Accounting is an integral part of any business. It is a systematic approach of classifying and reporting the financial transactions of a business. It helps you to evaluate the financial state of the business and manage the fund properly. Not just for internal use, but a systematic accounting practice can be valuable for investors, creditors, and lenders to make investment decisions.
If your business is not following the standard accounting process, it can lead to a crisis. The risk of mismanagement of funds can poorly impact the growth of the organization. In order to avoid such circumstances, you have to ensure that your accounting team is following the best accounting practices and optimizes them on a regular basis. However, the traditional accounting system is a complex process, and your team can face some common challenges associated with it.
The ideal way to tackle these challenges is to equip your accounting team with the best accounting software.
Challenges Faced by the Accounting professionals With Traditional Accounting Process
- Maintaining workflow: Accounting professionals have myriads of activities such as reviewing accounting documents, maintaining accounts transactions, billing, invoicing, finance control, meeting compliance requirements, filing tax forms, and much more. Professionals who deal with such work tasks without having a standardized workflow often commit errors and end up spending more time resolving the issues.
- Time-consuming and costly: There are many repetitive tasks involved in the accounting process, and the amount of labor and hours invested in the repetitive tasks can add extra cost to the company. Manual maintenance of the accounts often consumes more time.
- Data theft: Security is a matter of concern for the accounting department as they hold a wealth of information about the client, and they are more prone to cyber-attacks. Accessing and securing this information is crucial for accountants.
- Meeting deadlines: Accountants have to deal with various deadlines such as tax filing deadlines, financial report deadlines, etc. It is difficult for an accountant to keep track of all these deadlines, and without an organized accounting process, the risk of missing those deadlines always remains high.
- Lost documents: The accounting process involves the maintenance of a lot of documents, and if your accounting team misplaces these documents, the consequence is severe. Your accounting team has to make adjustments in journal entries, and it can bring unnecessary revenue loss to your company.
- High-error rates: In the accounting process, accuracy and consistency are important constituents. Any small error can be devastating for a company, and the worst thing about accounting errors is that you can only figure them out at the end of the process.
- Meeting compliance: Accounting team often has to stay vigilant on the regulatory changes or any new amendments in the accounting law. Companies can attract hefty fines if they fail to meet the compliance or regulatory changes.
So, the best way to optimize your accounting practice is to leave behind the traditional, manual, or simple excel-sheet practices, and invest in the best accounting softwarethat is packed with functional features for your type and size of business.
How Can Accounting Software Optimize Your Accounting Practice?
- Real-time team collaboration: Digitized and automated Accounting software enables companies to collaborate in real-time with team members, advisors, clients, etc., and access the financial data from anywhere in the world. It enhances organizations’ ability to make critical business decisions and reduces the risks associated with it. It is impossible for errors to go unnoticed when all the team members are on one page and have access to real-time data.
- Operate everything from one place: The accounting process is a time-consuming process and involves many activities right from collecting invoices to managing contacts and recording business transactions. However, with accounting software, this process becomes simple and fast. It provides a holistic approach for all accounting-related activities. It helps the accounts team to manage client information, accept payments, prepare tax quotes, track projects, claim expenses, mitigate reconciling issues, calculate tax as per the laws, etc. all from one place.
- Reduce time for bank reconciliation: You can even sync your bank account directly to the accounting software, and all your transaction details can be fed to the system. Since there are no manual uploads, one can save time and focus well on the work front
- Customization: Different companies have different requirements and based on their business size, project scope, and client’s expectations they prefer customizing their accounting process. Automated Accounting software allows easy customization of the workflow rules, approvals, data analytic reports, designing (adding a company logo to the invoice), etc. as per the business requirements.
- Automation: As perGartner, the finance department can save their team from 25,000 hours of avoidable rework caused by human errors by deploying robotic process automation. Accounting software allows you to automate a range of activities from basic invoicing and billing processes to complex tax calculations. To make your finance department even more productive, you can also usefinancial planning tools.
- Meeting accounting standards and compliance: Accounting software solutions have an inbuilt feature to send alerts to administration; if there are any updates in the regulatory standards, it notifies the responsible person.
- Integrates with other departments: The accounting department has to communicate with other departments such as warehouse, ERP, human resource, sales and production, supply chain, etc., to collect various documents required for the accounting process. Accounting software integrates with all these areas and collects all the information or documents directly from their system. It makes the accounting process faster and efficient.
Accounting processes are aimed to provide a fair and clear view of your business performance. However, the traditional method of accounting is prone to human errors and is time-consuming. If you are still relying on the manual method of accounting, it is time to invest and optimize your accounting practice with reliable accounting software.