USA Is Bookkeeping Still Relevant?

[Chicago]

It's 2020 and almost 2021. I see bookkeeping bootcamps on youtube and I'm on the fence with joining them. There's also the American Institute of Professional Bookkeepers and National Association of Certified Public Bookkeepers. With those programs it will cost about 1K to study and certify.

My issue with the aforementioned programs is the world is increasingly becoming more automated. If what I'm paying is going to be outdated in 1-2 years then I'll have to adjust to the times.

I'd like to see some bookkeepers chime in.

 

[kirby]

As for things getting outdated, well, if we all had a crystal ball we would move to the jobs that would be hot in the future. A 2020 study by McKinsey said that 23% of the work of lawyers can be automated by technology that exists right now. (Source CNBC) So automation can affect other fields too, not just bookkeeping.

So, I think your decision needs to include the question: 'Well, what are my alternatives right now?"

I took a look at a job website in my location and saw lots of jobs for bookkeepers. You should test the same in your location. And the idea is that once you are working you should strive to continue to make yourself more valuable by adding to your skills: for example --moving on to get the training to be a full fledged accountant or something similar.

Good Luck!

 

[KGillick]

I'm genuinely curious about Bookkeeping versus Accounting. Do Accountants do Bookkeeping as part of their job or is it two completely different things?

 

[MoralesTax]

"All accountants are bookkeepers, but not all bookkeepers are accountants". The primary function of a bookkeeper is to enter in all of the transactions relevant to any particular business. Usually, this is performed by going through bank statements and journalizing the information (commonly through Quickbooks). Then, to ensure all of the information is both correct and complete, a bookkeeper performs a reconciliation to double-check their work. Some aspects of this is automated today. For example, Quickbooks can automatically download and assist with categorizing the transactions. However, Quickbooks cannot reconcile to ensure correctness nor completion.

What about accountants? What do they do? Accountants understand the debits and credits of each transaction. Why is this important? Because not all transactions are recorded on bank statements. Some transactions occur outside of the entity (think escrow accounts), other transactions never affect cash (think depreciation). Therefore, accountants must be able to not only function as bookkeepers, but also understand the double-sided entry accounting system. Furthermore, accountants must be able to manipulate the financial information to fit whatever purpose that information is needed for. For example, each year - the business must file income taxes. The financial information must be compiled in a way that makes sense for the income tax return preparation. What if the business needs to be audited? Then the financial information must be compiled in a way that it makes sense to auditors (usually in what is known as US GAAP). So on and so forth.

Accounting is the area that is hard to automate. Artificial intelligence (as it stands today) cannot discern between the numerous nuances that goes into accounting. It can, however, categorize transactions based on historic information (a powerful tool that saves you time!), but a human operator is still required to ensure the information is correct and complete. It is the functions of an "accountant", the understanding of debits and credits, that will not only serve you better as a career path, but also make you irreplaceable when the robots come to take our jobs. Add to that an auxiliary knowledge of taxation or financial reporting, and you'll retain work long-term.

 

[planner]

Hi,
I was using a bookkeeper when using a spreadsheet to keep a record of my sales and purchase, I hated it as if took so long and things went wrong, I switched to Xero 18 months ago and wow what a revaluation! It’s now so simple to manage things as the bank feed constantly updates Xero. There is no need to use a bookkeeper any more, just an accountant to prepare the annual accounts and their job is made much easier as they can see all they need in Xero.
I highly recommend it, the subscription will be more than offset by the time saved in fiddling around old style!

 

[Roman Denisov]

"All accountants are bookkeepers, but not all bookkeepers are accountants". The primary function of a bookkeeper is to enter in all of the transactions ...

Thank you for this post! I am developer of bookkeeping software and I totally agree.

There is no way to automate accounting profession with current level of technology. Computers are dumb. With current AI they are even dumber =)

Software does not understand laws, business goals and importance of transactions - this is inherently human work. In the end of the month, sofware cannot tell if accounting was done correctly and if reports are right. What software does good is well-defined routine work - one that can be formulated as 'take clean input->process it->generate output'. The best imaginable accounting software of today would be similar to Google Translate - you feed it with invoices and it makes your taxation reports. But quality of such 'translation' is far from perfect. Software helps with draft work done quickly, but cannot help finishing it with acceptable quality. Finishing work requires checking everything in that draft plus accounting for every non-standard/corner case.

So accounting software is a tool in hands of accountant, not a replacement. Surely tools raise productivity and help accountants finish their work faster and serve more customers. This raises competition and should lower bookkeeping price in general. But just like with all other productivity growth in human history, humans find ways to use freed resources to do something new, meaningful and valuable for each other. Everybody these days have calculators, cars and translate, but life did not stop, just changed.

 

[BIG E]

"There is no need to use a bookkeeper any more, just an accountant to prepare the annual accounts and their job is made much easier as they can see all they need in Xero."
I vehemently disagree - those of you who feel that using a modern automated system for accounting doesn't create problems for accountants at year-end you are sadly mistaken and quite ignorant of the accounting process. Accounting is not just bookkeeping as much as non-accountants believe it is.
Postings and recordings of transactions incorrectly can cause more damage than it helps and creates nightmares to fix the system people like you feel is "simple and easy" . There's such a thing as "garbage in, garbage out"