Are your accounting processes staying efficient as technology opens up opportunities to perform financial management tasks in less time and with fewer people? Accounting has been a stubborn area of business in which to improve efficiency, and that’s not an entirely bad thing. However, as accounting software grows more automated and collaborative, it is possible to become more efficient in financial operations without jeopardizing integrity or compliance.
A Brief Overview of Accounting Processes
Accounting is a traditional activity that didn’t change very much from about 1400 to 1970. Then, with the introduction of the first accounting mainframes, the management of a firm’s general ledger, along with its receivables, payables, cash flow and balance sheet, became computerized. Still, most accounting processes remained essentially manual in nature. People simply replaced paper ledgers with digital ones.
The advent of the Enterprise Resource Planning (ERP) solution, which started also in the 1970s, moved accounting processes closer to actual business operations. Purchasing management, supply chain management and logistics, to name just a few areas of operations, became integrated (or potentially integrated) with financial management. Human Resources Management (HR) and compliance also began to integrate with financial management, though this has been a more recent development.
Don’t Be Afraid to Change Procedures
Staying efficient in accounting may require changing the way you do things. This is typically easier said than done, given that accounting procedures seldom change, and didn’t even change much after computerization a generation ago. Part of this is good, because established procedures help you avoid errors and fraud. However, times have changed and there are now more efficient ways to do accounting.
For example, with accounts receivable, you can automate the credit check process that occurs before you ship an order, thus reducing bad debt exposure. For payables, software enables you to streamline travel and expense report processing, as but one example. Modern accounting software also lets you change the PO process. General ledger software now enables you to capture tax information as you process source documents. On a related front, the new generation of general ledger applications makes it easy to establish a standard chart of accounts across multiple entities and business units – speeding up the process of closing the books in a given period.
Reduce Manual Processes.
New financial management solutions make it possible to cut back on manual processes. New candidates for automation include tasks like report generation, invoice production, recording transaction details, preparing taxes and more. Then, with Robotic Process Automation (RPA), you can start automating tasks that used to require a human brain to think through the accounting process.
Integrate with Other Departments.
Accounting and finance no longer work in isolation. Modern accounting software reflects this reality, giving you the ability to integrate across ERP, HR and other departmental systems. With this capability, it becomes easier to request data from other departments. Cross-department workflows, e.g. paying payroll taxes, can now be orchestrated between departmental systems.
Another benefit of modern IT is its ability to connect collaborative systems with operational systems. It is now possible, for example, to see if an employee connected to an accounting transaction is “present” and available for a chat. From the accounting solution, you can then initiate a live chat and clarify questions about the transaction, and so forth. This kind of open, easy communication leads to efficiency through collaboration.
We have worked with many companies on the process of making accounting more efficient. As us how we can help you make your financial management team more productive.