We often hear about how the advances in software and how they are so great that some commentators believe it will eliminate the need for trained and skilled bookkeepers.

But is this real or just scare tactics?

Is this more about elevating the confidence levels of business owners beyond that of which they are realistically capable of achieving?

Is it about trying to make business owners confident that they can perform their own bookkeeping functions for their own business themselves in an effort to increase the sales volumes of the developers own software products?

Software appeal and sales will increase with a greater perception of need and/or benefit to a wider group of people.   Bookkeepers realistically only number around 60,000 across Australia, whereas business owners number in the millions.  A much larger and more attractive target market I am sure you would agree.

Remember the ATO research undertaken in 2005 into bookkeeping in Australia, the results of which were published in the Australian Financial review in early 2006.   The result of the findings of this research was the catalyst for the introduction of the first nationally accredited bookkeeping course in Australia and released in September of 2007.   This also led to the TASA Act of 2009 and the registration of BAS agents in the bookkeeping domain.   Existing bookkeepers were offered transitional registration if applications were lodged by August 2010 with ICB carrying this message to the wider bookkeeping community in early 2010.

For many years prior to that point, the belief was that any business owner could do their own bookkeeping if they simply bought their own computerised software, and it was even aptly named to convey this very concept, “Mind Your Own Business”, (MYOB).    Don’t get me wrong here, I love the MYOB product and believe it to be a great product “for bookkeepers to use”, not for business owners to do their own thing without the knowledge and skills required of a qualified bookkeeper.   The promotion of this concept throughout the ’90s and early 2000’s; …“you don’t need a qualified bookkeeper to perform the record keeping functions within a business”, resulted in the disastrous state of business records at the time, and the ATO research.  A desire to to change this downward spiral heralded the need for the ATO research that was done, the subsequent release of the first ever nationally recognised bookkeeping qualification in Australia and the resulting legislation.

So what did the results of the ATO research uncover?

While I do not intend to share the entire article here, let me share just a few statements from it which I am sure you will find interesting.

• “It has been estimated that up to 90% of independent bookkeepers are incompetent and unqualified.”

What does this say to you, and what impact do you think this situation had on the individual business along with the financial decisions owners must be constantly making?

• “Industry insiders estimate that between 70% and 90% of independent bookkeepers are either unqualified or simply equipped with MYOB or Quicken courses”.

Does this mean that all of the advertising hype of the time that business owners can manage their own bookkeeping with this fantastic software was not entirely true?

• “A tax partner at KPMG, Stephen Gottlieb, said they are, (meaning qualified bookkeepers) going to increase compliance.   Mr Gottlieb said the information announced so far suggested that the new regime would benefit various stakeholders.”  (Referring to qualification standards of bookkeepers and registration of BAS agents.)  He then made the following observation. “They would also have a broader spread of tax compliance providers.” (Referring to a substantial new pool of registered BAS agents rather than just registered tax agents as was the case under the ITAA 1936).

Does this suggest that qualified bookkeepers and registered BAS agents are in reality, a valuable resource for business owners and accountants?

I do not see a great deal of evidence or even a difference between the view that all of this new and emerging software will replace bookkeepers any more than did the earlier software developments that led up to the 2005 disaster.    Software that was marketed as being a serious option for business owners to replace bookkeepers who could “Mind Their Own Business”.   I agree that these new software developments will make the job of the bookkeeper easier and more efficient, which is what we all hope that technology will deliver for us.    I am however, about as convinced that the need for skilled and qualified bookkeepers is over, as I am that the need for skilled and qualified pilots is over in spite of hugh advances in aviation technology.

Modern aircraft have a level of sophistication in their software so as to be able to take an aircraft from point “A” to point “B” without the need of a pilot.   Does this mean then we can and should dispense with pilots?   I am not sure what your thoughts are on this, however should that ever occur, then I will not be a passenger on that aircraft!   Why would one consider doing away with the knowledge and skills a bookkeeper who brings to a business, any more than one would consider doing away with the knowledge and skills of a pilot on one of these modern aircraft.  The only people who would advocate this would be people who have no real concept of the value a qualified bookkeeper brings to healthy businesses and their financial records.

Remember for a moment the QANTAS A380 jet flying out of Singapore?  Yes, one of these “fly itself” capable jets.  Consider what could have happened had there not been well trained and skilled pilots on board that aircraft.  You are right; the potential outcomes of an aircraft disaster as opposed to a bookkeeping disaster are a bit different, however the effects experienced by a business can have quite serious outcomes in both a legal and business management terms.   The results of poor bookkeeping skills, can and do contribute to business failures or financial difficulty for a business.

Many bookkeepers have seen and experienced the devastation left behind by people who do not have the knowledge and skills required to keep a business fully compliant, and the financial accounts of the business in order.    The hype surrounding software development today sounds a lot like that of pre-legislation and qualification.   The real question is; will business have to suffer the same affects as the last time, should they accept the hype of the software companies and other groups pushing the view that the bookkeeper is no longer needed.

Conclusion:   If knowledge and skills were the real issue behind the 2005 research and the problems that were identified as being the driver to up skill bookkeepers through the release of Australia’s first bookkeeping course, why would this not still be valid?    The core of the matter is, that while computers can take on the mundane and repetitive tasks of bookkeeping, like aircraft pilots, bookkeepers are still very much needed.   They are still there to insure it will all happen correctly, produce real and usable financial information on which sound business decisions will be made.

ABBS have qualified bookkeepers and registered BAS agents to provide small business with the tools they need to remain financially healthy and assist with the compliance requirements placed on them, so contact us today on enquiries@myabbs.com.au to arrange your free no obligation consultation to discuss your needs so we can show you how an ABBS bookkeeper can help your business.