Bookkeeping in the Digital Age
By Wendy Tate, Feb 7 2018 09:52AM
What does the future hold for the bookkeeper in the digital age? Will the role of the bookkeeper become extinct? With more small businesses discovering the world of Cloud Accounting these are two questions I am often asked.
The answer to this, in my opinion is a very definate no and here is why...
The role will undoubtedly change with less of the data entry to do, but these clients will still want their VAT returns checking before filing and their payroll doing as well as fixed assets to account for and management reporting. The role will become more advisory, the bookkeeper will be valued for their knowledge and business advice rather than being a data entry clerk as many are now.
Cloud Accounting should been seen as an opportunity not a threat, the advent of the digital age means that as a bookkeeper your horizons are wider, no longer do you have to be within easy driving distance of your client, the world is your oyster. My furthest client is 95 miles from me a 2 hour car journey, thats if the traffic is extremely kind and there are no roadworks along the way, not often the case these days! This would not work without cloud accounting it would not be at all practical to travel this kind of distance to work at their office on old fashioned desktop software. Instead they email me some paperwork and post the rest via signed for delivery, I complete all the bookkeeping and scan copies of each bill into the software and then return the originals the same way.
With an estimated 3 million small and micro businesses still using either excel or paper bookkeeping there will be a great opportunity for cloud accounting bookkeepers and accountants to offer training and support. For me as a Xero Certified Adviser this will provide exciting opportunities to introduce more small busineses to this fantastic cloud based software. These small businesses will be able to have a more in depth view of their figures and this could well result in business growth as decisions can be make throughout the year as these businesses will have up to the minute view of their financials instead of an annual snapshot when their accountant does their tax return. To watch any clients business grow and thrive is a wonderful thing.
Many small clients especially those in the trades (not stereotyping here they know this is the case) have little or no processes in place. The results are obvious, receipts fade while they are stuffed in the windscreen of the van or worse get lost altogether. Invoices are missed as they rush from one customer to another they can often forget where they have been to by the end of the day and mileage is often not claimed as people forget to record it. In short these businesses owners are losing money, they are often stressed as the only indication they have on whether they have made any money is the balance in their bank account.
I work with my clients to put some simple processes in place to banish bookkeeping stress firstly, I set them up with Xero, of course, for some this sounds terrifying as the reason they don't do their Accounts this way already is the fear of using a computer, this is easily managed by getting them to download the Xero App available on both android or iOS, now the magic starts to happen. As they get those receipts, previously filed precariously on the windscreen, they simply take a photo from within the Xero app and they are sent to the software and I can do the rest. Similarly they can create an invoice and email it straight to the customer before they leave site simply within the app. Once I show my clients how easy this is and give them back control over their paperwork their stress levels decrease and they are happier people. All clients want at the end of the day is for their stresses to disappear.
I do still have clients who arrive will all their accounts 'filed' in a supermarket carrier bag or two. My first ever client was a lovely guy who had been in business for 11 months, he had no idea whether he had made any money or not. While he wrote down what people had paid him in a book and had kept all of his receipts and invoices everything was going through his personal joint account along with his wife's salary and all the household bills, so as long as the bank was in the black he thought he was doing okay, this does seem quite typical of a new sole trader business. My advice, well Xero of course and a separate bank account for the business making everything transparent.
There will always be the small businesses who don't have the time or inclination to do any of their bookkeeping and are happy to outsource everything, for these businesses the bookkeeper role will remain pretty much the same, or will it?