The Future of Bookkeeping
Bookkeeping — or, more accurately, the double-entry accounting function — has come a long way since Luca Pacioli first codified the system in Venice in 1494. From a manual process to the type of cloud-based software that’s bringing thousands of bookkeepers and accountants to Xerocon South, times are changin’ — and the beauty of Xero has shown thousands of advisors globally that the move from an abacus to “automagical’ reconciliation is now well and truly entrenched in our culture.
The changing face of bookkeeping
The role of bookkeeping has sat in many demographics over the years. In recent times, recording the daily financial transactions of a small business has been associated with women providing the function in a part-time capacity, around family duties. The label ‘bookkeeper’ has been fondly associated with this role — one that I proudly wear myself. My journey started in 1994 as a bookkeeping/accounting service provider, and I can assure you that I consider myself extremely lucky to have this opportunity to provide such a valuable service to small businesses while having the luxury of being there for my family.
Now, with the introduction of cloud technology, the process and profession of bookkeeping has taken on a whole new life.
On the one hand it’s attracting many new demographics into the field — from the switched-on GEN Y generation to the mature business person seeing an opportunity to run a sound and profitable business model within the small-business community. It’s becoming associated with disruption and innovation. It’s filling conference halls and sparking debate. It’s getting people talking.
On the other hand (which, to me, feels quite at odds with the point above), the introduction of this technology has caused people to question the future of the industry, and whether its ancient roots can survive the onset of modern automation.
The choice is yours
To answer the question, let’s look at the processes at hand. To start, I distinguish the recording of financial transactions for a business as the ‘bookkeeping function’, but that is quite apart from being a bookkeeper. Because there are two other types of activities that regularly keep a bookkeeper busy: management accounts/tax compliance and lodgement, and advisory work.
For me, advisory work is about taking the results of the bookkeeping function and incorporating it into the accounting cycle. You record and verify the numbers, then you talk about them: it’s a natural progression. Essentially, it’s the process of putting words behind the numbers — telling the business owner the story of what is happening in the life of the business.
Bookkeepers begin with the bookkeeping function — and the need for that function (in some form or another) will never die. It’s the foundation of the accounting cycle! All that has changed is the technology we use to achieve it and, sometimes, the language we use to describe it.
As technology automates some of a bookkeeper’s more laborious tasks, it gives the the practitioner more time to fill. Does that mean they are suddenly redundant, confined to the relics of history? No! It means they have the opportunity to define themselves: service more clients in the same product line, deliver a whole new product, step up into more advisory roles, or simply use the time for something personal. The choice is yours.
The way of the future
One of the greatest benefits of Xero, and cloud accounting in general, is that it gives the bookkeeping profession real-time insight into the life of a business — the surges and the wanes, the lost opportunities and the can’t-miss decisions where you can really prove your value. All the things you never could have known before technology showed up and apparently ruined everything.
It’s taken monotonous data entry away with one hand and doled out endless business insights with another! It’s the whole reason I recorded Xero’s Grow your Practice webinar series, to help bookkeepers use this new influx of information to shape the future of their business, however they want.
I am happy to wear the label Bookkeeper (or, BAS Agent in Australia) and I work particularly hard to explain and educate to my clients and colleagues what that function is, why it is important and the value it provides.
And if you’re heading to Xerocon South, I look forward to seeing you there so we can help other people see the same. Because, really, the future of bookkeeping is whatever you want it to be.