3-minute read As businesses focus on revenue-generating tasks, they tend to forget one vital activity that can further scale a business: bookkeeping Bookkeeping is often overlooked in businesses because it is mainly compliance. What most entrepreneurs don’t know is that this offers vital information that can scale a business. For accountants, bookkeeping plays a very important role in providing financial advice. The data they can acquire from bookkeeping can provide helpful when:
- Evaluating business performance
- Budgeting and obtaining bank financing
- Pitching to potential investors
- Preparing financial statements
The Business Case For BookkeepingAs important as bookkeeping is, many accountants prefer to do away with this because they feel it is “crappy work.” It’s time-consuming. With the huge workload they already have, accountants prefer not to do this anymore. This strips them of time which they can use to provide more client-facing services. They no longer have time to check in with clients (personally or through phone calls), interpret and analyse data to formulate sound financial advice. And since it hasn’t been traditionally a core accounting service, many accounting firms miss out on the immense opportunities bookkeeping can offer:
- Build a trusted relationship with the client. Because bookkeepers are always talking to clients, they are able to establish a solid relationship, which is vital in improving client experience and, in the long run, keep the business.
- Fence off clients so they stay with your firm and avail of the services you offer. Since you are in control of the relationship because you are doing both bookkeeping and accounting. This will translate to more revenue.
- Increase the number of referrals, which also means more profit for the firm.
- Extend business growth by adding more services, like marketing and other administrative services.
- Enhance efficiency. Through automation, firms can easily transfer compliance to an offshore team, leaving the onshore staff with enough time to focus on client-facing tasks.
- Generate as much as four times the fees you usually make. Businesses that offshore bookkeeping services stand to get more out of their investment because the wages in countries like the Philippines are significantly lower. Firms can have four offshore team members for the price of one onshore employee.
- Earn anywhere between 5,000 and 15,000 per annum per client.
- Most importantly, build a sustainable global workforce.
- Set up accounting systems
- Record transactions
- Perform checks and reconciliations
- Handle payroll and compliance
- Provide general administrative support
Building A Profitable Bookkeeping DivisionFirms that are experiencing compliance issues can turn to offshoring to get things done. Bookkeeping can be transferred to a global offshore team, leaving onshore accountants with more time to concentrate on revenue-generating tasks.
By partnering with firms that specialise in bookkeeping or building their own bookkeeping division, firms can add an additional stream of income. Having a bookkeeping division (or working with one) offers the following benefits:
“It’s not about replacing bookkeepers. It’s about how to partner with a bookkeeping business and how you drive additional revenue to your firm.”
- Enhance trust with clients
- Firms are able to take control of the relationship because they are handling both accounting and bookkeeping
- Firms have better chances of retaining clients
- Firms will improve capacity and enhance productivity
Increase Margins By Offshoring Bookkeeping
- Building a bookkeeping division can give you a 50% margin (or more)
- Most bookkeepers earn more than accountants ($5,000 – $10,000)
- As technology continues to evolve, firms need to evolve their services
Impact Of Automation On BookkeepingAdvancements in technology have drastically changed the world of accounting. Various software and applications have made compliance easy. Accountants are now able to free up time and provide real value to their clients. But there might be one concern from these professionals: will automation take away jobs from accountants and bookkeepers? Interestingly, it won’t. It’s just a matter of adapting with the changes. Automation will enhance the workflow. If anything, it will improve the way accountants do their jobs. There’s no reason to be afraid of losing jobs to robots.
- Robots cannot replace accountants
- Productivity can be improved by automating small, repetitive tasks
- Automation can enhance efficiency, reduce partner hours, improve cash flow and revenue and offer additional services
ConclusionBookkeeping is a vital process in running an accounting practice. It is profitable when done right, which is why firms need to either run an in-house bookkeeping division or partner with one.
- Through bookkeeping, accountants can have the information needed to come up with financial strategies
- Bookkeepers have become the trusted advisor because they are in constant contact with clients
- Bookkeeping can improve compliance, enhance efficiency, and double profits
- Bookkeeping is essential in retaining clients
- Embrace automation to get the most out of bookkeeping
Looking to scale your business by getting the right people to do specific roles? Call our global team specialists at 1300 896 522 or click here to download our blueprint on how to build a global accounting team.