With the 2019 announcement of Intuit bundling QuickBooks Online with a live video bookkeeping service for $200 a month, many accountants and bookkeepers might be wondering how they’ll be able to compete at such a low price point.
There’s plenty of advice out there about offering additional value added services, support, and consulting. Personally, my favorite is to become an expert in a niche. For instance, Chris Farmand’s accounting firm, Small Batch Standard, doesn’t get 40 monthly inbound contacts from breweries because he offers the most cost effective rates (which he doesn’t). He gets them because he’s the best brewery accountant in North America.
For this article I want to talk about how accountants and bookkeepers can, by using off-the-shelf technology, compete with a $200 a month bookkeeping service. Even if you go niche, you'll still want to utilize a strategy like this to maximize your own internal resources:
Step One: Kill desktop
Stop supporting clients on desktop software. There isn't anything efficient about it from an accounting or workflow perspective. And as soon as you have the inevitable "tech support" issues, (desktop applications typically need a lot of system maintenance and upgrades) your margin for that client will deplete quickly.
If you are thinking a “hosted desktop environment” solves these problems, yes, maybe it reduces some tech support issues. But I could argue it also creates new ones. If you combine this with the monthly costs of the hosting services, there’s no way you can absorb that cost.
Step Two: Move to the cloud
By using cloud accounting software platforms like QuickBooks Online, Xero, or Sage Accounting, you’ll be able to work more efficiently and have better visibility into your clients’ accounts. With all of your data stored securely online, you can access it any time, via your laptop or mobile device. Platforms like these offer built-in features including bank feeds, transaction rules, automatic matching and memorized transactions. The cloud accounting platforms listed above also enable third party apps to integrate with their software. This allows hundreds of apps to communicate and send data directly to these accounting systems.
Step Three: Reduce the variables
Make it a requirement that all of your clients use the same bank. A bank that you know integrates best with your accounting system of choice, and has systems in place for you to easily self-service your clients. At $200 a month, you can't afford time lost dealing with bank clerks or multiple bank policies and procedures. Debra Kilsheimer is the master of this practice.
Eliminate cash and checks, which can be time consuming to process and track. On the income side, only allow payments via credit cards, PayPal, Apple Pay and other systems that send the payment info into the accounting software properly.
On the expense side, pay for everything via a means that can post to the accounting system automatically, like credit cards that have a bank feed to the accounting system. Use automated bill payment tools like Bill.com or Veem for added efficiencies.
Use apps that you can implement across 100% of your clients, regardless of their shape or size. Apps like AutoEntry offer a credit based system that makes it easy to utilize across your entire client base.
Step Four: Own the accounting domain
Don’t let clients ever access your QuickBooks, Sage or Xero account ledgers. EVER! You don’t have time to fix errors if they make mistakes.
If they want to manage invoicing themselves, find a fairly priced app that can accommodate their needs. Just be sure that this app moves data to the accounting system properly. Remember, you’re trying to reduce work, not create more.
If your client needs to see reports, use a reporting app like Fathom (its Gold Plan can bring the price down to $14 a month per client). But at a $199 price point using Octoboard and its $5 a month plan per client may be a better choice. Better yet, you can use AccountsPrep, an AutoEntry feature, to automatically generate reports.
Step Five: Stop typing data
In your accounting system, set up rules for every transaction that comes in via the bank feed; set up recurring expense and bill transactions. And, for any sales transactions that can be memorized and automatically entered, do that too.
Use AutoEntry to get all paper based items (or emails) into your accounting software. You can upload or email all A/P and expense transactions to AutoEntry and have it auto publish into the accounting system. Have the client and their employees install AutoEntry to their cell phones so they can snap pictures of receipts that they need to be reimbursed for, allowing you to instantly approve reimbursements.
Use Greenback to retrieve and supplement transaction data from some of the larger vendors that are probably common across all your clients, like Amazon, Uber, Lyft, HomeDepot, and Delta Airlines.
Use Zapier to automate any other workflows that cause you to type data into the accounting system. For example, if the client still needs to write paper checks, create a shared Google Sheet for them to type the date, check number, payee, amount, and expense account. Then create a “zap” to put each line as a check expense transaction directly into QuickBooks Online.
Step Six: Tighten the communication loop with clients
If you rely heavily on email when liaising with clients, use email management tools like Outpost so your team can more easily track emails and issue ready made template responses.
You should also strongly consider eliminating email from client communications altogether. If this sounds of interest, Seth David wrote a great blog post on how to use Slack to manage client interactions.
Step Seven: Eliminate client questions (or charge more for them)
Sure, you want to support your clients as much as possible, but when you’re trying to reduce overheads, time spent answering questions can really add up and become a margin killer. Be clear with clients, that you’re charging them for bookkeeping only services.
If they have questions or want advice, offer a secondary plan (such as questions, access, or advisory plans) to tack onto your $200 bookkeeping service.
Making your bookkeeping services more competitive
By following the steps above, you’ll be eliminating the work you have to do for each monthly bookkeeping client. If you can eliminate all of the work, the majority of that $200 price point is all profit!
To find out more about how automation can make your bookkeeping service more efficient and profitable, why not try a free AutoEntry trial?