The Rise of the Advisory Bookkeeper

Register now

IMGCAP(1)]There is a trend that is starting to take hold in the U.S.: the rise of the advisory bookkeeper. In other words, a bookkeeper who is doing much more than just traditional bookkeeping—going beyond data entry, reconciliations, monthly financials and client setup. The advisory bookkeeper is offering value-added services such as business plan consulting, cash flow projections, and how to set up efficient business processes.

Why is this happening now? In a nutshell: the cloud.

Meet Blake Oliver, owner of Cloudsourced Accounting. He is one of these advisory firms. Blake says that three years ago, his business wasn’t even possible. Now that cloud solutions for small businesses have matured and improved, running a firm like Cloudsourced is a no-brainer. Blake is not a CPA. He holds a music degree and is an accomplished cellist. This is certainly not the normal path for an accounting firm – but it really doesn’t matter. Blake attributes his success to providing clients with what they want. It’s almost as simple as that.

Cloudsourced has gone from zero to 120 clients in less than two years.

It didn’t take long for Blake to realize that while bookkeeping is necessary, it isn’t what clients really value. The bookkeeping serves the higher purpose of ongoing consulting and advisory service. But small businesses want proactive strategic advice from their accountants. And the fact is that few CPA firms provide this level of consultation. Blake fills this much-needed void.

He gave me a simple example of how his business is exceeding client expectations. One client sent Blake a text with the question: “Are we going to be able to give bonuses this year?” Because that client was set up on cloud accounting (Xero), Blake was able to log into the client file and review the cas hflow, bank balance and last year’s revenues. He could see in real time that the client had roughly $36,000 more than last year. Ten minutes later, he responded to the client and let them know that they were looking good for bonuses this year—resulting in a very, very happy client.

Interestingly, this particular client also has a CPA who does their taxes. So why is Cloudsourced getting the revenue for this kind of advisory service? Because the CPA doesn’t know what’s going on with the client’s business on a day-to-day basis. The CPA only has a once-a-year relationship with the client. Who is this client’s trusted advisor now? Blake likens his services to ongoing management accounting, or a quasi-CMA for small companies.

Cloudsourced is filling a gap between the traditional bookkeeper and the CPA firm. They are providing the ongoing advisory, but aren’t charging $400 an hour for it. That’s really appealing to small businesses that want the help – but don’t have the cash flow to pay high hourly rates. 

Jamie Sutherland is the president of Xero US.

For reprint and licensing requests for this article, click here.