The End of Bookkeeping?
In July 2012 we wrote about a revolution in bookkeeping signaled by the arrival of systems like Xero, Freeagent and others where bookkeeping can be semi-automated via bank information being fed straight into the books.
It is a measure of the speed of change in technology that sixteen months on we are asking whether bookkeeping will even exist in five years time. To be more exact, bookkeeping will certainly exist, but we believe the activity called bookkeeping will have disappeared as we know it. In other words, it will not require any data entry at all.
Imagine if anytime someone sent you an invoice, instead of coming by post it was presented to your bookkeeping software. And imagine if, instead of having to open a letter and type in the details of supplier, amount, VAT etc to get it into your bookkeeping, all you had to do was log on on your bookkeeping system and accept or decline an invoice for it to be automatically entered into your books.
Imagine if you could click on a transaction in your bookkeeping and the proof of purchase invoice or receipt was attached as a PDF. No more sorting shoe boxes of paper and filing into months in case of an HMRC inspection!
In fact you do not even need to imagine either of these scenarios, they already exist.
Xero already allows you to attach files to transactions. Send your receipts to Receipt Bank and for £9/month they will do it for you.
Xero also already automatically posts invoices sent from one business to another if both parties have the software. So if you and I both use the same bookkeeping system, me generating my sales invoice automatically generates a purchase invoice over there with you (bar you approving it). In Australia and the US a cloud based platform is being constructed so that it doesn't matter what bookkeeping software system you use. You just upload your invoice to the cloud and it is automatically delivered to your customer's bookkeeping software.
It is surely only a matter of time before it arrives here.
Further into the future, we can see a time where every purchase made at a shop will be automatically transmitted to your bookkeeping with the correct VAT, amount, supplier, etc already entered for you.
People forget that bookkeeping and accounting was not originally invented in order to complete tax returns, it was a practice that grew up to allow business owners to manage their businesses. Perhaps when the slog goes out of it, we can stop seeing it as a burden but a massive resource of information, telling us everything we need to know about making our business successful.
That's what we are working towards at Co-.
