In days of old, before the advent of computers, the bookkeeper was tasked with tracking every transaction of a business manually, carefully recording and tallying up columns, and cross checking for accuracy. With the advent of programs like QuickBooks, many business owners (mistakenly) believed they could “handle the books.” With little or no knowledge of accounting and financial management, many business owners created a tangled mess making it impossible for them to produce a comprehensible set of financial statements for bank loans and taxes. Once a tangled mess was created, it was time, they thought, to call in a bookkeeper to straighten the mess out. Unfortunately, the modern-day bookkeeper is often a pale shadow of the old school bookkeeper, lacking accounting knowledge and the skills needed to clean up the messes of others. The result is often one tangled mess piled on top of the original tangled mess.
With the advent of electronic downloads from banks, credit card companies, and vendors, the tedious nature of bookkeeping is being replaced by efficient processes and systems that save time and increase accuracy. Although some businesses have been slow to adopt new technologies, tech-savvy business owners are embracing the change. A change that is revolutionizing the back office workings of every business, and freeing up resources formerly spent on low-value activities.
With technological advances continuing to make the need for transactional bookkeeping a thing of the past, modern accountants and bookkeepers need to be “differently” skilled. Transactional bookkeeping is still necessary in that transactions need to be correctly coded when downloaded. But, downloading and coding take far less time than the paper processing activities of old. The new accounting professional needs to be both tech-savvy and a skilled financial manager ready with an ever-expanding arsenal of skills and knowledge to create value for business owners.
Still, many business owners continue to think that they can get by with “doing the books” themselves or having a spouse, family member, or “cheap” bookkeeper handle the task. While technology makes the day-to-day transactions easier, the lack of a qualified professional providing oversight and insight in a business will always lead to lost profits and tight cash flow. The revolutionary changes in the accounting field are an opportunity for business owners to attract competent financial managers to help increase profit and improve cash flow. For the accounting professional, it is an opportunity to bring real value to clients’ businesses by being well-versed in both the knowledge and the tools to make businesses more efficient and profitable.
Transactional bookkeeping is dead. Filling the need for financial management will be up to a new breed of financial professionals who are able to bring value that guides businesses down the path to profitability and smooth cash flow.
Guest Post by Caroline Grim.
Called the Wizard of Cash Flow, Caroline Grimm focuses on helping her clients build strong, profitable businesses by employing seemingly magical financial management tools and strategies. For more information visit www.CashFlowRollerCoaster.com