Thanks Joanne

I am newly embarking on bookkeeping for clients, and wishing to get off on the right foot, my intention was to continue as I have done for myself and family businesses using VT and submitting to accountants at YE. However, I am very keen to embrace changes to cloud etc. and to set up a little simple to use system that I can carbon copy from client to client. My first potential client,and I know this will happen a lot, wants to use Xero, but I am at a loss as to what my role would be as he is very capable of entering his own data, has his own sales invoice system, reconciliation etc, and his vat is as good as done after that. Now as much as he doesn't want to put in the time he still wants to have his finger on the pulse, I have offered him my own cloud solution dropbox or google drive but this leaves him feeling like he is too much in the dark from day today (and understandably so too)

The conflict here is that he wants to maintain his management accounting and wants me for his financial accounting (that's how I see it anyway) however this ultimately means we are doing everything twice. Where is the middle ground here. I can see how Xero looks very attractive to him, but I see this as a tool for the business owner to replace the bookkeeper.

Thanks again

Hi Wyn
Sounds like you need another discussion with him to determine exactly what he wants you to do, so that you arent both doing the same job. He clearly isnt ready to relinquish control - understandable from what sounds like a business owner who has been doing it all himself and has been close to the numbers, plus a lot of people do find it hard to actually delegate. So its getting to a point of the best of both worlds for him - taking that burden away from him to free him up to expand the business but providing enough information to him to be able to see his key drivers and ultimately that management info. What might be an issue is that he keeps the system up to date daily so gets immediate useful information from it, but you may only update it weekly or fortnightly or whatever so immediately he will have a time gap which he needs to understand (otherwise he will be looking at false information) - that is regardless of whether you use xero or VT ro any other software. Does depend on exactly what information he wants and when. There seem to be more questions than answers at this point. Is he expecting you to update his sales invoice system or as I suspect just move that into the accounting software? Why has he chosen xero specifically? Does he understand the limitations as mentioned in that thread I sent you (best advice needs to cover that). Ultimately if he wants to use xero and its your first client then let him purchase it (ie pay monthly) but include you as a user (check this can be done via xero). I wouldnt suggest that you set yourself up on their Accountants/bookkeepers package until you have tried it out for yourself.

Hi Wyn
Its all about managing expectations and knowing what their priorities are. If he is happy with his monitoring of sales via his other system and getting creditor reports is his next priority then I would ensure that perhaps extra focus is placed on keying purchase invoices before anything else and ensuring the statements are checked early after month end for example. A lot depends on volume versus how often the paperwork is made available to you. Plus of course whether you get it all in the first place. Clients dont always tell you what is a priority for them straight away but will soon articulate their requirements, but its always better if you can get this at the outset of course.

If a client is happy to process the sales invoice, purchase invoices, bank transactions, reconcile everything and do the VAT then regardless whether they are using Xero, SAGE, VT or an excel spreadsheet to maintain their accounts they are doing the bookkeeping so dont need a bookkeeper.

At the end of the day if the business grows then the bookkeeping requirement grows and the client needs to decide whether they are better spending say a day a week or  maybe more doing the books compared to running their business.  Before the bookkeeping might have only taken an hour or so a week so therefore not as big a commitment.  This is where a business needs a bookkeeper as effectively you are delegating something to someone else as you can earn more money from your time running your business.

Its like me, when I started out I did everything from doing all the clients work, to doing the admin, to doing the social media work, to updating the website etc.

Now with over 200 clients I have two employees and one associate who do all the compliance work (I havent done any actual accounts work in ages), have an admin girl doing all the admin work, have outsourced the social media/email marketing/google adwords maintenance to someone who does this day in day out, have outsourced maintainance of website to someone.

As my time is now taken up reviewing files, meeting clients, meeting potential clients, dealing with emails from clients etc.

 

Im confused (doesnt take much after today!) - is his existing bookkeeper leaving? How does he access that information on a daily basis now? (Does he just look at quickbooks?) I am guessing that he isnt talking of running two systems in tandem (just thought I should say it as you never know!). Are they trying to keep the books in excel or are they just using this process to data dump into quickbooks? What exactly do they have in excel now? Sorry for lots of questions. I ask about the data dump as I had a customer who produced ALL of their sales invoices direct on a piece of bespoke software so it was exported from their system and imported into the accounting software (happened to be sage!) via excel. So they werent doing everything twice but utilising different software for different things and pulling together into the accounting package.

