Botkeeper
Bookkeepers, traditionally known for their meticulous attention to the smallest financial transactions, are currently looking at an important change in the game. As bookkeeping tools and tricks become more available, each individual firm’s unique value propositions (UVP) in terms of bookkeeping services become indistinguishable from the competition in the eyes of prospective clients. Let’s look at the driving forces behind this commoditization trend, its implications for bookkeeping companies, and how your firm can adapt and navigate this changing landscape without becoming an influencer… yet.
How Did We Get Here?
As with anything related to business and technology, many factors have contributed to the commoditization of bookkeeping. As long as enterprises look for easier, more efficient ways to get things done, more and more integral parts of the trade will become commodified. It’s part of the game, and we love it. We’re all having fun, and no one cries for five minutes in the bathroom every other day.
Technological Advancements
The growth of sophisticated accounting software has altered the bookkeeping landscape. Tools like ours can automate many tasks that were previously done manually: transaction recording, reconciliation, and financial reporting. Some can also allow nearly anyone with a screen and internet access to run basic bookkeeping automatization and call it a day. This has been a driving factor in commodifying some accounting tasks, but the technology works both ways. It allows firms to gain capacity and save time and money while encouraging their evolution into new services that may further support their clients beyond daily, automated bookkeeping tasks.
Regulatory Standardization
The standardization of accounting and bookkeeping practices and regulations means that there’s little room for differentiation in terms of compliance quality. Of course, this isn’t a criticism of regulations, but with standardized compliance, it is unlikely that any of your competitors will do things differently in order to adhere. This adherence, therefore, doesn’t serve as a Unique Selling Point (USP) that firms can leverage. However, that leaves you with accuracy, speed, efficiency, and, of course, cost (which is what we’re discussing in essence via commoditization).
Market Saturation
Lower barriers to entry, partly due to the availability of powerful and user-friendly accounting software, have led to an influx of service providers. Outsourcing accounting services to third parties and the recent rise of offshoring have also increased the number of options for businesses everywhere. This saturation further intensifies competition and hastens the commoditization of services. And don’t even get us started on online personalities.
Whatever Will We Do?
When services become commodified, firms are forced to face lower prices, which result in slim profit margins that, in turn, force firms to reconsider their entire structure to survive. A professional’s eye is no longer enough of a UVP to entice new clients, and existing clients must be kept safe from the scent of better prices.
Despite these challenges, firms still have options. There are strategies they can adopt to come out ahead in this commoditized environment:
Leveraging Technology. Anyone can pick up a screwdriver, but only a few people can perform a good installation. The same is true when dealing with digital bookkeeping tools. Beyond basic accounting, firms can use technology and their professional knowledge of business to provide advanced analytics, financial forecasting, and strategic business advisory services. Mastering tools like Botkeeper Infinite adds significant value to the client’s business operations in the form of experienced insight. You don’t just know how to automate the numbers efficiently; you know what they really mean.
Client Relationship. As offerings become more homogeneous, firms have to find a way to stand out. Many have taken to challenging the commoditized market by fostering and nurturing client relationships. A sense of safety and importance in a firm has no price tag. This is especially true for existing and long-term clients. Keep your clients informed, stay in touch, and send them flowers sometimes. They have feelings too, you know?
Emphasizing Specialization. One effective strategy is to specialize in serving specific industries or niches. Specialization allows firms to offer insights and expertise that generic services cannot, thereby creating a UVP. It may not guarantee long-lasting clients, but it’s a foot in the door for future forms of support.
Building a Strong Brand. Developing a compelling brand identity and exceptional customer service can make a firm stand out. A strong brand resonates with clients and creates loyalty that transcends price considerations. This can include social media presence, website revamping, and even mascot ideation. You don’t have to compromise any of the seriousness of your firm; in fact, your brand can depend on it. Just make sure the brand is easy to recognize and remember. Remember, Wrigley sold soap before it became recognized for the packs of gum he gave his clients.
Continuous Improvement and Education. With so many “disruptors” out there making our eyes roll to the back of our skulls with their schemes, the business landscape is in constant evolution. Stay up to date on technology, regulatory changes, and best practices. Ensure that your firm can offer the most efficient, compliant, and innovative services available before others catch up. Continuous learning also empowers firms to anticipate industry trends and adapt their services accordingly.
Rage, rage against the commoditization of the bookkeeper
Once something becomes a commodity — be it a service or product — it’s hard to see it as a valuable specialty again. It’s up to firms to innovate and rethink their value proposition to ensure their relevance. The technology that makes this possible is only going to become more sophisticated and available, and other new trends will only continue to affect the crust of business accounting. Adaptability, differentiation, and a commitment to adding real value to clients’ businesses will distinguish successful firms in this new era of bookkeeping.
Put technology to work for you to drive down the cost of your bookkeeping compliance, and remain competitive while dedicating your firm’s time to more valuable pursuits. It’s great to automate, and Botkeeper Infinite has the goods.
