Why embrace digital record keeping when preparing accounts

The digital economy might have dominated the world, but by no means have all businesses subscribed to it. Even today, many companies rely heavily on paper-based processes, while their digital component consists mainly of Excel sheets with rows upon rows of data. 

In accounting, paper-based practices can lead to serious errors that can raise questions during audits and lead to heavy fines. And luckily, several easy-to-use accounting software options make the transition easy. 

So, what exactly does accounting software do? Essentially, it streamlines the accounting process and eliminates paper trails by capturing data and documents at the point of origin for storage and analysis. Some of its functions include:

  • Scanning documents 
  • Capturing information through digital forms 
  • Creating a relationship among relevant documents in a business database for easy access 
  • Workflow functionality to create audit trails and automate authentication requirements

What are the benefits of using accounting software for your records?

If your business likes to handle its accounts rather than hire an accountant, it is understandable that you would want to keep things simple.

And at first glance, learning how to use a whole new software might seem like too much work – not to mention the expense of buying the software. 

Of course, you can make your life easier by hiring professional accountancy help, but the truth is, the benefits you will get from that one-time investment will pay you back many times over. Let us look in more detail at some of them:

1. Time-saving

When you have a physical record-keeping system, you need to spend considerable time sorting through papers, invoices, credit notes and so on, organising them in the correct folders and retrieving them when necessary. Not only that – physical documents can get lost or damaged, and then you have the headache of trying to remember what they contained.

With a digital records system, you can access anything you need with a few clicks, reconcile accounts without digging through piles of receipts, check when invoices were paid and those that are outstanding, and never have to ‘lose’ anything again. That is the beauty of going “digital.”

2. Space saving

It might seem like a few invoices and bills at first, but pretty soon, you will have piles of folders around the office. And you cannot just junk last year’s accounts either – the government may need you to keep your financial records for up to six years or sometimes longer.

Transfer everything to a software repository instead, and use the space for things that improve your productivity – like a coffee machine.

3. Data integration

Accounting software does not just capture your records. It also integrates your accounting information with existing business systems and records, like your CMS and gives you much greater visibility. This allows you to link specific transactions with specific clients and departments and thus act as needed. 

For instance, if you find that one vendor is costing you an excessively high retainer and incidental fees, you might choose not to work with that vendor.

And if one client is repeatedly buying a fixed quantity of goods at intervals, you could choose to offer them a special subscription-type rate. Having real-time data at your fingertips allows you to run a more efficient business.

4. Higher security

You do not need us to tell you how important it is to keep your business data secure. And that is why storing everything on a secure online system makes so much sense.

No more worrying about spills on important folders or fires or floods destroying things – everything’s stored digitally and can be retrieved from everywhere. Plus, accounting software comes with top-grade encryption and firewalls, so malicious parties cannot access the data.

5. Greater accuracy

Ever discovered a mistake in your books of accounts and had to rifle through six months’ worth of receipts to identify the problem? With accounting software, errors of transcription or omission become a thing of the past because the software knows how to capture data in its entirety, no matter how complex it is.

Some of the newer ones even know how to capture handwriting, so that scribbled invoices can be counted too. Another benefit here is that you have an in-built audit trail for review by auditors as necessary.

6. Cost saving

When you save time by using accounting software, you get to devote it to core business activities like finding clients, expanding your services and completing projects. There is also the benefit of not needing to hire anyone to sort through the paperwork and of not having to keep shelling out money for printouts.

7. Smarter decisions

As we mentioned earlier, accounting software serves as your single source of truth. You can access all your documents and data columns with a few clicks, see their relation to one another and even compare by categories such as client or date completed.

What is more, you can do this every day in real-time. With this information at your fingertips, you can make intelligent and timely decisions about things like optimising your inventory, whether or not to buy an asset or whether you need to take a loan for better cash flow. This enables your business to avoid crises, and you can continuously improve and stick to its goals.

8. Better customer experience

Serving your customers well is the top priority, as you know, and having their data readily available is key to that. If you are talking over the phone, for instance, and you pull up their past purchase records and offer tailored purchase advice based on those, you will impress them much more than if you keep asking them to hold while you search through paper files.

As the saying goes, time is money – and the less time you take up with your customers, the more likely they will trust you with their money.

Over to you

Digital is the future, and companies that embrace it now will reap the benefits in the years to come. Most of your clients either have already or will soon move to digital processes and expect you to do the same.

And the best part is that all the top accounting software are easy to integrate with your current business systems and easy to pick up, so even if you are just starting, you will soon catch up. If you need help transitioning to digital record-keeping, you can always count on our experts at Golding. Please contact us by filling out the form. Catch up soon!