If all that is needed is entering the purchases and CC expenditure into bookkeeping package then should look at Xero and link up with Receipt Bank to get the purchase invoice processed.  For the CC set up a bank feed to get the credit card transactions downloaded into to Xero and then allocate.

Seems unnecessary work to input into a spreadsheet then send to bookkeeper who then inputs in the books.

If he wants a daily update then he would need to send things to receipt bank daily but most businesses expect payments after 30 days so no need for that.

Get a folder in the office and when invoice comes in he approves it as valid then goes into the "to be sent to receipt bank folder" that can then be sent to receipt bank on whatever basis needed whether it be weekly, fortnightly or monthly.  As well as sending by freepost the invoices can be scanned, uploaded by phone picture or the supplier can send directly to receipt bank to be processed.

Receipt bank will take a few days to extract the data then it can be imported into Xero.  Ready to run a creditors aged list and reconcile against bank and credit card statements.

If you dont use something like Xero and Receipt Bank then there will inevitably be manual processing to record the transactions.

 

 

Pennant wrote:

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Hi Joanne,
Yes he is wanting to move away from the current bookkeeper. He records all his purchasing movements on his own excel this is forwarded to the bookkeeper monthly with all pdf's of the invoices, he never sees the quickbooks side of it. i am not certain how this data is imported to quickbooks but he is as good as paying for it to be manually entered. He also has his own bespoke software that produces ALL sales invoices, this part will have to remain as its an adminless process and all the staff produce their own invoices, I am happy with receiving a report for this part as long as I am able to sufficiently reconcile it to the bank. All we really need to achieve is for all the purchasing invoices and CC to be entered into a bookkeeping system (I would like this to be VT) so that I can do his vat and YE for him, but if he doesn't enter it all into excel first he wont know where he is at with regards to who to pay, for what, and when. A cloud system maybe the answer for him but then as I said earlier he would have to end up doing it all, also he's not confident on vat rules etc so is often unsure of the correct treatment, and of course that's what bookkeepers are for. Sorry for dragging this out.

Wyn

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Hi  Wyn

I assume someone from the company will still be able to supply pdfs of the purchase invoices (via dumping them in eg dropbox for free so you manually upload or something like receipt bank as Mark suggests - this he will need to pay for so he will need to factor that in, but its that versus your time).    

If someone is still dumping them into excel which is sent to him, then I can see no reason why you cannot dump that direct from excel into an Accounting package, rather than manually key each  one.  I would suggest you still have access to the pdfs - sense checking, but also as you might need to add a couple of extra data lines before you do (quite easy if you can double screen!).   Although from what a few peeps on here tell us - receipt Bank is quicker! 

Consider getting the PDFs weekly rather than monthly if possible then input them into whatever software and you can supply a creditors update weekly to him - surely that would be sufficient in whatever manner.  You can use his existing software ie quickbooks, if he let you have access to it and at least then it has all the back history without having to extract the data.  Just load the software, do a restore from a backup at their place? Maybe try this for a week and see if is happy with the reports you get off the system.  (Maybe even do a data dump from this into VT and show him those reports to see if he is happy using that.  Then if he isnt happy with it, consider use of xero or another cloudy one.  

I would suggest you get read only access to his invoicing software so if you have any queries when it comes to matching against Bank payments then you dont need to send a pile of questions.  

Plus Bank feeds OR if you cant do that - I would suggest xl copies of Bank statements from online Banking (and maybe PDFs so you can sense check the balances/that someone hasnt been tweaking  things before its sent to you, or just PDFs and then looking at pdf to excel conversion software - post on here by Shaun recently is worth a look).

Any of the software products will allow you to get information across to the Accountant to complete the accounts/CT returns etc. 

The only advantage I see in xero is the visibility  - if you can give him that via his existing software or VT then he will be happy.  But he does need  to understand that he will no longer have a day to day view but perhaps a weekly one. 

I think that you hit the nail on the head Wyn.

Software companies are businesses.

If you have a market of (say) 1m potential businesses or 10k bookkeepers which market are you going to concentrate upon?

From our perspective the cloud offerings are shoddy when we compare them to our desktop offerings.

From the business owners perspective they are using the software for just one business and it gives them features that the desktop does not such as running their business from their phone.

It would have been relatively easy to develop desktop solutions linked to apps but that was not the way that companies such as Sage and Intuit have chosen to go.

