Practice Management

Are Bookkeepers Becoming Obsolete?

Written by Patti Scharf

Are Bookkeepers Becoming Obsolete?It’s the argument I’ve been hearing my whole life.  Will machines replace people?  And now with the proliferation of cloud accounting software, our industry is asking, “What is happening to the role of the bookkeeper?  Will cloud accounting automation make bookkeepers obsolete?”

Yes, it will.  Or rather, it will force bookkeepers to evolve or risk extinction.

The traditional bookkeeper role went something like this:  client gives you a stack of receipts and paper bank statements at some point after the close of the month and/or after you hounded them mercilessly for the documentation that was needed.  At best, this would be about two weeks after the close of the period.

Then the information all had to be keyed into the accounting software.  Depending on the volume of activity and the bookkeeper’s schedule, this could take another couple of weeks, so by the time the information was returned to the business owner, the financial information was, at best, already a month out of date.

Now that people are used to real-time information anytime and anywhere, business owners’ expectations have changed, and if bookkeepers don’t adapt their methods and tools, they will soon find themselves with a dwindling client list.

In today’s world, information is provided real-time through automatic bank feeds and simply by logging into a various financial websites (or better yet, but signing up at Hubdoc and having all the PDF information pulled for you).  It’s not unrealistic to have the information necessary to keep most accounts reconciled every single day and have the books closed within a day or two after the close of the month.

However, the improvements everyone sees in efficiency and being able to provide real-time information is just the beginning.  I would argue that the role is changing even more than that.  Traditional bookkeepers as we’ve known them are going away entirely.

It used to be that a good bookkeeper had solid accounting knowledge combined with quick data entry skills, and the best were also very knowledgeable about accounting software as well.

Today’s cloud bookkeepers must be knowledgeable not only about accounting software but also about a ton of other add-on tools that could connect with that accounting software to improve productivity, eliminate data entry, and provide good results for the clients.  They need to know how to evaluate them, use them, and train their clients on them.  They need to provide more customer support for their clients and be able to oversee the process of data flow.  They need such a strong fundamental understanding of both accounting and technology that when exceptions do pop up (as they invariably do), they need to know how to deal with them and fix the system going forward.

And then, when all the information is into the system and clean and reconciled, the accountant needs to be able to interpret the information for the client.  Long gone are the days when the business owner would receive a set of financial statements (that they didn’t know how to read) as proof of a job well done.  More and more they expect to understand what their numbers are telling them about their business.  And if you can’t do that, someone else will.

So if you’re a bookkeeper who want to remain relevant as the cloud accounting world expands, what are some things you can do to stay on top of your game?

  • Make sure you have a solid understanding of accounting.  Know your debits from your credits.  It’s not enough to just know QuickBooks.  You actually need to understand how income differs from liabilities so that if something gets imported or coded incorrectly, you’ll recognize it and be able to fix it.
  • Develop a solid understanding of how businesses fundamentally work.  Learn what accounts payable and accounts receivable actually are and in what ways they are important to the client.  (Hint: cash is king.)  Know what purchase orders are and why companies issue them.  Learn about different entity types and why one is more appropriate for a particular client than another.  Learn the difference between cash and accrual bookkeeping.
  • Develop a solid understanding of how your clients’ businesses fundamentally work.  Follow how documents move within the company from the beginning to the end of their accounting process.  This, more than anything, will help tell you what needs to be optimized and what can and needs to be automated.
  • Evaluate the available cloud accounting tools.  Start by finding a solid general ledger (we use Xero).  Then work on solving one problem at a time by researching add ons and developing your arsenal of tools… accounts payable (we use, payroll (we use ZenPayroll), and so on.  Make sure they integrate well with your general ledger!  Talk to peers to find out what they’re using and what they like and dislike about them.  Set up demos of products that you think might be a good fit for your clients, ask lots of questions, and take any and all training on the products until you are a rock star.
  • Pick your niche and stick to it.  If you focus on a niche, you can use five to ten core best of breed products for all of your clients so you can better standardize your process and don’t have to become an expert on 30 different add-ons.
  • Get involved in the accounting technology community.  I know I’m preaching to the choir here a little bit, but I’ve not found a better source of more well-connected, informed people regarding accounting technology than this network of people.  This is a valuable resource and a great place to start.

