Ruth Urban, president and CEO of On the Money in Phoenix, writes about how the business of bookkeeping has changed over the years.
My mother was a bookkeeper in the 1950s and 1960s. She was good with numbers and detailed, plus the industry gave her the opportunity to work part time while she worked at her primary job of being a wife and mother. Sometimes her position was as secretary and bookkeeping was one of the tasks. These jobs required my mother to dress up each day, including hose (pre-panty hose) and heels.
Her bookkeeping jobs required her to keep large paper ledgers (maybe a precursor to Excel). An infinite number of columns and rows filled those ledgers, flowing from one page to the next. The column headings were the categories/accounts from which to select the appropriate one for each sale and each expense. In pencil, she would painstakingly enter each item and put in the appropriate column. These were the records that would go to the accountant.
My mother also paid the company bills by handwriting checks for each one. (Of course, she then recorded it on that giant ledger.) She typed up invoices in duplicate and sometimes triplicate. Ever heard of carbon paper? If there was a mistake on an invoice, most of the time it needed to be redone as there was no easy way to fix it!
The profession didn’t impress me. It was certainly “women’s work.” Men were the accountants. I thought it was easy and boring. Anyone could do it and it didn’t require a college degree.
My Turning Point
I too was good with numbers and detailed. As a shy, young woman with a business degree, I found out quickly that businesses were always seeking bookkeeping help and it was an easy way to get a job. In all cases, I quickly worked my way out of those positions into others that were more satisfying, and in my opinion, more respectable.
That was until 2004, when I failed as a business owner. With two (bigger than me) sons to support as a single mom, I had no idea what to do. I started my bookkeeping business by accident. I reached out to business owners to see what work they needed done. At that point, the ledgers were tools of the past, and I had learned QuickBooks. The clients came in at a rapid pace, and On the Money, LLC was born.
Bookkeeping Evolution: From Data Entry to Data Evaluation
People still think bookkeeping is easy and that anyone can do it. Not so anymore!
In 2018, there is no paper ledger. For the most part, automation has evolved to replace the data entry bookkeeper. I strongly believe that we need to invent another word to describe the professional bookkeeper. It is no longer possible to hire a low wage earner to do the work. If you do, it’s very possible they won’t have the qualifications to do the work. Instead of entering data, they are evaluating the downloaded data. Today’s bookkeeper needs an accounting background and a solid understanding of the accounting software used.
They must be able to look at the information and determine if it’s “garbage in, garbage out” and fix it if necessary. They need to know how to set up and use accounting software. Often, they need to be able to recognize and remedy problems on the financial statement. They also need to be able to pass background screenings because of the ease of fraud in these times. In my mother’s day, it was much more difficult to find creative ways to change the numbers since she was working with pencil and paper.
From my perspective, it’s time more business owners open their minds to the idea that the industry has changed. Businesses need a different type of professional than yesterday’s bookkeeper. Today’s bookkeeper brings much more value to a business. Having the right person to do this can make or break a business. Today’s bookkeeping is about accounting savviness, financial intelligence and understanding the numbers. Gone are the days of pure data entry by hand and giant green paper ledgers. THIS is not your mother’s bookkeeping.
Ruth Urban is president and CEO of On the Money, a team of self-proclaimed bean counters, number crunchers and calculation nerds who are forever dotting the i’s and crossing the t’s. But we are also compassionate coaches, passionate cheerleaders and impassioned mentors who care wholeheartedly about their clients and take joy in their successes.
On the Money’s mission is to help small-business owners take control of their finances by creating systems and tracking tools, then teaching them how to use those tools to make better-informed money decisions.