There is no question that the software is being developed for the business owner in order to replace the bookkeeper. I don't believe that there is any animosity towards our profession just simply that the software businesses that we are dependant upon make (much) more money by concentrating their resources elsewhere and we are seen as an acceptable casualty.

At least I know that my beloved VT will be fine as you are right, there are many, many different cloud offerings and whilst some (I'm looking at you specifically here Xero) have really shoddy financial statements, they all produce trial balances and that is so easy to port to make a real set of fonancial statements.

A close freind of mine commented to me earlier today that they had read on here about bookkeepers charging more to work with cloud software... Their comment (one that I would have been proud to come up with myself but cannot in this instance claim authorship of) was that such was not payment for increased expertise but rather increased compensation for having to work with that shit (that's not word for word but it reflects the sentiment).

I do not think that the cloud is a move forwards for us but suspect that it is something that we will have to learn to work around as more and more smaller clients do their own bookkeeping.

On the bright side, whilst some clients will no doubt get it right there are going to be far more complete f**k ups and we always make far more money fixing them than doing peoples books from scratch.

Every cloud has a silver lining and all that.

You are a very wise man indeed John.

Oh! well, at least it's inspired my avatar!

Hi Joanne

Two thirds of your time is spent clearing up the mess made by business owners doing their own bookkeeping? That's astounding! I can believe it because I was one once, but I thought I was in the minority, I could only see that all companies and businesses around me were being highly organised and I wasn't.. Really though, if that many businesses are needing mopping up does that not show that the 'grow your own' bookkeeper isn't a keeper?

If I were a tradesman or the like, I'd love to see my accounts in real time, whether that be on my phone / tablet / computer.

Whether or not that is because I obviously have an interest in accounts is another matter :p

Whatever they wish to use, we use, else they go elsewhere.

There is always the biological theory - those who adapt to change thrive, those who don't die. Not word for word. - Charles Darwin -

abacus12345 wrote:

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If I were a tradesman or the like, I'd love to see my accounts in real time, whether that be on my phone / tablet / computer.

Whether or not that is because I obviously have an interest in accounts is another matter :p

Whatever they wish to use, we use, else they go elsewhere.

There is always the biological theory - those who adapt to change thrive, those who don't die. Not word for word. - Charles Darwin -

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 Trouble is - in the most part there are many constraints to the actual provision of information on a true  'real time'  basis, never mind (in)accuracy as used by the said tradespeople.  Great idea in theory.

If I did learn one thing from my past life (and I am desperately trying not to be too boring with meaningless analogies, honest!) is that when faced with options such as this, desktop or cloud, software or bookkeeper, it will never be a debate that will have a defining winner, there is no right answer, Tea or Coffee? of course its both, tea and coffee, tea for some coffee for others, sometimes even both. These are growing niches sprouting from changes created by technology and they really should all be embraced, This fire, unlike the frying pan I was in however have some great industry safety nets. i.e it wasnt a legal requirement to take photographs and have them printed, the big boys told the consumer to do it themselves at home, homeprinting is the way forward they said, the reality was very different, because ultimately the consumer decides, we, in the industry knew it all along, we just couldnt shout loud enough, we were just lots of little people with lots of little voices shouting at each other, I see great similarities between these two scenarios, only ten years apart.

There are laws and regulations for keeping business affairs in order, this alone should be enough to make any business owner realise that it needs to be done right by someone who knows how to do it right. Why arent we shouting this from the highest mountain together? The problem I think is that the likes of Xero and Sage, desktop or cloud will tell their market that the tools are perfect for doing the job, irrespective of the practicalities or that persons ability to do it (shhhh lets not mention that bit), just like the homeprinting message, or even the breadmaker,!! how many of us bought one of those and used it only once! Indeed New toys.


Take the worst-case scenario and the best-case scenario, the outcome will be somewhere in the middle, it usually is!


For me! I need a plan, where do I place myself in a market that has had, and is facing so many more changes, I suppose I am lucky in that I have a blank canvas from which to start from, and so am going to be cheeky and ask you if I may, with the years of experience that you all have, If you were to able to start afresh with a brand new business plan today, would it look any different to the one you had in mind at your beginnings?

Wyn

And that in a nutshell John is the cloudy gameplan. Complete replacement of the bookkeeper with a mobile phone.

I think at the moment its realised thats a bit of a utopian ideal but it is the end game.

