Having full control of your finances keeps you from over- and under-spending. Many business owners run a tight ship, but not all have a complete understanding of their financial health. In many cases, business owners rely mostly on internal and external experts for financial reports, expense projections, budget cuts, and payroll management.
Having a customized accounting system can save your company not just money, but time and resources as well. Apart from reduced overheads in human resources, it can also increase productivity and ensure financial reports are submitted on time.
You can always argue that expanding your human resources can keep operations running smoothly. As companies grow, relying on a conventional accounting system is not enough. Over the long term, going digital can help you remotely handle payroll management system, and this route is more economical than getting more hands on deck.
Here are a few more ways of how going digital can make your life easier.
First off, a computerized accounting system will make data entry, storage, and access faster and easier. Authorized users can run the software on any computer, and generate reports based on current needs.
Data retrieval for specific reports is also faster with just a few clicks instead of searching for printouts in dusty filing cabinets. For companies with a large volume of daily business transactions that require multiple users, having a customized accounting system in place is more practical than doing it the old fashion way.
The system’s installation costs and maintenance are often the cons of having a customized accounting system. It is a huge expense, but the returns will make up for the first few months spent on software and hardware training.
Moreover, the software’s security features ensure that data is highly protected and retrievable in case of an unexpected system error.
Manual data entry is prone to human error. Small and recurring errors can be both costly and damaging to companies in terms of over- and under-spending and tax penalties. Having a computerized accounting system will minimize the possibility of human errors and lower the risk of inaccurate reporting.
Consequences from incorrect data can spell nightmares for both individuals and companies. Small business owners can face legal and ethical charges for false reports and even a terrible blow to company’s image. This could also affect the stakeholders and dampen the brand’s chances for survival and success.
In a 2014 research from the Experian Data Quality, findings showed that data inaccuracies affect the outcome of 88 percent of companies. An organization can lose an average of 12 percent of its revenue because of inaccurate reporting. This could result in lost revenue and jeopardized partnerships and deals, and not to mention disappointed customers.
Minimized Risks for Deceit
In old fashioned bookkeeping, if your accountant is messing up your books little by little, you’re screwed. A confrontation could result in a legal battle that can go on for years, or worse, can result in theft, especially if the same person is the one writing company checks and disbursing the cash in payroll management.
Having a customized accounting system can minimize these risks by creating a multi-user system. Separating the data entry from the cash distribution can lower the risks of falsified bookkeeping. Circulating the individual responsibilities among the team members can also reduce the risk. Tracing the cause of inaccurate data is also made easier, which decreases the possibility of finger-pointing and blame-throwing.
There are many advantages of having a computerized and customized accounting system in place. Even if the old system works for you, going digital ensures that your accounting system can keep up with the company’s growth. The installation and maintenance can be expensive, but the consequences of inaccurate and late financial reporting will cost you even more.
About the Author
Julia Carol Esguerra is a Business Consultant at Bridge Southeast Asia, a business development and client support platform for Technology in Southeast Asia, based in Manila. Offering cloud-based solutions for Human Resources, Sales, and IT.
Photo: “Numbers And Finance” (CC BY 2.0) by reynermedia