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Hi Shaun, I'll confess I whipped through it but enlightening and a good laugh in places.   "Fined £5 for no time-sheet" lol.  Talk about carrot and stick, we were left a piece of chewing gum or not accordingly.

Some of the contributors there must have spent days on that one thread!  What do they put that down as ..... CPD ? lol

kind regards,

Tim

 

 

 

Having wasted some time (now and previously) reading all of the 'BOB' threads on Aweb I have come to the conclusion that Bob is actually a man with a fantastic sense of humour and has just been winding everyone up for years. He no more believes in VP than I do of little green men on mars. It's just been one massive joke, hasn't it? oh please tell me it has because the alternative is.... No, it's a joke.

Kris

Don Tax wrote:

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I think a contributor of that long aweb thread said value pricing was just a quote in advance - customised for each client.

Maybe the joke is we're providing the oxygen of publicity by posting on this thread at all. lol

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 This to be honest.

@Mark - yes, it will be interesting to see where we are five years but I am thinking 10-20 years for the real change to happen.

But, regardless of what happens to me it looks like all you guys are destined/happy to end up looking after more and more clients doing more of the same, unless the simplification comes in and removes demand. And, if that is the future I think www.crunch.co.uk will beat you hands down.

And of course now I'm even more confused about the link between Crunch and Crunchers.

I thought that it was just using almost the same name and little four colour icon. Now you are advertising them as the way forwards... Have you told the other three partners at Crunchers what your up to Bob? Barry doesn't look like the sort of person to upset

Anyway, don't you worry, we can keep a secret.... Now what would be the value pricing of that information..... RON.... .

BobHarper wrote:

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@Mark - yes, it will be interesting to see where we are five years but I am thinking 10-20 years for the real change to happen.

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It was my birthday yesterday, 38 years young, so lets rendevous again when I am 43 and we can see where you are.  Hopefully you not had another another change of direction by then and back to square one again.

All the best if you still intend to be working away in 20 years time.  I dont.

Regards

Mark

PS simplification is coming in.  Due to be an annoucement in the week or so as to how you can operate and report to HMRC on a cash basis if you are, broadly speaking, unincorporated from Apr 2013.

 

And we all know why they are bringing in simplification... So that people make mistakes and are charged penalties and interest on the back of that.

Penalties are worth a lot when it comes to small turnover businesses with little tax take.

Also of course your average business owner might think that they understand tax but they don't and they will pay more than they need to.

Although it won't be compulsory to use us I see no change in the number of clients that will. And those that do leave on the back of this I suspect will soon return.

You really believe that accounts and tax returns are all that we do? bless.

Even if it was, better to be doing that than speding our time beating the same old drum.

No, change is expected. I follow Porters five forces model to prepare myself for such.

For our own processes as shown in the conversation between Mark and myself we constantly enhance and improve on the back of tried and tested software and methods.

For regulatory changes such as iXBRL or RTI there will be a lead time after announcement in order to change our processes and procedures.

All of the time we develop professionally through discussion, networking, wide reading, etc.

Of course every change myst be evaluated for its claimed merit.

Some are rejected as they fail our tests.

Others are rejected because by comparrison to other solutions we just don't like them.

Sometimes what we have is better than the proposed change.

But sometimes we adopt new methods and software where we are convinced that such will benefit our business, our productivity and our clients.

From the conversations on various threads I have rejected the concept of value pricing predominantly because of the difficulty that one of its advocates has in explaining it.

It is not the only thing that I have rejected.

The Agile productivity methodology sits in the same waste bucket (and somewhere in the bottom of that basket Matrix Management is probably stick kicking around as well).

Simply accept that you have one view, others have another, live with it and move onto championing another concept as, as far as I can see on both Aweb and here Value Pricing has pretty much been universally trashed.

If its a method that works for you then good luck to you but as for myself... I think you know where I stand on the matter.

Shaun.

Bob made me do it...

I'll put Ron Bakers's book on my xmas list Bob! Whats to say that Ron Baker is correct in all of this?

Love that phase 'time is money'. I remember a place where I worked in my 20's and that phase was always used.