This article looks at the way cloud accounting services may have changed the accountancy profession forever.
Xero and QuickBooks are two extremely easy to use, heavily advertised and marketed SME accountancy solutions that can be operated by lay people with very limited accounts experience. Simple to use, connected up to bank accounts for instant figures, connected into VAT for instant VAT returns, and easily accessible by external advisers when needed, the software is quite effortless.
Not only that, but cloud accounting software also automates quite a few of the actions that may well have been done manually by bookkeepers and accounts staff in the past.
Take receipts – and using Xero as an example (mainly because this is the service we use ourselves). In days gone by if you wanted to post a receipt into your accounts software you would have to sit down, add a new entry, type in all the details and post it to the accounts. Not any more – Xero has a process where someone can take a photograph of a receipt, email it and it will turn up in the Xero software ready to be processed and reconciled against payments in bank accounts and on credit cards.
At the drop of a hat it is highly possible that these types of online software have automated an entire raft of semi-skilled white collar jobs at the level of bookkeeper, assistant accountant and accounts assistant. Roles are potentially obsolete. The software does the work so much faster. Invoicing is incredibly easy to do as well, and it can be sent directly from the cloud accounting platforms.
Instant Quotes and Invoices
Cloud accounting systems can be linked in to the various payment options including Stripe and PayPal, and everything can be operated from the software without anybody needing to move sums around. This means that invoicing can be done almost instantly, quotes can be sent out from the software and then turned into invoices without anyone doing anything other than the customer accepting the invoice, and bank accounts connected up to provide a feed into the software in order to be immediately reconciled.
Payment by bank transfer has also reduced the amount of work a bookkeeper or accounts assistant would traditionally do. Cheques no longer have to be processed and this has removed yet more work from bookkeepers.
One of the major ways that manual and semi-skilled jobs are being removed by the software is the collection of payments. The Xero invoicing system by way of example includes the provision to send out automatic reminders at a period of time chosen by you to customers, and for these to be sent out without any interaction at all from your staff.
Removal of a Job
The credit control job in our business would have taken our accounts person a morning each week to set up, process, issue statements and reminders and follow through. Since we switched from Sage 50 (an extremely antiquated accounts package in our opinion) to Xero a few years ago we simply have to pass the unpaid invoices across to our credit control person once automatic reminders have been sent out and they can instantly move to a letter before action and ready to go with a court case if the customer is deciding not to pay. This has taken out many hours of work each year, and the whole thing can be done extremely quickly.
Is It a Bad Thing or Just Inevitable?
It’s not particularly a bad thing in our opinion that Xero and QuickBooks and other similar cloud accounting services may potentially remove a large number of jobs for semi-skilled workers in companies and in accountancy practices. It is to a certain degree inevitable that this is going to happen at some stage because quite a bit of the work is menial and is capable of large scale automation.
The Cloud Accounting Community is Defensive about the Effect
Xero is quite defensive about its effect on accountancy firms and the last time we wrote an article like this a PR company acting on behalf of the company contacted us, pointing to evidence they had that showed that accountancy practices embracing Xero saw a large increase in work coming from it.
Cloud Accounting Enables Work for Accountants
We do not doubt this, and there will be work coming out of cloud accounting systems because in a business there are always going to be accountancy queries that crop up due to the various anomalies in accounting, preparing statutory accounts and also filing tax returns to the HMRC for VAT and corporation tax. Don’t get me started on payroll…
However I suspect that the profession will become more streamlined in due course with increased demand for experienced accountants and less of a demand for accounts assistants working in house. Cloud accounting has enabled a whole range of freelance opportunities as well for bookkeepers who can now do tasks remotely (and very quickly). It may well be that the effect of cloud accounting systems will simply be to alter accounts jobs but not reduce them overall.
Cloud Accounting is Going to Change the Accountancy Jobs Market
However, whilst it may involve an increase in some types of work for accountancy firms, we think there is an obvious impact on staff in small companies conducting semi-skilled and fairly menial accountancy processes that cloud accounting systems have automated. This is inevitable and there is really no way round the statement that cloud accounting systems will reduce numbers of semi-skilled accounts staff in business.
We think that in the future there will be a demand for freelance accountants and bookkeepers to assist with troubleshooting accounts (working remotely). We suspect that most companies will employ less accounts staff internally and outsource their bookkeeping to external contractors due to the huge cost savings. Accountants producing end of year returns will be OK for the time being and should see their income secure unless government streamlines returns and automates them using the new Making Tax Digital initiative.
What do you think? Tell us and we will post your reply here. If Xero, Quickbooks or any other cloud accounting provider (or their PR companies) want to comment on this or provide evidence of research to show the effects their software has had on jobs, we would be more than happy to add this to the article.