Is bookkeeping dying out?
I have been involved with accountancy now for nearly 20 years, and one of the most startling changes I have seen in that time is how the role of bookkeeping has changed.
When I started my career, it was commonplace to find accountancy firms with many bookkeepers on their staff, offering their clients bookkeeping as a key (and profitable) service. Now, bookkeeping is apparently in decline, with many clients electing to do their books themselves.
What has brought this about? One factor is the growth in the use of IT in both the home and in the office. Most people, even some senior citizens, are now competent in using the basic home computing packages (such as Microsoft Office) and this means that they are able to input and manipulate an electronic spreadsheet that will do the necessary, basic calculations on their (or their accountant’s) behalf. ‘Doing the books’ has never been less stressful or less complicated than it is today, and this is encouraging people to record and manage their affairs directly, removing what they see as an unnecessary additional cost: a bookkeeper.
Aside from the tools now readily available to most, I think there has also been a cultural change in the UK with many people being more ‘business savvy’ than they were 20 or 30 years ago. These days, many people have more than one job, and this exposes employees to lots of different business environments, practices and skills, some of which might include those of a financial nature.
Also, for better or for worse, Britain is much more business-minded in its mainstream culture. Contestants on reality TV programmes already seem to have a grip on the marketing and PR skills needed to succeed in the public eye, while shows such as Dragons’ Den offer a free crash-course on business and product development. Against this backdrop, it’s no wonder that people feel equipped to manage their own financial affairs to a greater or lesser extent.
Does this mean that bookkeeping is dying out, if not already extinct? Well, in a professional sense, it is; services do not survive if people are no longer willing to buy them. But bookkeeping, the skill and the discipline, is not. If you think about it, there hasn’t been a point in history where there have been more bookkeepers. It might be pushing it to say “we’re all bookkeepers now” but it’s a statement that’s not far off.
What does this mean for an accountant or an accountancy firm? Well, for one thing, it means that they will not be hiring any more bookkeepers in the near future. There’s no point having capacity for a service no-one wants from you. This is not entirely disastrous; as profitable as bookkeeping may have been at one point, it was always a ‘low end’ product. By not having to offer bookkeeping, as a service or product, the modern-day accountant or accountancy firm has more time and capacity to offer far more profitable technical products and services, especially to all those people who now manage their books on their own.
Also, the ‘do-it-yourself’ bookkeeper will always require occasional guidance or assistance from a trained financial professional. Just because you can now undertake an activity yourself, it doesn’t necessarily mean that you are either highly competent or professional in it. Whether it be due to keystroke errors or a misunderstanding of the underlying principles, problems do arise with other people’s books, whether they’re using something like Microsoft Excel or not.
One consequence of all this is that the modern accountant or accountancy firm has to be ‘tech savvy’; aside from managing to navigate a financial spreadsheet, you have to ensure that you can operate and use an electronic one as well.
Here at CC Associates, we’ve taken everything a step further. We encourage our clients to use Diamond Discovery’s Prelude Accounts software, empowering them to manage their own books while also benefiting from the numerous benefits such a package has to offer. This way, we can help standardise the way our clients’ accounts are kept and maintained, while also having a role (although an indirect one) in the bookkeeping process.
Bookkeeping as we knew it may very well be dying out, but the practice will not and, as I have argued, has become more widespread in just terms of the number of people who actually do it (as opposed to those who are professional bookkeepers). This is not something to bemoan, as it is good for accountants’ clients as well as for accountants themselves; we’re now liberated to focus on more profitable work and to take on more clients. It’s a ‘win-win’ situation for all concerned, bar those who exclusively market themselves as bookkeepers.