Adoption assumes that everyone works in the same joined up sort of way by using the credit card roll out model... Do all of us accept credit cards? Do all of use use Smart phones?

There is no place it seems in this utopian ideal for the cottage industry bookkeeper who it seems must abandon their beloved micro business client base and look at SME clients which is a much smaller pool of potential clients.

Putting that into context (these figures are approximate)

there are 5.37 million businesses in the UK.
5.1 million of those are micro businesses (every one of them is a cloud software target)
53,700 are larger businesses (Big 4 and mid tier firms)
that leaves approximately 214,750 SME businesses (not exactly the sort of figure training companies want to bandy when trying to get people to part with their money!).

And look how Xero is being sold in that ad. To the business person addressing the things that they see mattering to them on a day to day basis. (can't knock the ad, its very good).

I didn't like the accountant as soon as I saw that they were using an Apple computer but that aside, the sales pitch is aimed at making it seem easy for the accountant to handle this sort of client whilst also plecating their fears that the accountant is in any way threatened by the new software as providers such as Xero whilst quite happy to throw the bookkeepers under the bus are looking at accountants as being a continued sales channel.

I need to ponder what we are going to do about this as I know that not everyone wants to be an accountant and many here are doing this role which is enjoyable to fit around other commitments where that industry does not fit at all in the cloud plan.

Unlike some others I am not seeing the end of desktop software although I am seeing it becoming more of a Niche market aimed almost exclusively at financial professionals as all of the concernes voiced by members here over speed of input, security, access, data held to randsom, etc. are very real to us but matter far less to end business users.

I thin of it like the engineer in a car production facility very concerned about the performance / longevity figures of a particular compnent where the cars eventual purchaser is only concerned about whether it gets them from A to B.

Cloud software gets business users from A to B. Its not as good as the software that we use but they really don't care and as there are 5.1 million of them and a few thousand of us, does anyone think that the cloud software companies care about what we think of their wares either?

So, also in answer to Wyn, I think that whatever our original business models its time to sit down and rethink them.

Cheshire wrote:

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Shamus wrote:

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So, also in answer to Wyn, I think that whatever our original business models its time to sit down and rethink them.

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 Re-thunk!!  lol.      Going back to Corporate is suddenly looking more appealing.

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 Can I come too...

Best laptop I ever owned was a macbook. Expensive, but sexy. Like alienware too, not quite the same, yet still. Most powerful PC is more a gaming rig, technology should be future proof for the next couple of years at least. Can now use Microsoft office on mac. Not VT friendly less you partition the drive with windows, for best effect. Apple is great for design and photography. Superb retina screens. Horses for courses.

Don't let things worry you too much. Essentially it is all the same. Changes here and there. We are all in it together.

I always think back to when desktop software took over from paper ledgers. Whether or not that is a fair comparison I'm not sure. Some folk like to play with Excel and give you their files, the cloud is just a pretty way of doing just that. Look at self assessment, again not entirely the same, yet, self assessment was designed so you could do it yourself, without any accountancy knowledge....people still pay for it to be completed. If I know how most people work it goes like this - ohhhh fancy new software, I'll have a play.....I'm bored now....where's my bookkeepers number.

My 2p. There will always be a need for bookkeepers. I would, as an oppose to ruling out the cloud, aim for clients who have larger businesses. A plumber may see the cloud as a solution, a shop keeper maybe not so. If a very small business decides to go with the cloud, full throttle style, then surely they are going into this, unprepared, and without the fair representation of a bookkeeper / Accountant. A few VAT visits will solve a few issues. There is no mercy for people there. If I was a sole trader working outside of this trade, I wouldn't want the hassle. I'd like to see my results in near real time though. If I wanted a new van or tools I could potentially see if this would be viable, without calling bookkeeper.

I have an update for this thread that I found interesting, in that the client in question came back after shopping and researching and having considered all options, his findings are that the 'do it yourself' cloud/software approach doesn't offer him or his business any beneficial solutions. Given that his business is building cloud solutions and web systems for his clients, and that should he wish, could build his own Xero etc.. to me is quite a welcome revelation from someone who I fully expected to advocate the technology. He is happy however to let me do it once in VT, clear and simple, he just need to let go of his favorite teddy and get used to small timing delays for the information he's unnecessarily used to getting instantaneously.

Good result Wyn. Thanks for the update.