Art of Accounting: The Radical CPA goes ‘bots’
Jody Padar, the Radical CPA, has become the vice president of strategy at Botkeeper and is the co-author of "Botkeeper for Dummies." What exactly are bots and Botkeeper, and why is this of any interest to accountants?
Botkeeper is a company name based on a nickname for autonomous software programs and the ending of the word bookkeeper. The relationship to accounting is that client accounting services, or CAS, are outsourced accounting and bookkeeping services that are a rapidly growing advisory area. I believe CAS represents a much better business model than typical advisory services because CAS creates a continuing revenue stream. You get paid every month by charging the client’s credit card, so there are no bills to send out, no collection calls or bad debts, and immediate cash. Pretty cool.
The beauty of Botkeeper and similar systems is they primarily perform these services for accountants and not directly for the clients. They are the outsourced source for accounting firms. Now, let’s be realistic. This is bookkeeping work for clients, and every accountant with a computer and some off-the-shelf software can do this, so why should accountants outsource this work? The simple reason is these services can be inexpensively and securely performed by companies using robotics, artificial intelligence and machine learning. That eliminates the need for employees and the excessive handling involved when the processes are performed with manual elements. It also frees the accountant’s time from somewhat tedious tasks, elevating him or her to an advisory arm of the client.
Look, we are all using computers to prepare every type of tax return, small-business accounting software for the bill paying and financial statement preparation, and Excel to get our spreadsheets done. At some point, as we get more comfortable with new services, it is likely we will migrate toward the easier ways of having them done. This is what happened with the other functions that are ubiquitous today but were once new. My attitude is that it might as well be now.
This stuff works. The pandemic has changed the way we work, and has actually accelerated the movement toward many functions and services that can be handled remotely, virtually and by others … for us.
An observation I want to make is that some of the “new” services are simply iterations of what old-time accountants were doing 100 years ago with write-ups. This was after-the-fact bookkeeping for clients too small to hire a bookkeeper, and general ledger postings were done for clients with bookkeepers that supposedly lacked that skill. The accountants worked quickly (by hand using pen and ink on journal and ledger paper in a special type of looseleaf binder) and had a usable financial statement to discuss with their clients within a few weeks. I know all about this because that is how I began (but not a hundred years ago). The many technological changes that started in the early 1990s have come full circle, with accountants now performing these services again, except it is in real-time and digitally and pretty much eliminates any inhouse work by the client. This has become a win-win service and is rapidly growing. It is actually an exciting opportunity.
I will be covering this more fully in a webinar with Jody that is being presented for free on Nov. 16 at 4:00. You can register for it at https://withum.CPAacademy.org/. I am also presenting other free webinars, and you can also register for them on that site. If you’re a regular reader, you can get a look at me in action.
Jody is also allowing me to send readers a free PDF of her Botkeeper for Dummies book. Email me at GoodiesFromEd@withum.com and just put "Botkeeper" as the subject. We are dealing with exciting new things and this is something I believe you should find out more about. Maybe you will also go “bots.”
Do not hesitate to contact me at firstname.lastname@example.org with your practice management questions or about engagements you might not be able to perform.