Shh…I’m going to tell you a secret. One that my industry would prefer to keep quiet. Are you ready? Bookkeeping isn’t all that hard.

It can be a bit complicated, and if you do the wrong thing there’s an outside chance that it’ll come back to bite you. But the work itself isn’t that tough. The biggest part of it is double and triple checking things other people did to make sure no one made any mistakes. But do you know what pretty much never makes mistakes? Computers.

Computer programs are taking over more and more things these days. What does that mean for bookkeepers? It means that a lot of bookkeeping work could potentially be automated at some point in the future.

It can be scary to work in an industry that could very well be staffed by robots in a few years. But, I know that a certain type of bookkeeper will survive even in a fully automated future. Which type? The great bookkeeper, of course. Why will they survive and what makes a bookkeeper great? Well, you’re going to have to read the rest of this post to find out.

What will computers be able to do?

Automation is coming. There’s no reason to doubt that. If you have the skills, you can already automate a good deal of your bookkeeping. Today, that requires you to have some confidence that you are doing it right. But, I suspect that soon automation will be more user friendly. It will be usable even by someone who has no idea what they are doing. Here are some examples of what is, or probably will be, coming:

Automation of saving receipts – This is pretty much already here. You can take a photo of each receipt and upload it to a service like HubDoc. It can read the receipt, record the information from it, and even automatically match it to the correct transaction in your bookkeeping software. Basically, it does almost everything except serve you breakfast in bed. It isn’t perfect by any means….yet. But it’s only a matter of time until it’s reliable and usable enough for any small business owner to handle on their own.

Automation of reviewing bank statements – One of the more labor intensive bookkeeping tasks is reviewing bank statements. Sometimes things don’t work, so you need to double check that every transaction is there. This one probably won’t so much be automated. But, bookkeeping software is going to keep getting better. Eventually, it won’t be worth doing double checks like these.

Automation of budgeting – One of the most valuable things that your bookkeeper can do is help you set up and stick to a budget. Creating a detailed budget varies a lot from business to business. The full intricacies of that may not end up automated. But, I think a pared down version will be here before too much longer. I envision something that will tie in with your bookkeeping software. It will create a rough budget based on your own historical spending. Then it will be able to alert you if you are at risk of overspending.

Automation of benchmarking. –  Benchmarking is an invaluable service. Budgeting is about what’s going on within your business. Benchmarking is when you compare your business to other businesses. What you need, though, is information on how a lot of other businesses do things. Getting that information has always been the hardest part. But, in this age of big data, it’s out there. In fact, most of us share every bit of our financial data with one of a handful of bookkeeping software companies. So, eventually this type of information will be readily available, for a price of course.

Why am I not afraid?

Yes, these things are services that I currently charge for. And, future automation is going to change how much my clients will pay for these services. But, I welcome these and all future types of automation. I’m not afraid that I will go out of business because I know what types of things can be automated and which can’t.

Computers are great at doing things that you do exactly the same way every time. So, they can do math or follow rules like ‘purchases from Office Max are always office supplies’. But they’re not so good at the human side of things. They can’t know how forgetful you are or keep explaining something that you don’t understand until you do.

If I don’t have to spend my time reviewing bank statements and looking for receipts, I’ll be able to focus on more important things. I’ll be able to make personalized budgeting and benchmarking plans for your business. My time will end up being even more valuable. I’ll get to focus on interpreting the data that your business produces rather than just double checking it.

In fact, that’s what a lot of bookkeeper’s do currently. They just make sure that all the numbers are there and that they are right. Those are the bookkeepers that should be worried about automation.

The Future of Bookkeeping

What will the future of bookkeeping look like? The biggest effect will be that small businesses will have more tools to be successful.

It will be more cost effective for very small businesses to have good bookkeeping. Your bookkeeping will mostly do itself! That will make it easier to be profitable. And, I hope that will lead to a boom in small businesses, but of course there are a lot of other factors in play for that.

Once your business grows enough to need to an actual bookkeeper, that person will do more than review and categorize transactions. Bookkeepers will work alongside business owners to help them grow their businesses. They’ll need to provide those ‘human side’ services that computers aren’t so good at.

Many bookkeepers may suffer as automation grows in our industry. But, the great ones will survive. Because they already focus on the ‘human’ parts of their business. And they will be able to adapt with the changes that are coming.

What does it all mean?

Automation is going to change bookkeeping. Small businesses will one day have powerful tools at their fingertips. Tools that will be able to handle most of the day-to-day tasks of bookkeeping. However, there is a lot more than that to bookkeeping today. And that will be even more true in the future.

Great bookkeepers will survive by doing more than the day-to-day. They will focus on human skills like communication, education, and empathy. These skill will not be replaced by computers.

Great bookkeepers already do much more than just track the numbers, so I don’t think it will be that big of a change for us. A great bookkeeper works to help their clients be successful. And, now or in the future, we will understand the importance of more than just double checking numbers.

If you want to learn some ways to automate your bookkeeping, download my free report: 8 Ways to Spend Less Time but have Better Bookkeeping. Or, let’s schedule a meeting to discuss what types of automation are already available to make your bookkeeping quicker and easier.