The driving force behind this technological push is the demand from the consumers for timely and accurate financial data along with the ability to analyze and understand this data so that we can know our businesses better. We can also significantly reduce the processing time as well as the paperwork involved.
Businesses through management reporting can attain the ability to analyze the business as well as increase efficiency. This will be explained below:
Using accounting software to send an invoice directly to an email address has many benefits that include:
- Significant reduction in delay in delivery as well as removal of postage or headed paper cost.
- Surety of delivery.
- Quicker payment process as customers can use links in the email to pay with a debit/credit card or through other mediums.
- Accounts receivable become real time as bank reconciliation is up to date, we can send financial statements with a single click.
- Better access as we can use any gadget like a laptop, mobile phone to access the invoices.
- Reduction in wastage of resources as we have a stock managing system.
- Efficiency is increased as the project management/time management system is linked with the invoicing
Using technology allows us to take photos or bulk-scan paper invoices and read the data on it. It means that we can manage all the information such as supplier details, invoice numbers and expense details without manually entering it. The advantages of this system include:
- In organizations that have a huge number of suppliers, it can result in material time-saving.
- Better storage- as invoices are stored electronically, it will be saved and available for 6 years on the cloud.
- Easy and quick access- we can access any invoice from a supplier with the help of cloud-based computing.
- The chances of error are significantly reduced as there is manual keying in of data.
Bank reconciliation/ transactions:
With the advent of cloud-based accounting, a bank can automatically feed our banking transaction history to our software. This will automatically read the data and matches the transaction. The sole job of the accounts department would be to verify all the transactions. The main benefits of this include:
- Reduction in data entry time.
- Errors that occur during keying can be eliminated.
- All the creditors/debtors can keep a real-time check.
- Real-time management of accounts.
- The financial position of the organization can be given in a clearer and better view.
How to carry out this change:
To carry out the process of this change effectively, we need to buy in from the senior management especially the finance director/controller. We need to create an environment that can adapt to the change. The change here would indicate the movement from a heavy data input driven function to a one driven by cleaner technology. Whenever we choose our core accounting package, we must keep in mind:
- How easily we can transfer the data from the existing software.
- Research about the large add-on marketplace for other software that may work with our accounting.
- How much support is being provided to us by the software providers as most software providers conduct training on how to use their software.
It is recommended to carry out this move at the end of a financial year as the software would then have the complete data of the current year. But it’s not necessary as many organizations have done it in the middle of a financial year and have worked it out.