Is there still a case for manual bookkeeping?

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With software tools like Sage and QuickBooks so commonplace both among businesses and the outsourced accountancy service providers they use, not to mention the everyday use of Microsoft Excel, it’s easy to forget what the first syllable of the compound word ‘bookkeeping’ means. Many people still active in the business world today, however, will remember a time when accounts were managed without computers at all, and indeed some still prefer to turn to their trusty, physical books.

Keeping records by pen and paper is fine as long as you can keep on top of it, although that obviously becomes harder the larger your business it. Here are some pros and cons of doing it:

Advantages

• A bookkeeping log book is cheap and easily available from stationery retailers, so it spares your business some of the expenses that come with specialist accountancy software. It’s also pretty easy to understand and fill in, so it’s a task that can be managed by somebody less au fait with computers.

• It can be completed on the go. Some businesses, like retailers and anything based outdoors, spend little time in front of the computer, so it might be more convenient for them to complete manual records after each transaction.

• It could be argued to be more reliable. With computers always prone to misbehaving, we’ve all experienced those moments where we’ve lost work by an ill-timed computer hiccup or the dreaded ‘blue screen of death’. Paper-based records might be old-fashioned, but they don’t tend to disappear in front of our eyes and it’s always useful to have a hard copy.

Disadvantages

• You only have one copy of your records, so if they were to get damaged, lost or misfiled, you will be in a pickle. Be sure to at least keep photocopies of your books if you’re a real technophobe.

• They are less easy to share. If accounts need to be pored over by several members of staff, passing a physical book around can be cumbersome. Computer-based records, on the other hand, can be emailed back and forth or saved in shared drives.

• Mistakes are likely to creep in. Even the best mathematicians sometimes forget to ‘carry the one’ when performing mental arithmetic. Computers don’t, provided that what you’ve asked them to do is correct.

While basic bookkeeping is worth understanding in any business, one way to relieve yourself of much of the accounts management burden is to look into financial outsourcing. With trained teams using a variety of tools, it’s a situation in which the pros by far outweigh the cons.