About the author

Patti Scharf

Patti is a blogger, speaker, and thought leader in the accounting technology industry and is the co-founder and Chief Controller for Catching Clouds LLC. She is a CPA and holds several current software certifications: Xero, (Guru), QuickBooks Online, and FreshBooks and was previously an Advanced Certified QuickBooks ProAdvisor. She absolutely loves designing effective accounting systems for ecommerce businesses and is committed to advancing the artistry of accounting through the use of technology.


  • Spot on! Traditional bookkeeping and accounting services are swiftly becoming history. The great thing is that all of this new technology really enables us as CPAs and accounting/bookkeeping professionals to provide more valuable insights to our clients than under the traditional model where they drop off their info, run & repeat.

  • This is such a fresh perspective rare to see and am in sync.

    I think the term bookkeeping doesnt do justice to the job now. Maybe to add our own experience, we have seen bookkeepers using cloud automation managing more clients and serving them better. Automation can eliminate data entry but it cant/shouldnt eliminate manual thinking and human genius. So I believe the best bookkeepers will only be better and never go extinct.

    Am representing an automation solution @zapstitch and we have been working with a lot of bookkeepers who reflect the sensibilities that you shared. From the business owners perspective, they highly respect bookkeepers who help in financial projections and strategic decisions. No longer is data entry a job requirement for fast growing businesses.

    This is a quote from one of our top customers (who is a business owner) “My bookkeeper is the backbone of my business. She points me towards the next step and tells me where the next dollar should go. She is my mentor most days”

  • A bit off the subject, but I am very curious Patti: You are a QuickBooks pro advisor, and certified in QuickBooks Online, and yet you are using Xero for general ledger, for accounts payable, and ZenPayroll for payroll? Three separate systems instead of one (QuickBooks Online)? How is QuickBooks Online so inferior that the inconvenience and inefficiency of using 3 separate systems to replace it is desirable?

    • Hi Dan – Just to clarify, I’m actually not an Advanced Certified ProAdvisor anymore. I let that lapse when we decided to use Xero exclusively as our general ledger.

      As for QuickBooks Online (QBO) being a replacement for and ZenPayroll – I completely disagree. You can compare Xero and QBO to choose the tool that works best for you (that’s a whole separate discussion), but QBO does not process bills with a full approval process nor does it process payroll without its own add-ons.

      I would also argue that it’s *more* convenient and efficient to have separate tools… as long as they provide you with more needed features and have a solid integration with the general ledger. In that way, you can use the best of breed for the functionality you need without having the duplicate entry that I think you’re assuming exists by using more than one tool.

      I think ZenPayroll is the perfect example. I used to use Intuit Online Payroll for my clients until it became unwieldy when we still had to collect signatures on paper returns and mail in payments for the state unemployment and payroll tax local returns. Compare that with a service which handles ALL electronic filing and payments and then automatically posts the payroll in the general ledger for us. It’s slick, easy, and definitely more convenient and efficient that the way we used to do it.

      The assumption that one tool is more efficient than three is not necessarily accurate. We are always looking for the right solutions to fix our clients problems, so if QBO was able to do everything we wanted, we’d be using it.

  • Good article. Yet the assumption is made in the writing small business owners need and want complete and accurate financial reports on a daily basis, that small business owners actually manage by financial reports, and that keeping books electronically promotes productivity and increases competition. Personally, I think the IT industry is driving the notion bookkeepers will become obsolete (as well as accountants) based upon technology. Reality is, the tax code drives business, not IT. Technology is only a tool, an expensive one at that. Bookkeepers are here to stay, in my opinion, because small business needs are answered by a strong economy that supports it, not by private industry capitalizing on small business. The value of bookkeepers is undermined by IT industry, to sell products and services, when in fact, the value of bookkeepers may be on the rise as a market.

    • Hi Michele – I do agree that bookkeepers are here to stay, but I think their role will soon be drastically different than it was even five or ten years ago.

      It’s my opinion that business owners’ desire to have current, accurate, and actionable information at their fingertips is not at all new. The difference between ten years ago and now is that business owners didn’t feel like there were any options then whereas now they see that they can log into their bank to see their bank balances… so they start to wonder why the heck they can’t they have real-time information on the performance of their business as well. They are expecting more, and the IT industry is helping them get there. The IT industry can’t push something on them that they don’t want. The effort would fall flat. The fact that cloud accounting has become so popular is evidence that the need exists in the market.

