Stop doing bookkeeping

At a certain point, a bookkeeper is necessary, but what I want to challenge is the point at which you get one involved. My thinking is it’s a lot further down the line than you might think. Usually, it’s a pretty good deal. You’ll pay around £15 an hour for someone to take all that nasty receipt entering off your hands. Bonus.

But what if you never had that nasty receipt entering to begin with?

What if you could do your entire week’s worth of bookkeeping in 20 minutes on your phone while sitting on the train? Coming back to the original point of this blog about having systems do the work for you, Xero has done exactly that.

Here’s how the magic happens

You connect your Online Banking to Xero, and it pulls in your entire statement then starts automatically matching income with invoices you’ve raised, outgoings with regular expenses you’ve told it about before and simply asks the question “What’s this?” a handful of times for the transactions it doesn’t recognise.

Over time it will learn your spending habits to the point where after just 4 months, our entire month’s bookkeeping was taking 15-20 minutes. Because they also have a great iPhone and Android app, you can actually do your bank reconciliation wherever you like.

This is true innovation

For this reason, I would suggest you’d need thousands and thousands of records per month (most of which would be automatically detected) before even thinking about getting a bookkeeper involved. The idea of Business Automation really stems down to the core principle of using technology to its fullest extent, pushing it to the absolute limit and only using people where technology can’t do the job.

Automating your finances might seem daunting, but it doesn’t have to be. The trick is to strike the perfect balance between automating in small chunks, and creating an ROI as quick as possible.