Daily bookkeeping can benefit both your clients and your practice.
From more money coming in for your business to better insights that can help your clients’ companies thrive, it’s definitely worth exploring.
In this article, I talk about the power of regular bookkeeping and reasons for you to provide this service at your practice.
Here’s what I cover:
- Using tech in the right way
- The power of bookkeeping
- Why you should put daily bookkeeping on the map
- Final thoughts
The Human Firm
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Using tech in the right way
As accountants and bookkeepers, we’re blessed by the technology that powers our ability to deliver hugely valuable insights to our clients.
Of course, the same technology ensure business owners have the same power at their fingertips.
But tech alone is not enough.
In The Human Firm, I talk in depth about the need for us to ensure we are using the technology in the way it was designed.
When you’re using AutoEntry to get regular data from clients and bank feeds hitting your general ledger on a daily basis, for example, why wouldn’t you turn that data into insight on a daily or weekly basis?
As a long-term advocate of daily bookkeeping, as part of the work on The Human Firm, I had the opportunity to talk to a friend of mine, Kenji Kuramoto, to add another level of insight into the power and importance of bookkeeping.
It’s great to be able to reshare some of the conversation that we included in the book here.
The power of bookkeeping
Kenji Kuramoto is the founder and CEO of Acuity, a firm offering bookkeeping, accounting and finance services (among other things).
Below, he talks about the need for good quality data, and how that springs from daily bookkeeping…
Kenji says: “When I founded Acuity about 18 years ago, the mission at that point was to go and serve high-growth innovative entrepreneurs with their accounting financial function.
“Specifically, the way that we were doing that was providing advisory services.
“A lot of CFO level services initially, but we always had a heart for helping small businesses and entrepreneurs. We identified rather quickly that doing the accounting – doing financial work – was their single least favourite job.
“There was not a single entrepreneur out there that said: ‘Oh, I can’t wait to do my own, accounting and do my own financial work,’ as part of becoming an entrepreneur.
“So we wanted to step in and fill that gap and help them.
“We launched in Atlanta, Georgia, here in the United States, with all of our team members working in-market.
“In our small universe, we were really grateful when we saw the emergence of cloud technologies. Fortunately for our firm, our number one client base has always been the technology companies, software companies.
“So, just by the fact that we serve software companies, we are immersed in tech.
“Our clients expect us to use tech.
“So, when we started seeing little bits of innovation in the accounting space we realised there was plenty of possibility.
“Almost 10 years ago, we embraced the idea we could expand that market beyond just Atlanta. We thought: ‘Well, we don’t have to get on site to their physical office. Through a cloud platform we can get in and serve clients anywhere.’
“So we started developing a greater depth of services alongside the recognition of the emergent cloud software.
“We moved from being just a CFO advisory firm all the way down into bookkeeping.
“Some of our CFOs on the team and friends of mine who were Big Four looked at me like I was crazy and said: ‘Why in the world do you want to go do bookkeeping? That’s just the lowest level work!’
“To be fair, I also was not very sure about this. I thought: ‘Wait a minute, I myself am a Big Four alumni. I’ve been CFO of a tech company. Why am I interested in bookkeeping?’
“But we saw so many challenges not going down that road.
“When the underlying data wasn’t good we couldn’t get to our higher level advisory work. We just couldn’t do it because the underlying data wasn’t sufficient to build financial models or pro-forma models or even to give sound advice to an entrepreneur.
“I think it was our decision to move into more transactional-level accounting and bookkeeping along with the emergence of the cloud solutions, that put us on the path.
“That’s why we saw our growth really take off.
“Before that time we’d been growing as a firm by adding a few new controllers or new CFOs per year.
“We had just grown bit by bit, probably in a much more traditional professional services firm model. Just in the same way as in an accounting firm you’d maybe add a new partner or someone would be promoted to manager.
“We saw a very different type of growth that was built around the emergence of cloud technologies.”
Why you should put daily bookkeeping on the map
In our conversation, Kenji summarised on so many levels the reasons why we must look at how we create great data through regular bookkeeping.
And that’s either by supporting our clients to do it themselves or my favoured approach – that we take it and make it a profitable service line for our firms.
By combining the right tech, people and process, we can make what was once seen as a low-value offering into a hugely valuable and indeed profitable service line that in turn opens the door to those value-driven advisory services.
Here are some reasons why you should be building your bookkeeping offerings right now.
- Better insights: Take control of the data quality to ensure you have information that can be relied upon for great insights.
- More client touchpoints: Daily/weekly bookkeeping creates at least 52 touchpoints a year for every client you serve. These touchpoints in turn create deep relationships with your clients.
- Higher profits: Bookkeeping done right is a profitable service line that leads to increased lifetime value from every client you service.
Bookkeeping largely continue to be perceived as low value.
Often, it’s seen as a means to an end. It’s the thing you do to prepare management accounts or a VAT return.
But it’s so much more. It is an end in itself.
If we accept this, we have to treat it with the respect and value it deserves and make it meaningful. And this comes with doing it regularly.
As a final thought, imagine if you’re employed as a bookkeeper of financial controller in a commercial organisation.
If you reconciled the bank account once a month how long would you keep your job? My guess is not very long.
Why therefore is it OK as an external service provider to think its fine to reconcile a client’s bank once a month or once a quarter?
See bookkeeping for what it is – make it count and make it daily.
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