      As for the tax code driving business… I don’t know a single business owner who started a business because of the tax code. Ok, maybe tax professionals. But really, that’s it. I do agree that, in the past, the bulk of business owners only seemed to care about getting their books done so they would have the information they needed to file a tax return. But in my opinion, that’s because they could never get what they *really* wanted – real-time information and guidance, and as a result, business finances became a matter of compliance, not a management tool. Now that they have a choice, I see them choosing cloud accounting. It’s up to the accounting profession to rise to the opportunity.

      • Patti, discussion over bookkeeper value is long overdue. Corporate America does not use bookkeepers; it uses accountants and financial analysts. Small business uses bookkeepers and often decries how incompetent bookkeepers can be because there is no one school of thought for it, yet use unskilled family members to account.

        Business, large or small, is a legal entity granted status within the tax code, therefore, driven by tax code. You have to be licensed to tap into the economy. This original definition of small business in the economy is all too often misinterpreted by the purpose of small business in the market. Small business owners may be resentful they feel like they work for the IRS, the fact remains, pay taxes or die in business.

        Hence, a market for bookkeepers and accountants is here to stay, accounting is the foundation of every business. Technology is not a robot to replace data entry; the hype around technology is to have it for the sake of having it, not that it is essential to business as a legal entity or its competitive edge in its industry.

        The fate of small business is really the question and relative to your article, is not hinged to the economy or market by role of a bookkeeper. Small business owners, in my experience, do not ask to delegate its financial productivity online any more than it cares to place its data in a cloud. Most want government and big business out of its daily operation, but alas both have no issues with violating small business boundaries. Small business owners are the last to promote accounting much less accounting software and its counterparts.

        Virtual accounting is with us, and I agree it has benefits for improved professional relationships between small business and accountant type. Bookkeepers can offer more education, more skill, more experience in support of small business, but in actuality, credibility in the market of the bookkeeper occurs through convertion to an accountant.

        The IT industry is promoting virtual accounting by selling it as a service to replace the bookkeeper. All small business needs is a product. Accounting software companies are changing rapidly to service models in order to drive the same highway as IT headed into the cloud. It may look like IT and software companies support small business, but a step back from the excitment and rapid change, you might find, like I do, small business remains unchanged in terms of its perspective on accounting and is more heavily burdened by the change. Small business owners are notorious for not wanting anything to do with accounting, for mixing personal with business, for keeping its revenue close to its vest, and accounting in its head, to indicate IT is simply responding to its needs as if its needs were defined by small business owners. What is occurring instead, is classic: a need is being created by technology to capitalize on small business revenue streams.

        Let us look at the books. How much was spent on technology 10 years ago in small business? Today? I saw sticker shock on the face of one business owner whose QB service of about $700 was replaced by an annual fee of $1799.00, with the additional threat that the program purchased for $5,000 was unsupported and will be outdated in 3 years. QB is driving small business where the technology is. I, too, was a ProAdvisor, and QB traded me in for its own subscription. Virtual should be cheaper, not more expensive for small business. IT could market bookkeepers and accountants, to ask lay and professional, to meet the needs of small business. Firms could expand. Instead, IT went direct, and threatens jobs for lay and professional alike.

        From my vantage point, small business didn’t ask for anything, in fact resisted virtual, changes slow, and is being capitalized by industry that is moving rapidly and dominating the small business world.

        This is why I say, it is not about the daily operations of small business that is in question, whether or not the value of bookkeepers or the market share of accountants are threatened, instead, it is about the fate of small business in general. IT has taken control and many jump on the bandwagon; that doesn’t mean it is in the best interest of small business in which bookkeepers find community, status and income.

        • Hi Michele – interesting perspective, and thank you for taking the time to respond. I agree with some of your points, disagree with others, and largely believe that some of your comments require appropriate context to be accurate.

          I still don’t believe that tax code drives business. That’s the tail wagging the dog. Yes, it’s a compliance reality for all small businesses, and some owners may feel like they’re only working to pay their taxes, but nobody thought, “I’d really like to pay some extra taxes. I know… I’ll start my own business so I can do that.” Many business owners set out wanting to work for themselves or created an inspired product or can provide a unique gift and wanted to bring it to the world. Tax is an afterthought for most businesses, not a driving force.

