Want to know more about the UK bookkeeping & accounting space?
I’m excited to announce a new series on the DOKKA blog where we have discussions with Bookkeepers and Accountants throughout the world.
This allows our readers to understand how the bookkeeping process is both the same but also different in different countries around the world.
And it’s always so interesting getting to know the face behind the names of the bookkeeping and accounting companies.
Our first conversation was held with UK Accounting Company, McBlain and Davis accountants.
From their website, https://www.mcblainanddavis.co.uk/
McBlain and Davis Accountants are an Ayrshire based accounting firm located in the centre of Ayr within Wellington Square. Our staff have over 35 years of experience working in accounting.
Here is an edited version of the discussion Eric & Mary had over Zoom.
From timber merchants to property rental!
Eric: Lets start off by understanding a little about yourself and your company?
Mary: I have a number of years experience with accounts, in a lot of different business segments, ranging from manufacturing, to timber merchants, to property rental.
Quite a lot of different business segments.
My colleague, Emma, and I were working for a local accounting practice, and we decided this would be the right time to go out on our own to setup our own practice.
We have a mix of different clientele, so it’s very interesting. They are mainly local. Sole Traders, Partnerships. A wide variety of clients doing a different range of businesses.
We believe it’s important to get to know our clients and their business really well.
How artificial intelligence data extraction software is used!
Eric: And you’ve been using DOKKA since very early on in your business.
Mary: DOKKA’s AI software has really helped.
Since we started using DOKKA, we are spending far less time on data collection & data entry, and that allows us to spend more time with the clients to find out more about their businesses and also to concentrate more on advisory services. It’s also freed up a lot of time for our clients. They’re not doing a lot of data entry. They’re taking a snapshot, and sending it into DOKKA. Some clients choose to do their own coding to their account. We also have a few clients that are on the go, they’re very busy, they take a snapshot, and we do the rest for them, so we’re saving them a lot of time on the bookkeeping entries.
DOKKA is very fast, it’s very accurate.
If you want to look for a specific document, you can use several indexes. You can search by number, by date, or by reference, and it will be found in seconds.
Should Accounting companies be bookkeepers or advisors?
Eric: Some of the businesses you are doing the advisory, the accounting side of it, some you are doing the processing. Where is the industry moving to? Is it moving more to outsourced processing, or more to keeping the bookkeeping internal, and using accountants for the advisory side.
Mary: I believe with the AI technology that the accountancy sector is going to move more to advisory – that’s where they’re going.
Another advantage of freeing up time is to advise clients. Knowledge and experience are essential today as things are moving very fast.
How do business owners have the expertise to allocate?
Eric: I was a bookkeeper about 20 years ago, so things may have changed since then, but there needs to be a certain amount of expertise on where to allocate the entries. How do businesses have the knowledge to know where to allocate.
Mary: Initially they might not have the knowledge. But a lot of the transactions will be fairly repetitive with the same suppliers. Perhaps the same type of purchases they are buying. And DOKKA has the chat facility where the client can ask.
But we check all the entries, so if they miscode, and that does sometimes happens, we will pick it up, and chat to the client so they know where to allocate in the future.
Bookkeeping in the days of files and stapling
Eric: You’ve been in the accounting space for a number of years both now with your own company and previously with an accounting company. What was accounting and bookkeeping like when you first got started in the industry, when their was paper and stapling of documents.
Mary: Well, I’m going to be giving away my age now!
It was manual ledgers, it was all paper, payroll records, payroll tables.
We were just starting to use computers at that point and those were the large mainframes.
So totally different.
The technology has also advanced very fast, and it’s going to speed up even more in the following years.
Predicting the future of the Accounting Industry
Eric: So DOKKA together with cloud accounting is helping you. Technology is moving fast. What do you predict will happen 5 to 10 years from now.
Mary: Everyone working in the accounting industry needs to be experts at cloud accounting software, and AI software, as they’re here to stay. Things are going to become more and more automated with AI software, and the capacity for it to learn. There’s no end to it. As far as the accounting software is concerned, it’s a challenge for people to keep up with all of the different apps that can connect to it, and all of the software upgrades.
Which accounting software is best?
Eric: Around the world different SMB’s have very different accounting software they use. In the UK, there is Xero and Quickbooks and also Sage is a big player. And there’s Freeagent and Kashflow. In the US Quickbooks is still dominating by far, although Xero & AccountingSuite and others are trying to take them on.
What is your preference and do you feel that one accounting software is better than the others.
Mary: Both Quickbooks and Xero have their advantages. We have specialization in both. We need to keep up with the accounting software – to keep up to date with the updates and features. You need to know which accounting software package matches best with the clients needs. And to inform the clients on new features that are being released.
