Has the starting gun been fired on the commoditisation of compliance?
Last week Intuit started a test for a new offering called Bookkeeping Live, where they plan to sell bookkeeping services bundled in with their Quickbooks product. A test, which I think will be the point that many of us in the future look back and realise this was the point where compliance truly became commoditised. This article takes what is known about this test, curates the industry commentary about the test, but also puts my views on the significance of this move.
Bookkeeping Live: What’s actually happened?
Probably the best article to read to understand what has happened with the announcement of their test of Bookkeeping Live and the widespread implication is Blake Oliver’s excellent article on LinkedIn.
In this article, Blake explains that Intuit are running a test to replicate what they do in the US with TurboTax Live where you can hire through them a CPA to review your self assessment tax return, with Bookkeeping. (TurboTax live is the market leading software for Americans to file their personal tax return. All US citizens need to file a personal tax return.) As Blake says in his article, “It’s TurboTax Live for bookkeeping”.
The lay person may be wondering what the big deal is about this test of Bookkeeping Live. Well for the first time, if this test is successful, Intuit will be competing directly with its own 50,000 strong channel of accounting and bookkeeping partners. No longer will you need to get your CPA or bookkeeper to set up your Quickbooks software and do your bookkeeping. You will be able to do this directly via live video chat with your own Intuit bookkeeper.
As many within Intuit have been keen to point and stress, this is only a test.
In his article Blake queries how much of a test this really is. After all, there is a job posting on the Intuit Careers Website for:
“A Group Manager to lead the Service Delivery function within our Small Business Professional Services team.” The Group Manager will be responsible for “delivering an outstanding experience for Small Business customers through our expanding network of Certified Bookkeeping Professionals.”
I agree with Blake’s views on how much of a test this really is. Yes, I believe they are testing the messaging, pricing and what services their own Bookkeepers will offer. But, whether this service gets rolled out in the short or medium term, it is coming. And if it isn’t Intuit, it will be someone else.
This is the direction of travel
In Melanie Power’s excellent rallying call to Bookkeepers she talks about Bookkeepers moving away from low-value data entry work. As she says:
who wants to be working for $25 an hour?
As Melanie says, technology is taking over the grunt work of bookkeepers, whether we like it or not. The message that has been coming from the cloud accounting providers is that bookkeepers need to change their business model and upskill. I completely agree with Mel. The time is now here.
If you have listened to any of the keynotes from the QBconnect or Xerocon main stage in the last few years there has been an over-riding theme of change, disruption and becoming the ‘trusted advisor’. The two giants of cloud accounting have been, in their own way, telling us that this is coming and you need to get your firm ready. They have also been providing great tools, such as QBOA and XeroHQ, for accountants to have higher value conversations with their clients. Conversations which enrich the lives of their clients. In a way that conversations about year end accounts and tax bills never really compare.
I’m not someone who is going to stand there and say compliance is dead. Of course it isn’t dead. You only have to see the amount of reporting a small business needs to do is going up. The UK is soon going to be joining Australia in making small business owners report quarterly not annually. But, what we are seeing is compliance IS becoming commoditised. As a business owner, I welcome the innovation coming out of the Fintech companies to eliminate manual entry, automate processes, and make it much, much easier to do the financial administration which is part and parcel of running a business.
What now for bookkeepers and accountants?
But as a business owner, what I value is the relationship I have with my accountant and bookkeeper. This relationship can’t be automated or commoditised. And that’s where, as Mel Power puts in her article, the magic work happens. When this relationship has broken down or been mostly delegated to a very junior member of team are the real reasons I have moved accountants across the ten years I have been in business.
But here in lies the problem. If it is the relationship which is going to help us remain in business and keep our clients, how many of us really have the time to invest in this relationship with clients? And are charging enough to justify investing in these relationships? This investment costs time to maintain a regular dialogue so our clients feel that we are accessible and responsive. Is now the time to start to trim down our client portfolios and up our fees to give our staff the time to deliver on the human element? The part that technology can’t replicate?