A Bookkeeper in 2012

Posted on Monday, January 30th, 2012 under Bookkeeping. 4 Comments.

In my mind, bookkeeping can be simply defined as anything related to the day-to-day financial transactions of a business. Examples include entering invoices (A/R or A/P), entering transactions directly off bank statements (eg. bank charges or HP payments), Payroll, raising payments to suppliers, entering receipts from customers, reconciling the bank, etc.

There has been a lot of discussion recently about so-called traditional bookkeepers being made redundant by programs such as Xero. This is true to an extent but not to the point where bookkeeping becomes redundant as a profession. Small to medium sized businesses are always going to have a need for their services as they cannot operate purely off a bank feed.

However, those who want to succeed in today’s environment need to be either the absolute best of the old breed or add other services. In my mind, a modern day bookkeeper is also a consultant, trainer, software specialist, implementer, advisor, and management accountant. Some accountants are providing some of these services but not all. And if they do, they’re getting bookkeepers to do the work for them.

When we speak to our clients they tell us that they want someone who can advise them on what system best suits their needs, set it up for them and show them the best way of utilising the system to fit in with their own internal processes. Sometimes those processes need to be redefined because the client is using outdated procedures, or because a change in system demands some changes.

Once everything is in place, the bookkeeper may be required to process information on a regular basis, or they may simply be asked to review a file on a monthly basis. Here is where the bookkeeper’s experience and knowledge of accounting comes to the fore. We need to be able to identify issues with P&L and Balance Sheet accounts and raise these with the client and the client’s accountant before making any accounting treatment decisions.

The accountant/bookkeeper relationship needs to be a good one in order for things to run smoothly. If the accountant has no faith in the bookkeeper the accountant will end up doing more than is needed which results in the client paying more than they should. After all, everything done should be in the best interests of the client.

What are your thoughts on bookkeeping in 2012?

  • http://www.wordmistress.com.au/ the wordmistress

    I doubt YOUR services will ever become redundant, Darren. You have such passion for what you do, not just the numbers but the success of your clients. You’re right about the accountant/bookkeeper relationship. All fingers on a hand must work together in order for the hand to be functional.

  • Cassandra

    Darren. Cudos on this post. It clearly articulates the role of the modern PROFESSIONAL bookkeeper.

    Bookkeepers should have an innate understanding of how businesses operate from a financial perspective, from the ground up. In my experience, by collaborating with the clients accountant, who take the perspective of a clients business from the top down, great synergy can be achieved for the business owner.

    One of the key differences I see between the skill set of the accountant in working with businesses, and the skill set of bookkeepers working in businesses, is that, in the majority of cases, bookkeepers have had hands on experience in business at the coal face; they have worked in SMEs developing and systemising workflows and practices, implementing policies and procedures for day to day work activities.

    Bookkeepers are often in a position to help business owners identify best practice work methodologies for financial related tasks and activities, as its something most bookkeepers have experienced and worked with first hand over their careers.

    Accountants who are often streamed into the profession from school, via university, into an accounting practice, and the vast majority, have had no first hand experience in working in the business environments that they support as accountants.

    A professional bookkeeper may work in business for 15-20 years before making the decision to step out and offer their services on a professional level. Its this experience which gives us the insight required to operate on the ground within a business to assist and support their day to day bookkeeping requirements (irrespective of what system they utilize). Its also this understanding of a business at this level, that allows us to interface effectively with a clients accountant, to bring about positive and productive results for a client.

    With the advent of the BAS Agent registration requirements, I see the role of a bookkeeper now being recognized as a para-professional, with an associated increase in the skill set and expertise that is required to operate. Any bookkeeper that just continues to work with “just data entry” will soon find that they become redundant in this ever changing and fluid environment.

  • http://twitter.com/WOODACCOUNTING Ben Wood

    Darren I could not agree more. The Accountant Bookkeeper relationship has historically been difficult. In my experience there is rarely a discussion between the too. We need to work together and tools such as Xero make that so much easier.

    Hope to speak with you at the Xero Roadshow

  • http://www.dardee.com.au Darren McMahon

    Thank you for your comments. There has been so much discussion lately that I thought I would put my view out to the world. It is a view I believe most agree with.


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