How can technology help with bookkeeping?

How can technology help bookkeeping?

Over the years, technology has actually revolutionised the way bookkeeping is done. Bookkeeping as we know it began in Italy, where in 1494, Luca Pacioli described the three books we all use today: the day book, the journal and the ledger. These were all physical books where all transactions were written down.

Today most bookkeeping is done electronically using specialised software, although some businesses do still use physical books. Software such as Xero or QuickBooks are now key to bookkeeping and provide help in the following ways:

Automation and Efficiency

With cloud-based software, your financial data can be accessed from anywhere in real-time, allowing you access to important details on your business wherever you are. This also allows for bank and credit cards to be integrated and means that transactions can be easily synced to the software, which is a huge timesaver. As well as automated data entry such as this, the possibility of manual input errors is greatly reduced.

With the software being cloud-based, you’ll access them through the browser, so there’s no worry about compatibility issues with whatever operating system your using and you don’t have to worry about whether you have the appropriate tax preparation software for a Mac or otherwise.

Improved Accuracy

As well as the reduction in data-entry errors mentioned above, accounting software is capable of detecting inconsistencies and potential errors in the financial data, allowing you to identify potential problems earlier.

As many feeds and updates are happening in real-time, this ensures that the business financial information is always accurate and up to date.

Enhanced Financial Insights

It’s now really easy to generate a whole range of reports from modern financial software. You can also compare the same reports from different time periods, highlighting the differences between them. With these capabilities it’s much easier to analyse the data and identify trends, see what areas of the business are in need of improvement and generally just make much more informed business decisions. 

Collaboration and Accessibility

As mentioned earlier, with cloud-based software, there is much more scope for collaboration, allowing multiple users to access and work on financial data simultaneously. This also allows for mobile access, so you can manage finances or access the financial information you need on the go. 

Security and Compliance

Obviously handling the financial data of businesses or individuals means that you have your hands on some sensitive information. All modern software has data encryption that protects against unwanted access.

As everything is backed up and recorded there are automatically produced audit trails, tracking all changes to the financial data, ensuring transparency and compliance.

While the above mostly concerns software specifically made for bookkeeping, there is a lot of other technology out there that can make things easier.

For example, Google have a whole suite of products that can help with collaboration, communication and productivity. For example, the chat function Is great for sharing small snippets of info or checking on a status, a shared drive is great for collaborating on documents and saves a lot of back and forth, and everything is connected within the organisation. It’s a real productivity booster.

There are some great Practice Management software packages out there now and we’re in the process of upgrading. Whether it’s Karbon, Uku, BrightManager or another, there are plenty to choose from packed with great features. UPDATE: We opted for Uku, as it met our needs well, but the others that we looked at have fantastic functionality too.

Another of our favourites is Timr, which allows us to record how much time we spend on each client. Useful for us to know but also makes sure that our costs are open and accurate. This is great for tracking time if you don’t want to go for a full on practice management software, and it also has an app, so you can track time on the go.

Dext is a great piece of software for handling invoices and expenses. It’s AI driven and has a 99% success rate for extracting data from invoices, receipts, statements, etc and syncing it with your accounting software.

Nordpass is a really useful tool for saving passwords and other sensitive info. It’s hard enough trying to remember passwords for multiple apps, websites, profiles, etc. but when you have multiple clients too and have different login details on the same apps, websites, etc. then some method of secure password storage is a must. Using XChaCha20 encryption for protecting data, you know that your information is secure.

We love reMarkable, which is a digital notebook (which feels like paper), on which you can write on it like paper, but then convert to typed text if you want to save it or send it. You can make notes on meetings as if on paper and file them on your laptop or send to others. It’s great for our quest to go paperless. You can also upload templates, so if you have a particular format for meeting notes you can put this on it and use it for all your meetings.

Wireless headphones, really handy when you’re on hold to HMRC for ages. (we all know this feeling) and you can keep working or make a cup of tea while you wait.

A wand scanner is a small and very handy scanner. When scanning multiple invoices it is quick and easy to use and when you’re done it can be put away easily as it hardly takes up any space.

Perhaps not the most modern of technology, but the accounting calculator is a must have. Big, pronounced buttons make calculations so much easier.