For years and years, bookkeeping has been a job of paper filing and data entry, uncrinkling receipts, finding the date, the amount, the VAT, working out what it was for and entering it onto some kind of database. The revolution that has arrived is bank feeds. This takes the information contained on your bank statements and streams it direct into your books. Already you are saved the trouble of entering the date, the amount and the supplier.
Cutting edge software such as Xero and Freeagent is now taking this a step further giving you the ability to set up rules for the transactions. For example you tell the software that every time it picks up a payment to BT, it should post this as a telephone expense and that seeing as the VAT amount is always standard rate it can split out the correct VAT automatically. The end result is that technology is starting to automate your bookkeeping. All you need to do is make sure it hasn’t made a mistake and approve the work it has done while you are out doing something more important.
Market leader in this technology, Xero, has then taken this a step further and started to integrate with Customer Relationship Management software, budgeting software, and many other pug-ins to build an integrated business dashboard. Where one software company has led, others are sure to follow and you can argue that the days of manual data entry are numbered.
For us accountants and bookkeepers, there are two ways to look at this. You either see it as a threat- ‘Hang on a minute – half my work has disappeared!’, or an opportunity – ‘Hang on a minute – I don’t have to uncrinkle pieces of paper any more I can do something more important for my clients!’.
I am proud to say that Crunchers is at the forefront of embracing this new technology and re-inventing the role of the accountant as outsourced financial director. This is a role all accountants are trained in and in fact employed in large numbers to deliver in medium to large firms as management accountants. Employed, not for fun or as bright idea but because they deliver real value to those businesses. Until now though, the average high street accountant has been much more concerned with last year’s tax return than next year’s profit. Perhaps, just perhaps, this is the start of something new.