          But I agree, yes, accounting is here to stay. But here’s where you and I differ in opinion: “…technology is to have it for the sake of having it, not that it is essential to business as a legal entity or its competitive edge in its industry.” I can’t even conceive of an ecommerce business who would be able to compete by using a bookkeeper who didn’t use technology. Or any business, for that matter. Like it or not, computers are a mainstay in accounting systems today.

          The question becomes what is the best technology to use to achieve the business’ goals. Cloud accounting tools improve communication and collaboration between a business owner and her accountant (bookkeeper, CPA, or what have you), and that’s why it’s so popular.

          “Small business owners, in my experience, do not ask to delegate its financial productivity online any more than it cares to place its data in a cloud.” I find this interesting because every single client who has sought out our company has specifically been looking for a cloud solution and most have mentioned that they came to us because their current accountants did not understand their accounting technology needs and/or were unable to support their business in real-time as they wanted. The market is changing even if you haven’t experienced it yet.

          “The IT industry is promoting virtual accounting by selling it as a service to replace the bookkeeper.” If you replace “the IT industry” with “Intuit,” I’ll agree with you. They absolutely do that all day long. But there are other companies out there, and Xero is a great example, who realize that the success of a small business is greatly influenced by the involvement and guidance of accounting and finance professionals. They are building their software upon the idea of collaboration between those who can help make a business successful, not as a do-it-yourself product.

          “What is occurring instead, is classic: a need is being created by technology to capitalize on small business revenue streams.” I think we may have to agree to disagree on this one. I still think technology is responding to a need in the market. I’ve literally been waiting a decade for the technology to catch up to where it is now. (And it still has a little bit further to go.)

          “How much was spent on technology 10 years ago in small business? Today?” Technology costs are an interesting topic. When I started in a small business’ accounting department a little over 20 years ago, there were three full-time employees handling what I think could be handled today with less than one person using today’s technology. And – everything would be handled way more quickly and with less errors. Which is more expensive? Higher tech costs or triple the labor costs?

          Here’s the other thing. Technology has absolutely leveled the playing field giving small businesses the computing power that used to be reserved only for the ultra-big players who could afford it. Even though people are spending more money, it’s a huge return on investment compared to what they used to have to spend to get the same thing.

          “I, too, was a ProAdvisor, and QB traded me in for its own subscription. Virtual should be cheaper, not more expensive for small business. IT could market bookkeepers and accountants, to ask lay and professional, to meet the needs of small business. Firms could expand. Instead, IT went direct, and threatens jobs for lay and professional alike.” I think you’re still talking specifically about Intuit here. Xero does market bookkeepers and accountants, and we provide feedback daily about ways they can improve their product. And we talk to actual humans who listen to us and incorporate our suggestions.

          And finally, I do actually believe that cloud accounting is the way to go, and I absolutely believe that it’s in the best interest of small businesses and not just a construct of the IT world. I also believe that small businesses can’t do it alone, and bookkeepers (and all other accounting professionals) need to adapt as the industry changes if they want to stay in this space.

          • >Technology has absolutely leveled the playing field

            not really. i think you’re making arguments that on the surface are sensible and logical however not connected extensively in real life. for example, it’s 2015 and half of small business in the USA don’t even have a website, google it. it’s simply not imperative for small businesses to have a cloud based accounting system. i understand you then reply saying, ‘well their at a competitive disadvantage, etc.’ to which i say, not really.

            small businesses thrive despite all sorts of inefficiencies in their model. i’m familiar with numerous small law and financial firms that will never ever no matter what place their data on servers other than their own, on site (security).

            sure, intuit’s a near $30Billion company and they can afford to absorb the financial fallout and damage of a potential security breach (as we see with turbo tax). what you’re not speaking to, and not prepared to speak to is the cost to a small business who’s using xero or QBO, who suffers a security breach.

            there are a lot of sensible sound valid reasons a small business will never ever adopt to an app like Xero or QBO. “efficiency” is not everyone’s goal, especially if it comes with a measure of risk and exposure.

          • I strongly agree with Patti. I have worked as a CPA in tax and accounting and also as a Controller in startups for over 15 years. Many of my current clients are craving the insight and reporting that is now available at an affordable cost via cloud accounting ecosystems – including the attorneys. The thing is many of them do not have any idea what options are available to them and most traditional CPA firms do not know either. There is a real gap here. This is why I started my own company this year – it is an exciting time for Accountants and small businesses.

