Why automation isn't killing jobs (yet)

Cloud Accounting Weekly #44

I've been living in this cloud accounting world for six years now, and it seems that people are constantly talking about the coming end of bookkeeping and compliance work due to automation and artificial intelligence.

And yet, most firms are still chugging along, growing at a nice, steady pace. Bookkeepers continue to be employed manually copying data from one system to another. Staff in tax departments waste untold hours collecting paperwork from clients and cleaning up QuickBooks Desktop files. Accounts payable clerks in corporations push paper around like nobody's business.

The technology is available to cut these jobs in half, or more. So why hasn't automation led to more job losses in the accounting profession? 

Derek Thompson's recent article in The Atlantic, "So, Where Are All Those Robots?" offers a theory:

Automation has created an overabundance of labor, which has pushed wages down. And "companies, seeing that they have access to cheap labor in a slowly growing economy, invest less in new risky technology, which leads to less productivity growth. High employment, low productivity, low wage growth, and automation can all live together in the same story."

The big job losses won't come until the next economic downturn hits, and companies take measures to significantly cut costs, just as manufacturers did during each recession from 1970 to 2015.

And just like in every other downturn, it's the firms that are positioned with the technology already in place that will be able to take advantage of the situation and grow while their competitors struggle to survive.

Top Stories

Where Are All the Robots?

The Atlantic — Why isn't automation leading to more job losses? One theory is that a surplus of labor has suppressed wages, reducing the incentive for firms to invest in new technology. It will take another recession for firms to make drastic changes to their processes that eliminate many low skilled jobs. 

Cloud-based accounting firms add five times more clients

Xero Blog — Recent research conducted by Xero has found firms that are not yet all-in on the cloud may be inhibiting their growth. 

Remote Work

The Best Telepresence Robot

The Wirecutter — Considering a telepresence robot to bring your remote employees into the office, at least virtually? My favorite product review site did 20 hours of research and testing and found that the Suitable Technologies Beam Enhanced is the only telepresence robot worth considering. 

Reaching Clarity On Remote Work Policies

CPA Practice Advisor — If your firm doesn’t have official policies for remote work, now is the time to work on getting one in place. Here are a couple areas to consider. 

Automation

The Age of Automation and the Impact on Your Workflow

AccountingWEB — Ian Vacin lays out how automation will affect your firm by 1) causing data to flow among various systems without duplicate entry, and 2) allowing for standardization of processes across your client base. 

Sales & Marketing

When is a Phone Call Better Than Email?

FUTRLI — Here's a thorough list from our friends at FUTRLI of when it's best to call rather than email. Any time you're discussing pricing is an obvious one, but also consider making a call anytime you've taken too long to reply to an email as well. 

What can cash flow forecasting do for your business?

Float Blog — Here's a guide that lays out 8 benefits of cash flow forecasting. Check it out for inspiration when marketing this service to your clients. 

A cashflow forecast in Float

A cashflow forecast in Float

Practice Management

Basecamp Employee Handbook

GitHub — Basecamp, maker of the popular project management and collaboration app, has made their employee handbook public. Check it out for inspiration or just to see how they do things. 

Are Portals Finally Coming of Age?

CPA Practice Advisor — Here's a review of four new client portals of note introduced in 2017, including ADP's payroll portal, Sage Accountant Cloud, Microsoft Dynamics 365 for Financials, and Zoho. 

Bitcoin

Bitcoin start-up Coinbase aims for $1 billion valuation

CNBC — Coinbase, a hot start-up in the bitcoin market, is talking to investors about raising money at a $1 billion valuation, WSJ reports.

App News

Box Q1 Revenue Hits Record, Beats Estimates

CFO - The cloud content management firm says it is on track to reach profitability and generate more than $1 billion in annual revenue by fiscal 2018.

Expensify Surpasses 35,000 Global Customers

Expensify Blog — Expensify has obtained 15,000 new customers in 2017 so far, renamed "Wingman" to "Copilot," and has simplified the UX in the mobile app.

Expensify Sues Abacus for Patent Infringement

Expensify Blog — Expensify has filed a lawsuit against Abacus Labs, Inc. for infringement of two patents surrounding receipt scanning and the automatic matching of the scanned receipt to a credit card feed.

Xero Update: Lots of Incremental Changes

Accountex Report — Greg Lam covers the recent changes to payment terms, the interface, and machine learning in Xero.

App Spotlight

Is RIP Global another death knell for small business bookkeeping?

Daily Fintech — If there is one traditional profession being heavily disrupted right now by fintech technology in the small business space, it would have to be bookkeeping. RIP Global may be the competitor to Xero/QBO for the 50% of SMEs that don't keep books on a regular basis. 

App Updates

Spotlight Reporting — Forecasting Tax Payment schedules

Use the new Forecasting schedules for sales tax, payroll deductions, and superannuation to improve cash management and tax planning.

QuickBooks — QuickBooks Online Retail Prices are going up in July

Beginning on July 22, 2017, prices will increase for a group of existing QuickBooks Online Plus customers who pay directly for their subscriptions. Wholesale pricing is not affected at this time.

QuickBooks — ProAdvisor Website moving to QBOA

The standalone ProAdvisor Member Website will be retired on August 1, so make sure you know where to find it in QBOA.

xero-logo.png

Xero — New Additions to the Xero Marketplace

Check out the latest additions to the Xero app marketplace, including MembershipWorks, which "allows membership organisations to automate day-to-day administration. It makes it much easier to process new member signups, renewals, event registrations, donations and e-commerce purchases, straight from an organisation’s website."

Xero — Recurring Jobs in Xero Practice Manager Get an Update

Xero has made a series of enhancements to the recurring jobs feature in Xero Practice Manager to help you work more efficiently and save time.

Xero — Payables and Receivables now in Report Templates

Xero has extended their Management Reports Templates to include payables and receivables reports.

 

This issue of Cloud Accounting Weekly is brought to you by Blake Oliver and Phil Gross. Thanks for reading, and have a great week.

Blake Oliver

Los Angeles, California, United States