The death of the shoebox era…
A new age of accounting
Accountant stereotypes are fairly common, and over the years, I have heard many of them. Words like conservative, risk averse and slow to change are quickly spoken when asking someone what comes to mind when one hears the word accountant.
Consider though, the new age of accounting which is innovative, progressive and interactive. The last three words generally do not come to mind when you think of me or any other accountant; yet the last 18 to 24 months in accounting has seen an explosion of innovation. Gone are the days of shoeboxes full of receipts and antiquated accounting results 60 days after you turn information over to your accountant. The accounting industry has embraced the cloud and all things mobile, and the result has been innovation that the profession has not seen since the creation of excel.
Past bookkeeping models were an accumulation of paper receipts, colored coded invoice copies and stack of checks to be manually reviewed and signed. The new accounting model is digital, on-demand and interactive. How do these changes impact today’s business owner? The impact is immediately felt through real time access to data thus improving your business operations and allowing for better informed decision making, in a word – profitability. Data is available on demand and can be more efficiently accessed than ever before resulting in time savings and other efficiencies.
So what is this big change and how are you affected? Quite simply, it is virtualization. Fortunately, there is no need to buy a whole new accounting package to reap the benefits of innovative accounting technology. If you find that your company is in the market for an entirely new system, we will examine not only how those systems have changed but also the benefits of technology add-ons that you can leverage without having to make wholesale changes to your accounting platform.
First, let’s discuss wholesale changes in your accounting platform. Most new accounting platforms for private companies are being launched in a cloud based model that allows users to access data anytime, anywhere as long as they have an internet connection. These accounting systems are intuitive, easy to use, and quite frankly less expensive than their predecessor packages for a number of reasons. The first change is the delivery of accounting packages.
You can still spend over a million dollars on a customizable ERP system that you own but the new method of choice is the pay per month, per user subscription model. It’s easy on cash flow as there is not a significant upfront obligation to finance the purchase and implementation. On the flip side, you are likely making a long term commitment to go with this Software as a Service (SaaS) model. A second benefit to the user is due to the digital nature of the product; your accounting environment becomes paperless with minimal effort. The filing cabinets are electronic and this environment makes it easy to convert and store all your governance documents virtually as many packages have the ability to customize electronic data storage.
If you are not in the market for a wholesale change in your accounting platform, you can still take advantage of the innovation in accounting virtualization through the use of add-on software applications. These applications compliment, augment and integrate with your existing system and allow more functionality, particularly mobile enhancements. These applications are available for cash disbursement cycles, cash receipts and expense reporting. For example, a procure-to-pay cash disbursement application allows for invoices to be digitally received, coded one time and then electronically routed for appropriate approvals, questions and set in line to pay via ACH. There are no check stacks to be printed, placed on a desk for review and signature and stuffed in envelopes awaiting postage. Digital approvals and pre-determined ACH payment dates can help you manage cash flows, forecast potential cash crunches and see this information anytime, anywhere.
For cash receipts cycles, the applications allow you to email customer statements at predetermined intervals without any human interaction and give the customer the option to pay the balance virtually from a link in the email through ACH transfer or via credit card. Think of the benefits to your customer – no more checks for them to manually write either, decreased processing time for them and faster collection cycles for you.
The cost of the applications is generally more than offset by the savings in labor, reducing the number of individuals required to touch and route the paper, delays in investigation of information on an invoice and electronic approvals. Accounting departments are doing more with less people through the use of technology. An additional benefit is that anytime you take a manual process and automate it, your risk of error and potential fraud decreases.
If you are a business owner and have not looked at the use of technology in your accounting department, perhaps it’s time to ask the following questions: What are my people doing manually that technology is available for? Can I reduce my operating costs? Can I reduce my fraud risk? Can I make my life easier by approving invoices, making payments and collecting customer receivables from my iPad at a baseball game? Curious about what options exist for your business? Please give me a call; I would be happy to discuss this further with you.
(Editor's note: This sponsored content was provided by Anton Collins Mitchell LLP.)