We have come a long way from ‘doing the books’ using paper ledgers. Some might stick to physically writing out quotes and invoices, but technology has made the lives of many business owners much easier.
New accounting technology is constantly innovating to streamline, validate and automate the accounting process. These systems reduce the risk of human error and increase analytics for business development. At the same time, new technology enables better efficiencies for a business’s finance function.
Being comfortable and adapting to accounting technology can assist your business to thrive in a rapidly changing business environment.
What is accounting technology?
Accounting technology is computer software that fulfils previously paper-driven processes and systems and converts them into streamlined accounting workflows. These can be accessible 24/7 via cloud-based programs.
Accounting technology has further evolved to include Artificial Intelligence that can link two systems for automatic data entry. For example, a direct debit to AGL is a recurring utility bill, the AI system can identify the bank transaction and lodge the payment in your bookkeeping system with all the correct information.
Cloud-based accounting systems such as Xero and Dext are considered automated accounting programs. They can automatically pay all recurring employee wages at the same time each week, with the appropriate payslips sent out as well.
Professionals will be able to utilise the latest technologies that highlight anomalies or patterns without manual data input. Analysis of anomalies can alert users of potential fraud and prevent significant losses for a business.
The technical ability to read financial patterns and present them in a concise way gives business owners a clear view of statistics and trends to predict future cash flow.
What is Cloud-Based accounting?
Cloud-based accounting is a form of digital accounting that utilises the cloud for storing and managing accounting networks, data, applications, security and tools. Instead of the software being installed into one device, it is accessible from anywhere at any time.
This has increased the convenience for business owners to do financial transactions from their mobile devices and make real-time updates whilst on the go. Imagine updating the invoice to a client due to unforeseen expenses – quick and easy on your phone without having to remember at the end of the day.
Without hardware and software limitations, cloud-based programs allow more applications and extensions to be added as new systems are created. It also allows for multiple layers of security.
The cloud allows business owners and accountants to access data collaboratively, making it easier to exchange information and work together. Including a quick consultation if you found that piece of equipment you have always wanted, but the sale ends today. Can you afford it right now? A quick call with the accountant and look at the online system can provide you with a fast answer.
But if you are still a pen-and-paper person, there is technology to span the gap for you too. Introducing Optical Character Recognition technology – often an extension that can be added to the cloud-based platform.
What is Optical Character Recognition technology?
Optical Character Recognition (OCR) applications scan printed and handwritten documents and convert them into digital text. The integration of OCR with accounting software allows you to scan a handwritten note (or a photograph of a note) and create an electronic document, easily shareable with colleagues and clients.
Having a digital copy allows business owners to perform a simple digital search to find the information they need. They can also digitally copy or edit information as required. The best part is that OCR allows accountants and bookkeepers to cut hours of work from mundane tasks, such as itemizing receipts, organising invoices, and classifying paper clutter.
How is Technology Changing Business Finance?
From enabling online ordering to facilitating remote work (overcoming labour shortages), technology has streamlined accounting processes, improved the client experience, and provided more sophisticated analytics for accountants to tap into.
Time saved
For business owners and accountants alike, the elimination of manually searching for and entering data into the correct classification saves a copious amount of time. Having systems that can validate data without the double-entry bookkeeping system in which external auditors verify a company’s financial information saves the company from having to pay for that time.
Higher productivity
Systems have become a one-stop shop with tools and software for every financial task, such as purchase orders, expense claims, payroll, asset management, and multi-currency accounting.
Data Accuracy
Since the data is entered from the nominated source directly (invoices, bank transactions), there is no interference from a third party. It’s a complete, automated digital audit of each individual transaction.
Fast data retrieval
In accounting, AI can conduct repetitive, rudimentary tasks that could otherwise dominate an accountant’s schedule, including sorting through large swaths of data for automatic entry of client/employee information.
Quick digital searches also help when you lack time to maintain file organisation.
Secure file storage
Having cloud-based accounting programs allows for multiple layers of security, including virus protection, encryption schemes, and more. Even though collaboration, which data is to be shared is selected and managed by the business owner.
Cloud access
Having access from anywhere at any time has fostered the convenience of mobile app accounting and remote work and saves the business a great deal of time and money by not having accountants come to the office or having to transfer all financial data.
A shift to value-added work
With many rudimentary tasks covered, accountants can focus on more value-added tasks, such as analysing and interpreting the data once it’s been gathered, and building more effective, efficient recommendations for corporate growth and stability.
There is bound to be further development in the technologies used for accounting. Still, even at our current advancement, there is so much that technology is already doing to create more efficient, effective and profitable companies. And making all our lives a little bit easier.
If you want to know more about how technology can assist your business’s financial function, contact us at admin@elementsag.com.au or call 07 3878 9181.
