The Effect of Modernizing Your Finances on your Bottom Line
Running an accounting firm successfully is something not everyone can do with ease. Especially, when it’s about modernizing your available finance operations, it may seem quite an overwhelming task for many.
There are a number of benefits of making improvements to your company’s accounting system and these include saving considerable time and money, besides boosting your bottom line.
In this blog post, we will do a deep analysis of the same.
Initially, Step Up Your Existing Accounting Software
A majority of the small-to-midsized companies headquarter their accounting systems initially in Excel or with basic accounting software that they had purchased at a previous stage of their business. Nonetheless, with businesses growth, finance needs grow as well.
Doing things in the way they have always been done is generally the easiest path for anyone. However, deploying an outdated accounting system poses several costly risks like –
- Lost Time – The frustrating inefficiency of outdated systems may become your biggest concern. If you are still making use of spreadsheets, the dozens of hours your employees would take to input financial data completely in order to maintain that information.
- Security Breaches – If you use some outdated desktop accounting software, you are more prone to potential security breaches. It has been estimated that security breaches cost businesses $38,000 on an average in recovery efforts.
- Potential Errors – Studies have shown that almost 90 percent Excel spreadsheets have mistakes.
- Competitive Disadvantages – Your old software may be having limited capabilities compared to the newer versions that are being used by your industry competitors.
Taking the Modern Move
By taking optimum advantage of technology, your accounting business will reap following benefits –
- A streamlined system that helps in saving your valuable time – All your financials will get linked to all your bank accounts which can be easily integrated with several other accounting tasks like invoicing, inventory, or payroll.
- Aggregated financials in a single, easy-to-access place – There will be no need for your staff to waste time in pulling up information from different, disparate programs & files.
- Industry-specific insights – Quite easily, you will be able to find several industry-specific, in-use accounting software programs like the ones geared towards construction or nonprofits.
Making a Move to Cloud
As you look for options to upgrading your existing accounting system, you can consider the several advantages of modern, trending Cloud-based accounting software .
Consider QuickBooks hosting for example. Hosted QuickBooks allows simple & secure access by means of web browser or your mobile phone. This eliminates the excessive burden of systematically installing, hosting, and finally maintaining the accounting software on your own.
Quite possibly, you may be further postponing migration to Cloud because of the supposed involved expense of buying new software. However, desktop & server-based systems include their hidden costs of their own, including:
- Fixed IT Costs – Depending on the accounting software you use, you may spend money on staff/contractors to effectively maintain servers. It would also include regularly updating your hardware & software.
- Lost Records – Do any potential computer/server glitches keep you troubled? Definitely, outdated desktop & server-based software bring this as a bigger risk.
- Staff Time – Constantly backing up records besides running software updates may take several hours each month.
Taking the Modern Move…
While around 33 percent small businesses have migrated their accounting software to cloud, there are several others that could benefit more by making such transition. Consider the following advantages in this regard –
- Cost savings -Most of the cloud-based accounting software are available via subscription and additionally come with technical support. Nearly eighty-eight percent businesses that make a move to cloud report significant cost savings.
Even 56 percent accounting businesses report that cloud services have boosted their profits.
- Real-time Information Access – Your data is accessible immediately and you can easily link it to your bank account, payroll, expenses, and even invoicing.
- Mobile Access – Cloud computing has been designed for mobile access and that means that you can access all your company financials using any device while being anywhere.
- Automatic upgrades – The ideal software vendors push new updates automatically to their customers. This means that your accounting software will not get outdated ever.
Streamline Your Expense Process
Typically, a traditional expense process may involve several people and moving parts. When you simplify the process for your employees and involve lesser workforce in approvals then it can have a major positive impact.
With time, as your company grows and matures, this traditional process decreases visibility & absolute control of your current cash flow besides creating several inefficiencies. Following are the hidden costs involved –
- Thousands of Dollars Annually – As per survey reports, an expense report costs nearly $29 at an average to process.
- High Interest Rates – By providing credit cards to your employees, you are more likely to pay 16 percent interest rate on an average on balances.
- Employees Pay – In case employees lose their receipts or simply forget to turn in expense report, they need to pay for the expenses they make.
Making the Modern Move
You need to look for a solution that helps you track your company’s expenses precisely in real time. In this manner, businesses can track that specific spending or can even immediately approve and deny expenses using any device of their choice. Following are the benefits –
Time saved – Almost 75 percent small businesses reportedly say that any time that has been spent on expense reports does prevent them from focusing on more crucial activities. Organizations using prepaid card solution nearly saved 12 hours of total staff time every month on processing various expense reports.
Increased security – Almost 47 percent businesses making use of prepaid cards reported a considerable decrease in fraudulent expenses.
Finally, it must be mentioned here that as your company grows, your finance technology requirements need to evolve as well.
Furthermore, as Cloud technology excels and becomes more cost-efficient and simpler to implement, adopting these modern moves definitely will keep your firm productive and ahead of the competition.
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