          • Hi McKinsey – Thanks for your thoughts and additional perspective.

            I Googled the article you referred to (from about how more than half of small businesses don’t have websites, and just to be clear, the premise of the entire article was that “with more people searching for businesses online and on their smartphones, companies without a site may be missing out on extra business.” So even though there are lots of small businesses who haven’t made the jump, that doesn’t mean it’s a good idea or even that the trend is staying the same. The barriers to setting up a website are so ridiculously low now, there’s really not a good reason not to have one, and that’s why the percentage of businesses who don’t have websites keeps dropping each year.

            Further, for small businesses that don’t have a website, you’re likely talking mostly about microbusinesses – businesses that technically exist but are so small that they aren’t typically employing bookkeepers anyway and/or they only have CPAs involved so they can get their tax returns prepared at year-end. These are typically people who work for themselves but don’t really have a “business” (i.e., if they stepped out of the business for a few days, weeks, or months, it would completely fall apart). This isn’t really the demographic I’m talking about in my article. I’m talking about small business owners who treat their company like a business and are interested in its growth.

            I actually agree with you that it’s not imperative for small businesses to have a cloud based accounting system. It also wasn’t imperative for people to have email 25 years ago, a home-based computer 20 years ago, a cell phone 10 years ago, or a tablet 5 years ago.

            Now let’s talk about security which is a huge issue. I always find it ironic when people say they would never ever put data on servers other than their own. First of all, where is their email hosted? Anyone who uses gmail is already in the cloud. Do they ever log into their banks to get bank information? Bam. Their data is in the cloud on someone else’s server.

            And how about the small businesses who place their data on their internal servers because they feel so much more protected by doing so? Most of these businesses haven’t invested even $1,000 to put a firewall in place. Or they use one password for all of their logins (like [email protected] or 123letmein or opensesame), written on a piece of paper stored under their keyboards instead of using a solid password vault like Last Pass. Passwords which are meant to protect both local and cloud data is a small business’ biggest vulnerability, one that few small businesses address, preferring to worry about some external cloud security threat instead.

            Small businesses are actually increasing their security by putting data in the cloud where cloud providers such as Xero or Rackspace will spend tens or hundreds of thousands of dollars per month just on security. But small businesses get to ride that security train for only $30 – $100 per month. Quite a deal.

  • Quickbooks Online would benefit from and Zen Payroll add-ons, as well. There is nothing anything standard that accomplishes the function and Quickbooks Online payroll is not very robust.

  • This discussion is worth having, in my opinion.

    The definition of small business cannot be made solely by professional experience within the accounting industry any more than by third party interests in small business revenue streams that define small business by annual revenue and number of employees. The value entrepreneurs place on accounting cannot be treated equally.

    From my vantage point, IT creates a need to create a new revenue stream and other companies jump on board. Entrepreneurs have always had the opportunity to value accounting and use technology. Since bookkeepers are hired by small business, not large, the value of accounting to small business can be related to value of bookkeepers within small business. Small businesses do not value bookkeepers, nor do CPA firms in general, hence, a no brainer sell for IT to promote technology that replaces unwanted overhead.

    I am not optimistic small business can survive everything in its path. It is an economic issue when we speak of industry, markets and labor forces small business engages. If the demise of bookkeeping is because of technology or because small business does not value bookkeepers, is a chicken and egg riddle to me.

    Had small business been doing its due diligence in its accounting its arguments to win against mandates from carrying insurance, to providing 1099’s to the IRS, to paying sick leave, etc might have held clout. These mandates come down to pull hard earned revenue out of small business in the same way IT and the accounting industry capitalizes on small business. Small business arguments resounded corporate arguments that declared undefined expenses to comply undermined business. Had small business been on top of its bookkeeping – not just tax filing – its argument may have been stronger as the argument would be defined. Bookkeepers can make the argument.

    Bookkeepers are not just data entry personnel without knowledge of accounting or software. As stated before, the value of bookkeepers is related to the value of accounting small business places in it. IT takes advantage of small business at the expense of bookkeepers, in my view.

    I am grateful for the article that opens this discussion.

  • Good points. My husband and I are small business owners, as well. It helps as an accounting professional to have hands on experience working in and owning a small business. Many traditional CPAS do not have that experience. I agree it is a great discussion!

