Jetbooks
Irish SMEs have been relatively slow to adopt online accounts software such as Xero. Conor Kearney’s Jetbooks sees an opportunity to change their minds,
Conor Kearney provides an outsourced bookkeeping service, made possible by offshoring back-end tasks in the Philippines
New Zealand accounts software provider Xero is having a good pandemic. In the six months to September 2020, paying subscribers increased by 19% to 2.45 million, spread across the company’s four main markets of New Zealand, Australia, the UK and North America. Revenue was up 21% to just on €250m and operating profit quadrupled to €36m.
Out-of-office working has accelerated the trend to cloud software that the company and its bookkeeper and accountant can log on to remotely. While software can streamline mundane accounts processes, people are still needed to pull everything together. Down Under, a lot of back-end work is offshored to the Philippines, where there’s a huge English-speaking labour force.
Conor Kearney, founder of Jetbooks, is leveraging this proven model for his outsourced bookkeeping service. Kearney (32) trained as an accountant with KPMG and decided to do his own thing three years ago. The Jetbooks service centres on two people in Dublin and five staff in the Philippines, who work evening hours as the country is seven hours ahead of Ireland.
In his KPMG role, Kearney worked with smaller businesses and learned that good bookkeepers are hard to find. “I started Jetbooks to fill that gap and provide a high-quality bookkeeping service,” he says. “We’re different to a traditional accountancy practice insofar as we don’t do any of the compliance work such as year-end accounts and tax returns.”
The bookkeeping market is typified by solo operators with multiple clients, while many SMEs have an inhouse bookkeeper, who can be hard to replace if they leave. The pitch from Kearney is to outsource the service while at the same time improve finance processes.
“Our value proposition is that we can look at all the processes and identify the data entry that doesn’t need to happen. With cloud software such as Xero, there’s less manual entry and you’re receiving more real-time information. We handle everything up to the management reports stage.”
In a typical small Irish business, invoices are received in the post or by email. These are inputted into the accounts package either in-house or by the firm’s bookkeeper or accountant. With Xero, and some rivals too, there is automatic forwarding from the mailbox, and purchase invoices are scanned with OCR software. This extracts the supplier name, the amount, the VAT element etc, and there is an immediate update of creditors and debtors.
When invoicing from the accounts software, Xero integrates with Stripe. There’s also automatic invoice chasing built in. According to Kearney: “If the debtor payment is overdue, the system can be set up to email a reminder, and to keep emailing reminders until the debt is discharged. So that whole part is now automated.”
Kearney isn’t the only Xero enthusiast in Ireland. There are dozens of accounting service providers who offer remote Xero-based bookkeeping and accounting. Aperio, led by Brian and Gabriela O’Mahony, is a step up from Jetbooks, with its four-person team promising a complete remote finance department.
Aperio notes that unlike Sage and Quickbooks, Xero lacks a specific Irish VAT reporting feature. “Using a quick workaround the relevant VAT report can be generated correctly. VAT reporting is a minor inconvenience rather than a reason not to use the system,” says the firm.
Mazars has been using Xero to provide clients with cloud accountancy services since 2013. Jonathan Fryer, outsourcing services partner, says Xero provides clients with 24/7 access to data from anywhere in the world, and streamlines accountancy processes so that there is a single source of data as close to real time as possible.
How much does outsourced bookkeeping cost? That depends on the level of interaction required. At Jetbooks, Conor Kearney says monthly management accounts suit most clients, but for online vendors daily figures may be required.
Three years into the venture, Kearney believes there is plenty of scope for growth. “In Ireland we’re still behind the UK, Australia and New Zealand. Cloud accounting software is a commodity in those countries. Nearly every business is using accounting software and enjoying the benefits.”