Is Manual Bookkeeping a Thing of the Past?
30 Jul, 20241-2 minutes
In this blog, you will learn:
- The difference between manual and automated bookkeeping.
- About whether manual bookkeeping is a thing of the past.
- Where the latest Bookkeeper jobs are and how to apply for them.
Is manual bookkeeping a thing of the past? Has technology and automated bookkeeping taken over? If so, what does this mean for the future of Bookkeepers?
When it comes to accounting, some businesses prefer to embrace technology and others use traditional means of bookkeeping and maintaining their records. The role of a Bookkeeper is varied depending on the business and if they use software to maintain records and financial affairs or manually do the process.
In today's digital world, more and more businesses are using automation and computerised software to streamline their bookkeeping and accounting. Whether you’re a fan of AI-driven automation tools or not, there’s no denying that bookkeeping automation is here to stay, but is manual bookkeeping becoming a thing of the past?
What does a Bookkeeper do?
A Bookkeeper is responsible for recording the incomings and outgoings of a business to keep track of its financial affairs. Bookkeepers retain certain documents generated by a business including those related to sales, banking documents and purchase orders as well as expenditure including taxes, wages and rent.
They are responsible for recording and supervising income and expenditure either weekly, monthly or annually in order to complete tax returns.
What is the difference between manual and automated bookkeeping?
Manual bookkeeping is a traditional method of managing financial transactions using spreadsheets and journals. A manual accounting system keeps financial records without the aid of a computer system or accounting software. Bookkeepers keep financial records by hand rather than on a computer or manually input information from receipts and invoices onto a paper spreadsheet.
Most modern accounting platforms offer automated bookkeeping, making it easier to track income and expenses without manual input.
Is manual bookkeeping a thing of the past?
Will AI replace Bookkeepers with automated bookkeeping? Despite there being some shortcomings to manual bookkeeping, it is unlikely automation and AI will fully replace the role of a Bookkeeper.
However there are advantages to embracing technology and utilising automation and it is beneficial for Accountants and Bookkeepers to understand how to use automation to do their jobs more effectively and free time to focus on other responsibilities.
AI and automation supports many aspects of the bookkeeping process and businesses that are considering adopting an automated solution can reap many benefits including freeing up time to work more strategically with clients.
Manual vs automated bookkeeping
There are advantages and disadvantages to both manual and automated bookkeeping but both can help make businesses thrive. Whether you’re opting for manual or automated bookkeeping, the most important thing to uphold are high standards. Generally speaking, the decision between manual and automated bookkeeping ultimately depends on the business’ needs, resources and goals.
Advantages of manual bookkeeping
Advantages of manual bookkeeping:
- Human element.
- Simpler for smaller businesses to keep on track of their financial affairs.
- Less expensive to set up and implement.
Human element
Manual bookkeeping relies on human judgement and inspection, whereas automated bookkeeping uses software and specialised tools to automate the bookkeeping process and manage a company’s bookkeeping.
This means Accountants and Bookkeepers can provide unique values that AI and automation don't, such as the ability to problem solve and bring their own perspective. Having actual Bookkeepers as opposed to relying on software or automated processes is also beneficial to build relationships with clients and reassure them that their money is being taken care of.
AI and automation cannot replace human interaction, personal touches or the relationships that a human Bookkeeper provides.
Simpler for smaller businesses to keep on track of their financial affairs
For smaller businesses, manual bookkeeping is often the preferred system to keep track of financial affairs. Larger businesses often see more benefits from digitised or automated bookkeeping processes as opposed to smaller businesses that may benefit from a simpler, manual system.
Manual bookkeeping is recommended for smaller businesses and those with cash accounting or fewer financial transactions; this is to make it easier to keep track of financial affairs and to make it more cost effective for the business.
Less expensive to set up and implement
Manual bookkeeping is less expensive to set up and implement compared to technological processes and automated bookkeeping. With automated processes it can be costly to train employees, repair technological issues and ensure efficiency with the constant needs for regular updates and checks.
Traditional Bookkeepers that use manual systems for clients have lower upfront costs than complex accounting software.
Disadvantages of manual bookkeeping
Disadvantages of manual bookkeeping:
- Risk of human error.
- Time consuming.
- Security risks.
Risk of human error
The human element of manual bookkeeping also presents challenges such as elevating the risk of inaccurate data from human error. Oversights, mishandling of sensitive information and common human mistakes can negatively impact the bookkeeping process.
Automation and bookkeeping software can still result in technical or compliance errors, however there is zero chance of human error.
Time consuming
Automation is known for speeding up the accounting and bookkeeping process and freeing time usually spent on simple, everyday tasks. Bookkeepers and Accountants can spend hours on manual tasks compared to automated bookkeeping and businesses that embrace technology and make it work for them.
According to a survey by pre-accounting platform Dext, 56% of Accountants spend too much time on manual tasks. Dext also found that 51-75% of tasks are predicted to be automated in ten years time.
Manual bookkeeping can slow down the accounting process compared to automated bookkeeping which is crucial to the success and efficiency of the business/organisation.
Manually inputting data and reconciling accounts can take up a lot of time that could be better spent on other tasks that benefit your practice.
Security risks
Keeping paper copies of accounts, finances and receipts can put businesses at risk of financial information being lost, stolen or easily accessed. With physical case files and documents there is a higher risk of information being stolen, misplaced or damaged, and the lack of a proper backup system can result in permanent loss of essential records.
However, it is important to note that automated bookkeeping isn’t fool proof either as digital systems are prone to cyber security risks, data breaches and hacking.
Bookkeeper jobs
If you’re searching for your next Bookkeeper job, why not take a look at the latest vacancies, or simply upload your CV to be notified when a relevant position becomes available.
Recruit experienced Bookkeepers
As specialist accountancy recruiters, we support practices nationwide with their permanent recruitment needs.
If you’re struggling to find experienced Bookkeepers, why not get in touch with Management Consultant, Lauren Bailey on 01772 954200 to see how we can help?
Who is Spencer Clarke Group?
Established in 2017, we’re a vibrant and progressive recruitment agency based in the heart of the North West.
We continually reimagine the recruitment process to challenge convention and defy expectations; from creating a better recruitment experience to remodelling employee engagement, we thrive off doing things differently and turning heads along the way.
We operate in two sectors:
In eleven specialisms:
Healthcare, Social Care & Nursing
Corporate Functions & Business Support
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