  • Well, I’m going to step into this discussion, gingerly. I’m not a bookkeeper OR and accountant, although I have extensive experience in the area (as the author of accounting software in the past, and as a technical advisor to many accounting professionals over the years). And, for the majority of my adult life I’ve been the owner of a small business.

    I’ve seen things evolve from using early 8-bit microcomputers with a single floppy disk drive up through the Internet and mobile revolution that we are going through now.

    Sometimes people get hung up on labels: “bookkeeper”, “accountant”, “accounting professional”. I think that the point here is that the way that we handle the tasks of managing our businesses, of dealing with business practices and how we generate our tax and financial statements, how we manage inventory, is evolving. Many businesses don’t yet use online software of any sort, but more do now than before and the percentage is growing rapidly.

    Accounting and technology professionals of all kinds need to understand the new technologies that are coming along, so that they can provide the best recommendations to their clients. The way we manage businesses is changing and many of the tasks that we performed manually before are becoming easier to do with automation of various types. Few people manage their businesses the same way that they did back in the 70’s when I started my first business, and we are going to see many more changes in the coming years.

    “Bookkeepers” won’t be obsolete, but the way that they work with clients is evolving and it is important that they learn about the new technologies that are coming out, even if they might not use them currently.

      • Charlie,

        “I could not agree more. Bookkeepers will not be obsolete but they way they work with clients is evolving.”

        Rather than a traditional bookkeeper. Accounting firms are able to offer ‘accounting & bookkeeping’ type of services turning those traditional bookkeepers into super admin options for small businesses as they know the “books” and they likely know the “operations”.

        Because of technology and the nuances of how small business are operating more efficiently, I only see the bridge from the annual accountant duties to the day to day record keeping and reporting getting closer and closer. The way people are choosing to operate and the technology that is available year and year out continue to drive the typical bookkeeper and typical accountant to meet in the middle on providing solid solutions for clients.

        The small business owner who is paying 30-50k per year for bookkeeper or clerk can now outsource to his accountant. Hence, the bookkeeper term vanishes but the duties are still there in a different ‘title’ and done a little more differently.

        Great conversation!

    • I agreed with Charlie. Although I still call myself a bookkeeper even though I hold a B/S degree in accounting, I stopped sitting there and key in each words into accounting system. I move to work on assisting small businesses in bookkeeping.
      Since I knew Charlie and this group, I changed the way I work completely. I have to spend a lot of time on learning new technology and keeping up with it besides my accounting skills. Any week without spending time on this, I know I am really behind.
      Charlie, thank you for sharing.

  • HI Patti – nice article. I have one comment that may help bookkeepers stay relevant. Learn how to support your client’s financial endeavors by staying current and processing tax work. To be a bookkeeper, one can indeed utilize the cloud applications and the governing regs don’t change that often. But to have to hand that client’s records over to someone else because you don’t do tax work is a huge takeaway for any client. Just my opinion as a fellow CPA.

    • Hi Kevin – thanks for your thoughts.

      I actually think there’s a lot to be said for specialization. Our firm works closely with tax advisors who love what they do so we can focus on doing what we love to do. For most of our clients, we *feel* like a one-stop shop without actually having to *be* a one-stop shop since we act as the liaison with the tax advisors.

      My personal opinion is that when you try to be an expert at everything, you end up being an expert at nothing and wind up doing a disservice to your clients.

  • Technology is constantly evolving and changing. Bookkeeping isn’t the first career to experience radical changes in the face of evolving technology, and it certainly won’t be the last. Your last point about becoming involved in the community I think is especially important and worth extra emphasis. It won’t be enough to simply adapt to the software currently available; to maintain your relevancy you’ll need to constantly stay up to date on the latest technology. Personally, I think it’s an exciting new turn for us!

  • Interesting article. Bookkeepers might be here to stay but it’s exciting to see the new ways to keep a record. Thanks for posting.

  • I left bookkeeping as a livelihood this year. I left not because my skills became obsolete but because bookkeeping is now in the hands of CPAs; small business bookkeepers in accounting can no longer compete on the level of technology with firms. Additionally no evidence exists accounting clients change thinking about accounting or trust technology more than a personal bookkeeper. IT and accounting go hand in hand as partners but the driver in accounting that is technolgy drives costs up in accounting and makes accounting dependent upon technology rather than upon the client for business. Technology drives the market to abandon bookkeepers and makes clients out of accountants. Technology in accounting has become indispensible. I choose to become dispensible rather than jump like a salmon upstream in IT revenue streams. Accountants solve financial problems and build rapport with humans, the core of accounting. The core of accounting is in the economy, not in technology.

