Could Technology Replace your Bookkeeper?

Keeping the business' books up to date is often the most loathed task for small business owners, with many opting to hire a bookkeeper rather than face the task themselves. However, with the huge rise of Artificial Intelligence and automated technologies over the past few years, some might be wondering - could I replace my bookkeeper, or even my accountant, with a machine?

Bookkeeping is often a largely repetitive endeavour. Countless receipts are collected and recorded, invoices need to be generated and bank accounts must be reconciled to ensure everything adds up. Not only are these tasks time consuming, there's always room for human error due to the nature of manual data entry.

Fears that AI will replace our jobs are widespread, but this is a particular concern when it comes to jobs which are highly repetitive, such as bookkeeping. The emergence of cloud-based technology has already been extremely disruptive to the industry, which had been stuck with traditional methods for decades. Most tasks are already more automated than they previously were - the majority of accountants and bookkeepers use software such as Xero, Quickbooks and Sage on a daily basis, when previously ledgers would have been kept by hand.

How automated bookkeeping can save time

Whether small business owners utilise these tools themselves, or bookkeepers add them to their own tech stack, there are thousands of apps designed to save time on repetitive tasks.

Even in small businesses with a few employees, handling expense requests and ensuring all eligible purchases are accounted for can be headache. Automated expenses software such as Spendesk can be used to take almost all of the manual effort out of employee expenses. By defining your workflows and assigning teams, the system can then do the heavy lifting and allocate employee spending into the right expense accounts. As it's designed to integrate easily with other systems, you can then export all your sorted transactions and receipts into your accounting software of choice.

To keep your own paperwork in order and save the manual hassle, Dext Prepare can be used to automate data entry. Invoices and receipts can be captured using their app, and the software then extracts the required data and posts this to your accounting software. According to their research, this can save 5.5 hours of manual effort every single month.

AI powered software such as Docyt can take this one step further, by using machine learning to handle your Accounts Payable and reconciliation. The system takes your business' data from bank feeds, imports and integrations, creating personalised business insights and workflows inside their app.

For small business owners who currently pay a bookkeeper to take these tasks off their hands, switching to an affordable tech solution instead might seem like a no brainer - but there are some limitations to bear in mind.

The limitations of accounting software

Technology can streamline your processes and help to save huge amounts of time, but there are many benefits to working with a human bookkeeper or accountant that machines can't yet provide.

Although processes like reconciliation can be automated, a human being still needs to review your books and ensure everything is in order. Though software can handle complicated rules and flag obvious errors, there's no real substitute for a trained professional who can ensure you're staying totally compliant with the current legislation and can offer advice based on the data you've gathered.

As someone who knows your business inside and out, your accountant or bookkeeper is best placed to assist you in strategic decisions. Though your accounting software might be able to churn out the numbers, it requires a human touch to put the data into context for your businesses' specific situation. Ideally, a great bookkeeper or accountant will have their finger on the pulse for the wider economic situation too, which is even more valuable when making long-term business decisions.

Instead of fearing the encroachment of technology, embracing automation can help bookkeepers and business owners save themselves time - ultimately focussing on more valuable tasks, such as growing their business or planning for the future.

Should you replace your bookkeeper with software?

The short answer is, no. Whilst it's a wise idea to utilise the technology we've mentioned to help make life easier for both you and your bookkeeper, software can only solve part of the bookkeeping puzzle. Until AI can replace the empathy and personal understanding of your bookkeeper, they'll still play a valuable role in keeping your business running smoothly.