Businesses should focus on business
Eric: So in the future bookkeepers will become advisors and consultants on the features in the accounting software, but there’s too much happening for the clients to keep up to date with the software as there is so much happening?
Mary: Yes, the clients need to be left to concentrate to run their businesses. That’s what they want to be doing. A lot of people try to load up the software themselves as an app on their mobile, but they’re so busy running their business, they realise it’s far more complicated than they realize, and it puts them off the software initially.
Clients need to be left to concentrate to run their businesses.
Accounting Software companies are the top dogs
Eric: From our perspective, if you look at the Quickbooks or Xero marketplace, there are a lot of 3rd party apps that have been added on, such as DOKKA. Also autoentry or receipt bank or datamolino just in our vertical. And a lot of apps in other verticals. A lot of people think that the accounting software companies will try do everything themselves in the future, maybe not right now, but in 5 or 10 years time, either do it themselves or acquire the app / platform companies. Sage has bought Autoentry, Xero has purchased Hubdoc. Do you think there will be marketplaces, or eventually the accounting companies will build or buy all the 3rd party software functionality themselves?
Mary: There might be a monopoly situation where the accounting software companies try do that. It will be a constant battle between the accounting software companies and the app providers.
And there is also a battle between the accounting software companies.
In the UK there is a race between Quickbooks and Xero the leading 2. Each of them have their own features, and they’re constantly upgrading their software. It’s a dilemma for accountants. If you go with one rather than the other, are they going to be left behind. You want to offer clients more than 1 piece of software so they can choose which one they want to use themselves.
Compliance & Regulation in Accounting in the UK
Eric: Specifically in the UK with GDPR and MTD and compliance, how have you see the changes in the last few years in terms of impacting the businesses you work with – is there more compliance, more regulation.
Mary: There is a lot more of both. These days to onboard a client is more challenging. I was speaking to a client this morning who really just wants an overview of her accounts. She’s a small self employed business. She doesn’t need software. She just needs advice. However to onboard a client now with anti-money laundering & GDPR, it takes a lot of time. There is a lot of admin work. You’re constantly training. It isn’t a once off process. There is ID verifications, online verifications. You’ve got to keep these up to date.
Mindset of Accounting Regulations in the US versus UK
Eric: When we’re speaking to the accounting and bookkeeping companies in the US, they don’t seem to be as concerned about regulation and compliance. UK companies are not prepared to take chances.
Mary: You don’t want to take chances with that. It only takes 1 junior who is not fully trained, so you have to make sure all staff are property trained.
How is CoronaVirus affecting Accountants?
Eric: Everyone is thinking and talking about CoronaVirus. I’m working from home today. You have lots of businesses you are speaking to. People are starting to work remote, conferences are being cancelled. Business has changed dramatically in the last few weeks. How are the businesses you are dealing with reacting? Are they nervous, are they making big changes?
Mary: People are nervous, but they are trying to cover their feelings at the moment. We’ve stopped shaking hands with clients. Not just for our benefit but their benefit. We’re in a lucky position here. We can organize zoom meetings, and we can also work from home.
Affect on Coronavirus on clients of bookkeepers & accountants
Eric: Using cloud accounting software and software like DOKKA is allowing you to work remote, but there are many traditional companies that need to be in the office and can’t use cloud software. Are any of your clients not able to work from home?
Mary: Many of our clients aren’t able to work from home. They need to be in their shops or businesses for the business to continue. At the moment in the UK the numbers are low, and people are not panicking at the moment. But the numbers are expected to increase, so people are being careful.
Top 10 Accounting Firms move into Bookkeeping. Is it the right move?
Eric: A number of large accounting firms, especially one of the top 10 UK accounting firms, moved into bookkeeping in the last few years, and spent a lot of money to be known as a bookkeeping firm in addition to accounting. Some have subsequently withdrew out of the bookkeeping space. If a large accounting company is thinking of offering bookkeeping services, what would you say to them?
Mary: Focus more on advisory services. All the bookkeeping can be outsourced and priced according, whether on value or hourly.
Eric: Thank you Mary, I really enjoyed our conversation.
To find out more about McBlain and Davis, visit their website at www.mcblainanddavis.co.uk
Here are some other discussions with influential people in the accounting and bookkeeping industry:
Hossein Dadkhah from DataDrivenCIOs – Factors Accounting companies should consider when dealing with client data
Lisa Cervantez from PureSpeed Lightwave – Why an internal Finance Team chose SAGE 300 as their Accounting Software
Jeffrey Levine from Persofi – Bookkeeping differences between Israel versus the UK
Zane Orton from M-inent – Future of Bookkeeping
Akiva Brett from KB Tax – A South African Tax Practitione
Holly Dunn from Accountable Bean – SAGE versus Intuit