Technology Services • Published 10/24/2017 Technology Should Play a Crucial Role in Accounting Process

“That’s the way we’ve always done it” is a phrase so often uttered throughout the accounting world.  I’m sure you’ve heard it from colleagues, friends, family members, or maybe even you yourself have used this phrase as justification to resist new ideas.  Change is a mighty scary word to a lot of people and often difficult to accept in certain situations.  If it ain’t broke, don’t fix it, right?  So why is it so important in today’s world to change the way we’ve always done things, if the way we’re doing it has worked for so many years?

Technology is changing the world around us at a faster pace than most of us can keep up with.  Technological advances and the automation of tasks and processes touch every industry. The accounting industry is no exception. What we once wrote out by hand in thick green ledger books and balanced with a calculator or brain power, we now simply enter into a computer and the balancing is done for us.  See, we can embrace change!

Efficiency & Timeliness

In the fast-paced business environment of today, there are two strategic reasons to consider updating outdated and/or manual processes:  efficiency and timeliness.

In order to be timely, we must be efficient: efficient in our day-to-day tasks, efficient in our communication, and efficient in our overall process.  It is no longer acceptable to wait 15-20 days, or sometimes even months, to analyze a set of financial statements. By this time, the data is old and irrelevant, and it cannot be used to make forward-looking decisions.  And financial statements alone are no longer enough to truly evaluate your business position and operational standing. Owners, managers, and shareholders want to know what’s going on in their businesses right now, as in today, so they can plan accordingly for the future. Our processes and systems of yesterday cannot satisfy their wants and needs for this information.

Outdated Accounting Systems

Accounting systems can be your biggest asset or greatest liability when it comes to timely data and reporting.  Newer accounting systems, or newer versions of legacy systems, have capabilities built in to automate just about every accounting-related business process there is; cash management, receivables and billing, accounts payable, inventory, project costing, and so on.  With the ability to automate and interconnect each business process electronically, we can capture more data in real-time and the quality of reporting becomes more robust beyond the traditional financial statements.  If you are still operating in a system that automates the general ledger, but not the processes that lead into the ledger, it may be time to reevaluate your system. 

Outdated Accounting Processes

Investing in a new system to capture and report data in real-time is the first step towards timely financial and operational information. However, a new system alone is not enough if you do not improve the processes that surround getting the data into the system. The processes leading up to data-entry, or data-capture, must be evaluated and revamped to become more efficient. 

• Are you paperless or still pushing paper?
• Do you still fill out paper forms, such as purchase orders?
• Are you still manually coding and filing your AP invoices in file cabinets on-site?
• Are your approvals manual?
• Do you have multiple operational systems that are disconnected and require hand-keyed or manual data transfer?
• Do you find yourself buried in a hundred different Excel spreadsheets trying to make sense of your data?

If you answered yes to any of these questions, it may be time to reevaluate your business processes.

There are many reasons that people go into or start a business: they have a passion, they want freedom, they are carrying on a legacy, or they simply like the challenge of making it on their own.  No matter what your reasoning is for owning or running a business, I would venture to say that accounting and back-office administrative tasks are not on your list of the top reasons why you got into business.  So why does that become the area where we spend most of our time – pushing paper?  Wouldn’t you rather be servicing your customers and fulfilling your passion, or taking back your freedom and enjoying life to its fullest? 

Embracing and incorporating new technology into your back office processes makes your business operate more efficiently by reducing the amount of time spent on administrative tasks, offering real-time visibility into your financials, and allowing you and your staff more time to do what you are actually here to do: run your business.