Let’s Talk about People!
Let’s define bookkeeping so that people stop saying its dead!
Let’s define Cloud so people stop misusing the term
Let's talk about how to respond to the changes around us.
Bookkeeping in 2014 remains a very wide term with a very broad definition.
Bookkeeping encompasses everything from the most rudimentary and fundamental tasks of opening envelopes, sorting out the mail, working out what an invoice is, data entry, timesheet processing, sales processing; through reconciliation, verification, analysis, checking, reviewing, clarifying, filing, reporting.
People are in Business
Bookkeepers do business. Business is about people interacting with other people in a business transaction. For 200 years bookkeeping has been about people in business who just want to get on with doing the business and doing it well, engaging other people known as “bookkeepers” to help them with their business systems and recording the transactions so they the business owner can know what went on, but also so they can report to the relevant government authorities about what went on.
Government authorities are people who have a different point of view (the government view) on what information they want or need in order to regulate business.
Typically business people do not know or want to know the government peoples point of view.
Typically business people engage the bookkeeper to do that re-interpretation and deal with government.
Business use Business Tools
Bookkeepers have, for that 200 years, used different tools to enable the recording, the reporting, the business system. Technology/computerisation has impacted business process for that 200 years and therefore impacted bookkeeping for 200 years. What are those different tools? In today’s world a significant tool of business is the software they use. What is software? It is a series of instructions that are given to a computer to tell it how to receive data, what to do with that data and how to then process and report that data. The software processes have been designed by people, people with a view on how the world should work in their software.
Software is Created by People
Bookkeepers are the ones that for 200 years have been working out how the tool works, be that an abacus or todays businesses/accounting software.
Bookkeepers are the ones that continue to work out how to make that software work for business. Business people will happily work with the tool if it is simple and it works for them.
It doesn’t matter how good the tool is, in terms of transaction capture, processing and reporting, many business people will reluctantly use it but would much prefer to engage a bookkeeper to do that side of the business.
Bookkeeping today is; a human working out what that human in business is doing and wants to do and working with the best software (designed by another human) to automate and streamline transaction processing to provide information and outcomes to other humans.
Bookkeepers and Accountants
There are bookkeepers who call themselves accountants. There are many accountants who spend significant time doing bookkeeping. The terms “Accounting” and “Bookkeeping” overlap significantly. “Accounting” can extend into technical areas that Bookkeepers typically are not qualified or experienced to perform. Sometimes Accountants extend their influence into areas they are not suitably experienced or knowledgeable to provide.
Fortunately codes of conduct for members of Professional Associations unanimously require Accountants and Bookkeepers to ensure they do not do work they do not know how to do.
Neither of the titles “Bookkeeper” or “Accountant” are protected terms in Australia. Neither group have to be members of a Professional Association.
Typically Bookkeeping now encompasses the running of systems (hopefully computerised) that are essential to business.
Historic Data-Entry is Bookkeeping
Some models of doing bookkeeping is all about processing transactions that have already happened into the “books” of the business. This “data-processing”, “data-entry”, “recording of history” is Bookkeeping. In some cases this is considered low value data entry work. In some cases someone still has to do it.
Business Systems is Bookkeeping
Bookkeepers continue to embrace the model of bookkeepers performing most of their work as part of the business process. The bookkeeping running/managing/implementing/integrating business system helps the business do its thing and the bookkeeping also happens.
Bookkeepers are About the People Involved in Business
Bookkeepers are consultants, advisors, processors, auditors, friends, that independent set of eyes and sometimes that other view. Bookkeepers are that person who does the stuff that the business owner doesn’t want to do (not everything they don’t want to do but certainly “that tax stuff”).
Many people are now using terms like “Trusted Advisor” and stating that professional advisors like Bookkeepers need to move to offering “advisory” services, “value added” services, moving on from compliance to “management” work. Maybe, maybe not; someone still has to do the books, someone has to make sense of what the business has been doing and how to implement a business system to do that thing effectively, efficiently and create the required records at the same time.
The current developments in technology; changing software; potentially changing the way a business interacts with other business, interacts with its bank, interacts with government is having a direct and significant impact on various parts of bookkeeping. It is an evolution. Some call it a disruption. It is positive improvement.
These software changes is one set of Humans view on how another set of Humans might interact and then report to another set of Humans being amongst others Government.
“Bookkeeping is not dead and is not needing to turn into something different. Bookkeeping continues to be Humans using systems designed by humans to help other humans interact with other sets of humans.”
“If bookkeeping is so dead why is it that accountants are now saying they want to do what bookkeepers having been doing for at least the last 20 years (business system integration)”
The Bookkeeper is the human with the knowledge, the nouse, the interpretation, the inclination to be able to interpret “Business” and “Software” and “Compliance” and “information”
See also - "Digital First - The Concept".