Is RIP Global another death knell for small business bookkeeping?

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. Data entry, expense tracking, invoicing and payroll – tasks traditionally associated with the profession – are becoming increasingly automated by cloud accounting platforms and their add-on partners. As a result, many bookkeepers face death by a thousand cuts, or must move up the advisory value chain to remain relevant.

There are many opportunities to do this – especially in the realm of process efficiency technology advisory – but to do this means disrupting the very own work they previously billed clients for. The old adage ‘disruption rarely comes from within’ signals that this will be a tough, if not an impossible transformation for many in the industry.

And it would seem the latest innovation in bookkeeping out of New Zealand, RIP Global, heralds another tolling bell for the death of the sector.

Forget scanning receipts and all that flash fintech bookkeeping app wizardry. RIP simply starts its expense tracking and reconciling journey the minute the purchase is made. It first sends a copy of the invoice into it’s ‘lockbox’ in the cloud, then reconciles direct with bank account statement data. How it does this last piece isn’t entirely clear – either scraping or a direct data feed. Given banks reluctance to do the latter, my guess is the former, but I could be wrong.

Companies like Receipt Bank and Xero do this together today. But the key differences seem to be bypassing the need to physically scan a receipt using your phone and use an accounting system to complete the reconciliation (this is where the bank feed data usually ends up currently). Some point of sale systems, like Vend, also push invoice data direct into cloud accounting systems, which suits larger retailers with continuous stock orders and who are looking to drive efficiencies.

And while it might seem unusual to bypass the accounting system altogether, to quote founder Mel Gollan from a recent news article, it would seem there is a ready and viable market who wouldn’t really mind this at all. “Fifty per cent of SMEs don’t use any accounting software but still need to retain and process invoices receipts and bank statements for tax compliance,” she says. “They don’t use it because they just don’t want to do it – and neither did I so I designed a solution which just gets rid of it.”

The company claims it has secured patent protection for the product and is looking for partners to help it deliver the solution ‘on a global scale’.

Seems like a good fit for the micro end of the SME market, solving a simple pain point without heavyweight accounting software. And whoever thought we’d call cloud accounting heavyweight! While not a chatbot, to me it seems like it seeks to solve a similar problem the Sage product Pegg tried to do when it launched. Could startups like this disrupt cloud accounting? That could be a tough one, but with the rise of the gig economy, it’s possible there is room in the market for the most basic of financial products for side-hustlers.

The pace of disruption is certainly picking up. Seems you can’t even get to incumbent status these days before someone is after a slice of your market.

You can see a live demo of the product here, or watch their explainer video.

Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech. Jessica Ellerm is a thought leader specializing in Small Business.

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