Recently I was having a discussion with a CPA, and we were discussing the options available for SMB businesses in the USA to do their bookkeeping. While speaking, I realized that there are so many options out there that it is confusing for business owners.
After some thinking, I realized that the SMB businesses have 3 options with regard to their bookkeeping:
- Do the bookkeeping themselves
- Use a 3rd party platform to do the bookkeeping
- Outsource the bookkeeping to a Bookkeeper or Accountant
I thought it would be interesting to understand the landscape currently available for these options. And of course to understand where DOKKA fits with each of these options.
Obviously, it’s not clear cut, and for each option, there are many “shades of grey”. An example will be a business that does the bookkeeping internally, but gets a bookkeeper to check their bookkeeping. Or that one of the platforms for doing bookkeeping might be passing some of the work to a bookkeeper or accountant in the background.
Businesses that do the bookkeeping themselves
Cloud accounting has come a long way in the last few years. In America, for SMB’s, Intuit’s Quickbooks product has become the de-facto standard, even though competitors such as Xero and AccountingSuite are marketing themselves aggressively to try take market share.
Businesses are converting in mass from Quickbooks Desktop to the cloud option, Quickbooks Online (QBO).
Quickbooks marketing makes it out that doing the bookkeeping yourself has become a “piece of cake” and they even have an option, Quickbooks Live, that lets you speak to a bookkeeper or accountant if you need some advice – ie: you’re not sure where to categorise a particular transaction.
So many businesses without financial expertise internally are taking on the bookkeeping themselves using Quickbooks.
The challenge is that non financial small business owners are not experts in bookkeeping and accounting, and so mistakes happen, and often the bookkeeping process takes far longer than it should.
For this type of small business owner doing the books internally themselves, DOKKA probably isn’t the right solution.
For businesses that have internal finance people doing the bookkeeping, DOKKA might be a better fit. If there is a large amount of documentation, especially complex documentation, and if the financial people need to communicate with one another, and with the non-financial staff on the documentation, then the automatic bookkeeping entry creation in DOKKA and the collaboration software, will save time on the process.
Businesses that use 3rd party platforms to do the bookkeeping
In recent years, many startups such as Bench, ScaleFactor, Xendoo and BotKeeper have offered businesses a solution where their bookkeeping is doing automatically using technology, with Artificial Intelligence Bookkeeping being mentioned on a regular basis.
Artificial Intelligence Bookkeeping being mentioned on a regular basis
The startup’s are aiming at different segments of the market, all the way to a small business through to a medium size one.
This is confusing segment of the market, as some of these startup’s:
- are using technology to do some of the work but outsourcing some / most / all the work through to bookkeepers in either America or more often in countries such as India and the Philippines which pay lower salaries than to Bookkeepers and Accountants in America (so basically they are providing a similar service to outsourced bookkeepers that are using outsourced centers for the data processing outside of America)
- are connecting a business with a bookkeeper, and providing their platform to make sure the relationship with the bookkeeper is good, and the quality of work is consistently high, and there is continuity if the bookkeeper stops working. (so basically a similar service to working with a highly regarded Accounting / Bookkeeping company with many high quality bookkeepers)
- only use technology to automate the process for the business, but once again, if the business owner doesn’t have the necessary expertise or time, then the process will very likely be frustrating for them.
DOKKA is currently not integrated with any of these 3rd party bookkeeping platforms, but we’ve had discussions with many of them on providing our API to them, so they can streamline the bookkeeping process further.
If you are using one of them, and would like to use DOKKA as well, then please get in touch with either your account / relationship manager and ask them to discuss with us, or reach out to us, so we can discuss whether DOKKA will be suitable for you to use in conjunction with your chosen 3rd party bookkeeping platform.
Outsource the bookkeeping to a bookkeeper or accountant
Most small business owners still prefer to outsource the bookkeeping process to a bookkeeper or accountant.
Finding the right bookkeeper will mean that you have a trusted advisor who will not only process your books for you timeously giving you the financial information you need to make business decisions, but also will likely be able to offer you other value-add.
DOKKA works with a large number of Bookkeeping, Accounting & outsourced CFO companies throughout the USA.
The DOKKA platform provides value to both the bookkeeper and the businesses, providing document collection, smart document management (tagging, virtual folders, google-style search and more), A.I. powered drag-and-drop complex automated bookkeeping entry creation, and collaboration to both sides.
In the old days, bookkeepers would collect the documentation from their client (Who remembers the paper shoebox), and then go back and forward with queries. Also, the documents were stored in files. DOKKA has streamlined every part of this process to save time for all parties involved.
So which bookkeeping option should you, the SME business, choose?
Each business is different, so look at the different options, speak to the different parties, and find one that makes sense for you.
With each option, DOKKA can provide value to you, and if you’re using an outsourced bookkeeper or accountant, to them as well.
Keep in mind that its essential to be on top of the numbers in your business.
Best of success finding the right bookkeeping solution.