    • Hi Michele,

      Thanks for responding.

      You have an interesting perspective, but I’m going to respectfully disagree with your premise that “small business bookkeepers in accounting can no longer compete on the level of technology with firms.” I don’t think anything could be further from the truth.

      Cloud accounting has leveled the playing field for big and small firms. Now with a small investment of $10 – $200 per month, a bookkeeper can have enterprise-level tools and security that used to be reserved only for deep pocket investments of tens of thousands of dollars by the big firms.

      I personally think (and have seen this over and over in my own firm) that small business owners will be led into a false sense of security that accounting is do-it-yourself… until they realize that there is an art and a science to proper accounting. They will also realize that even with technology, it still takes time to stay on top of their books… which most entrepreneurs hate doing (plus it takes away time from them doing what they love and growing their business). And even if they take the time to do their own accounting, they still need help interpreting the end results.

      In my opinion, the trend of clients moving more toward the CPAs for their bookkeeping is because of the clients’ desire for higher level advisory services. Even if they are doing most of the bookkeeping themselves, they are looking for CPAs to keep them on track, make sure they aren’t screwing things up, and help hold their hands as they look to the future.

      I do agree with you that “accountants solve financial problems and build rapport with humans, the core of accounting,” and the most successful ones are the ones who use technology to leverage their time. These accountants are spending less time number-crunching and more time interacting with their clients to help them solve the problems they’re facing.

      • Patti, thank you for a prompt and thoughtful response to my post. Your points are well taken as an assessment of what works for CPA’s.

        However economic reality faced by independent bookkeepers is the CPA expands tax preparation and financial advice to bookkeeping which costs jobs for the latter. Firms have always had an inhouse component of bookkeeping which is now exploited by the driver IT. The days of an independent bookkeeper preparing books for tax preparation or audits are absorbed by firms. Enrolled agents do the same. This direction means independents lose in competition or can join with firms for less pay and potential for growth, i.e. lost small business in economy.

        It cannot be a given a subscription cost of $10-200 a month is sustainable for independent bookkeepers. The business model for subscription replaces one time purchases and technical service contracts as well as certification for bookkeepers in the market. Firms can absorb subscription costs at a savings against hardware, applications and technical service whereas this is not true for independents growing a small business.

        The “art and science” of accounting equates to earned and increased costs to clients. Convincing business owners it is in the best interest of its business to move in the direction of IT drivers is a false choice. The driver of IT offers no choice to do business other than the IT way. Firms are best positioned to take advantage of market shifts caused by the one way path paved by IT.

        The economics of the debate over are bookkeepers obsolete is not a perspective or theory, interesting to debate in terms of taking advantage of market drivers, etc. Instead a reality is present over being driven out of the market and out of an economy that has never favored bookkeepers and now can be replaced by technology. For example, it is not interesting that an assessment of my business finances, niche of virtual accounting in business decades before IT drivers, and value in the market for bookkeepers rendered harsh reality of losing my livelihood. I applied at CPA and enrolled agent firms, the same who gladly accepted my referrals, but either could not use me because of technology or pay me a fraction of what I earned as an independent.

        There are two sides to every coin and a debate might be advanced by answering both sides not by agreeing or disagreeing, but rather by exploring economic reality of the choices accounting persons make willingly or are forced to make.

        • I’m sorry to hear that you feel forced out of your skilled profession. I think this is a great fear that many others share, and it’s unfortunate that you feel it has become a reality for you.

          I do still think there is a large opportunity for CPAs and non-CPAs alike in this new economy. Some of the biggest firms using Xero (the accounting system we use in our firm) are not CPAs and have decidedly non-traditional firms built largely on bookkeeping. Like us, many don’t even offer tax services. And many of those same firms are growing quickly, hiring, and paying well with good benefits (check out

          There is a new budding economy that is rising from the old. I think you just need to know where to look, and you need to be willing to embrace technology as your ally instead of viewing it as your foe.

  • I’am considering starting a virtual bookkeeping business. I have bookkeeping experience. I taking a bookkeeping course now. What advice do you have for a newbie like myself?

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