In the not-so-distant past, bookkeeping was a labor-intensive process, with a bulk of the time spent entering transactions and reconciling bank statements. Today, new accounting technology has changed the role of the bookkeeper, and while some might see technology as a threat to its existence, others see it as an opportunity.
A study by Carl Benedikt Frey and Michael A. Osborne at Oxford University predicted that accounting is one of the sectors most likely to suffer job loss due to technical innovation and automation. Rather than possibly becoming a casualty of the technological revolution, your company’s bookkeepers need to embrace technology, spending less time on data entry and more time helping managers and directors gain actionable insight from numbers.
The term cloud computing is often used to discuss the future of accounting. but cloud computing is already here. Whether you download bank statements from your bank’s website or use a web-based email server, you’re already taking advantage of cloud computing. Consider the following stats on small businesses from a recent Intuit survey:
- Nearly 50% of small business owners use a smartphone as the primary device to run their operations.
- 37% are adapted to the cloud.
- 65% conduct bookkeeping and accounting with cloud based apps.
- 78% expect to be fully cloud operational by 2020.
The cloud has significantly reduced bookkeeping turnaround time. Today, rather than waiting for a stack of receipts and paper bank statements at month end, information is provided in real time through bank feeds. For example, services like Hubdoc can extract key data from receipts that are scanned throughout the month, automatically pull bills and statements into one secure hub, and publish the data into cloud-based accounting software.
With such real-time information available, it’s now possible to have most accounts reconciled daily and the books closed within a day or two after month end. Is your team accomplishing that?
Accounting software used to have a one-size-fits-all mentality with very little opportunity for customization. Today, the possibilities are endless.
Cloud-based accounting platforms such as Xero, Quickbooks Online, Intacct and others are compatible with hundreds of third-party applications that add new features and functionality. Application Programming Interfaces (APIs), which allow several pieces of software to communicate and share data, are able to integrate point of sale (POS), online and mobile payments systems, customer loyalty programs, email marketing, scheduling tools, logistics platforms, merchant services tools, and reporting tools. Now, your POS system can update your accounting system with customer details and split sales figures by products at the same time as your payroll system posts gross wages and payroll tax liabilities.
This level of customization provides an opportunity for bookkeepers to develop niches within certain industries. The best bookkeepers will have experience with an industry-specific selection of add-ons and will be able to select the best combination of apps and platforms for their employer or client.
Beyond reconciling accounts and preparing a set of financial statements, which stakeholders often don’t know how to read anyway, today’s bookkeepers know how to interpret the numbers and provide insights and recommendations.
For instance, WorkflowMax works with Xero to integrate project management and time tracking. Using WorkflowMax reports, bookkeepers can customize reports to uncover inefficiencies in workflow or personnel or see which customers generate the most income. Acctivate provides inventory management for Quickbooks Online, bringing data together to answer questions such as how often your vendors deliver on-time or whether your cost of goods is under control. It can also provide an analysis of customers by geography, industry or products purchased. This adds to a bookkeeper’s arsenal of tools that enable them to provide critical input.
The Main Takeaway
Bank reconciliations, balance sheets, and profit and loss statements are not going away, but using technology to quickly produce those documents, and so much more, is how modern bookkeeping provides the most value. Keep this in mind the next time you make a new hire, evaluate your staff or revise job descriptions.
For more on the digital evolution in accounting, read our white paper: “How Technology is Transforming the Accounting & Finance Business.”