Receipt Bank Customer Experience specialist Hugh Walker spends most of his time in our partners' offices helping them make the most of our software and build more efficient processes. In a new feature, Bookkeeping 2017, he'll be examining how the work of bookkeeping has changed and sharing tips to improve your efficiency.
For as long as bookkeeping has been bookkeeping there’s been a need to describe what every transaction is for. The finer details. Which of the pub receipts are for client lunches and which are better left unclaimed. Seven years of invoices and receipts collecting dust in filing cabinets, boxes or unruly stacks. The Description was key to easily identify each item’s purpose. Cloud accounting, and the tools that go with it, have changed all this.
The maths doesn’t lie, the Description field is costing bookkeepers an hour a month per client and my intention when I first set out to write this was to say that the Description field was no longer needed. It was defunct. Deader than disco.
Having done further research and spoken to Trent McLaren, Australian thought leader of the year, Chris Hooper, one of the close runners up, and contacts from Xero, QBO & MYOB my thoughts have changed (but not about disco).
It’s necessary to add a disclaimer: while these thoughts are meant to help bookkeepers become more efficient (and also to exercise my vanity) they are purely my own and not representative of Receipt Bank.
Ok, so now the groundwork is out of the way, here’s some background on why I want to explore this subject.
I’m part of Receipt Bank’s Customer Experience team, splitting my time between monitoring how our product is being used, how we want to develop it further and - the key part - visiting our Partners in their workspaces to better understand and help them improve their day to day experience using Receipt Bank.
My personal aim is to make our partners not just more efficient and profitable but also happier, and not just from the cake we send out after a visit!
These observations give an on-the-ground view of exactly what our Partners are experiencing so we can help find them ways to increase efficiency and streamline their processes. I've visited many of our Partners and the results tend to speak for themselves - after one visit the average firm increases their level of automation by 135%.
The most common time-sink that I see on these visits is bookkeepers manually inputting data into the Description field for all their items. “Why are you doing it that way?” is a hugely powerful question in my role, and it's startling how often people don’t have an answer, or have never asked themselves the question. We should all ask this more often.
Across all my 50+ visits, I’ve collected the responses of Partners and can summarise that:
The figures I’m going to use below are averages based on my observation of bookkeepers and the data we see behind the scenes. When in doubt I’ve kept them conservative because, frankly, these aren’t numbers that need exaggerating.
It's also necessary to consider the time taken to review items in the accounting software if they don't have a Description:
Taking all of this into consideration the overall time cost of using the Description field is 59.25 seconds per item. Let’s call it a minute for simplicity’s sake.
The Receipt Bank Partner’s client submits around 60 items per month, which means the time cost of the Description field, across an entire client base, will work out at around an hour per client per month.
In Australia the average rate for bookkeeping, for those still on hourly billing, is $75 per hour. So overall, the cost of using the Description is around $75 per month per client. This makes quite a compelling case, particularly given the common answers to the “why are you doing it that way?” question.
There’s also some other good reasons you might want to shy away from the Description field;
There are clear cases when a Description field is needed. Examples include when additional information is needed that can’t be used in tracking codes, when multiple apps and limitations in the workflow require the Description field to be a bridge for data or as a tool for clients to communicate to their bookkeeper on an item level, although in this last case I’d suggest that this won’t cost the bookkeeper any time.
Via mobile tools, such as the Receipt Bank app, the client can input this at the time of submission and the bookkeeper will then just need to read it rather than add to it.
Clearly there’s still a situational need for the Description and so it can’t just be as simple as declaring it dead.
What I’d like to propose then is three things:
1. Think before you add it
If you find yourself adding the Description onto items, pause and think about whether it’s really needed or if it’s a “nice to have”, or could be better handled another way. The time cost, and hence the financial cost, will usually far outweigh the changing of a process.
2. Make it special
Stop inputting the Description from your standard service offering. It’s not fair on you to be having to spend the extra time, and it’s not fair on your other clients that clients who do really need it are getting a higher level of service. In an industry rapidly moving towards value-based pricing, transform adding the Description from a costly hindrance to a profitable extra service on top of your standard offering.
Not only will this bring in extra revenue from clients who need it, and hence do require the extra time spent, but it’ll ensure clients who “want” it are happy to do without.
3. Start a conversation
I’m by no means the definitive expert on this but it seems clear that there’s a big opportunity here. Reach out to me and reach out to the community and let’s have a discussion about this!
Want to add to the conversation? Comment below or tweet @Receipt_Hugh. If you’re interested in learning more about scaling your business with Receipt Bank why not request a call from our friendly team.