Bookkeeping Apps vs. Bookkeepers: Which Offers More Value?

While we don’t have an exact date for the origin of bookkeeping, it is believed that bookkeeping was an established practice as early as 2600 B.C., with Babylonian records providing evidence that financial transactions were indeed recorded. Over the years, the practice of recording the day-to-day economic happenings of a business became commonplace. Today, owners of businesses large and small recognize the value of thorough bookkeeping.

With the advancement of technology and the existence of dozens of apps that provide do-it-yourself bookkeeping and accounting services, are bookkeepers becoming obsolete? In today’s world, does the bookkeeper still offer value?

The Role of a Bookkeeper

First, it is important to understand the various tasks that the average bookkeeper performs on a day-to-day basis, although it is essential to keep in mind that all businesses have unique needs, and therefore the role of a bookkeeper may be different from business-to-business or industry-to-industry.

Most of the time, the role of bookkeeper includes:

• Recording the daily financial transactions of a business, i.e. sales and expenses
• Managing all work related to payroll for employees
• Recording daily, weekly, and monthly credits and debits
• Handling operations related to accounts receivable and accounts payable
• Keeping record of all receipts, invoices, and other financial documents
• Reconciling financial differences in any reports

Sometimes, the role of a bookkeeper will overlap with the role of an accountant, and the bookkeeper may be able to provide additional insights for  the business regarding its financial operations, assist the business reporting, and more.

Manual vs. Automatic and Man vs. Machine

So, the question is this:  Do bookkeepers still offer value, even though apps exist that can do many of the activities above? Are bookkeepers still important, or can we rely on apps to thoroughly document all a business’s transaction, do so accurately, and save time and money in the process?
A great article published in Chron seeks to answer this question, listing three primary considerations: speed and accuracy, end-of-period reports, and data manipulation. The article delves into these issues, drawing some of the following conclusions related to pros and cons:

Computerized Options (Apps)

• Apps are faster. There is no doubt about it, apps offer automatic recording and computing services. However, this assumes that the application is directly connected/linked to the business’s accounts, and that transactions don’t need to be entered manually.
• Information is easy to access. Another benefit of using an app and computerized option is that when it’s time for end-of-period reports, these are typically available at the touch of a button, so to speak.
• Apps almost never make calculation errors. While it is surely possible for an app to make a miscalculation, part of the reason people use computers and rely on them so heavily is that errors are very rare. You can probably trust the numbers that a computerized system spits out to be accurate.

Bookkeepers

• Manual bookkeeping--that is, by hand--provides for an easier system of cross-checking information. Indeed, journals and ledgers are easier to flip through by hand, and while the method may be a bit old fashioned, it’s quite effective.
• Bookkeepers are tasked with recording information and processing it on their own, which means that they have a greater understanding of what the end result should be, and can explain the books to you at the end of the day/period. This is something an app, as great as it may be, cannot do.
• More documentation and analysis are beneficial, which is one of the reasons that many businesses today still prefer the “human” bookkeeping method. Apps may limit the types of things you can record, and are not always able to analyze the why of a transaction, which a bookkeeper will be able to do and provide more insights.

Getting the Best of Both Worlds

The best solution for businesses today is to use a combination of a bookkeeping apps and a real live bookkeeper; after all, keeping journals and ledgers by paper and pencil is a bit antiquated in today’s world.

However, hiring a bookkeeper who can manually enter information into an app, or who can manually enter information into an Excel document and then cross-reference it with the information recorded in an app, or who can provide insights into financial information recorded by an app, may not be a bad idea.

In fact, “cloud bookkeepers,” referring to bookkeepers who perform bookkeeping services with help of accounting software and add-on tools, are very relevant today. These bookkeepers not only have a solid understanding of accounting and business operations, but are also well-versed in cloud accounting tools like Xero, ZenPayroll, and Bill.com. Another must-use tool in the digital age that many bookkeepers turn to is QuickBooks, and yet another app that businesses can use in conjunction with their accountants and bookkeepers is Hubdoc.

The Days of the Bookkeeper Are Still Here

While technology has evolved, bookkeepers are still very relevant in today’s world, even if their jobs are performed with the assistance of apps and computerized programs vs. paper notebooks.
To be sure, the best bookkeepers know that to stay competitive and efficient, embracing onsite and cloud solutions for businesses’ accounting and bookkeeping needs is critical.

For business owners who aren’t confident in performing their own bookkeeping services or do not have the time to do so, hiring a professional bookkeeping service provider is recommended.