With the developments in information technology, digital accounting has become indispensable in today’s businesses. In the past decade, digital bookkeeping and other accounting solutions have gained popularity among firms for its efficiency, cost-effectiveness, and accuracy.
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Why Shift to Digital Accounting
Humans can get tired, confused, distracted, and commit errors that can prove costly at times. Statistics show that rework accounts for 30–40% of project costs across all industries. This problem can be addressed by opting for cloud-based accounting and automation software, which virtually eliminate inaccuracy.
How Digital Accounting Can Benefit Your Business
In countries such as the UK, maintaining digital accounting records has become compulsory for businesses. While such decisions can be regarded as a move towards reducing red tape and increasing business efficiency, some groups are still reluctant to adapt accounting automation in their businesses and firms. Here are three reasons why your firm should transition to digital accounting systems:
Manual record-keeping, preparing management reports, and other basic accounting functions can be time-consuming when not automated. By going digital, you can reduce your staff’s repetitive administrative and basic tasks, which can massively boost their productivity.
Real-Time Reporting and Data Accuracy
Working with up-to-date information is highly valuable to any financial manager. When you gain access to real-time reports and financial data, you are empowered to make informed and better business decisions.
Financial and Accounting Information Security
By moving your data to a digital accounting system, you can better protect the sensitive financial information of your clients and your business. Data integrity and information security will no longer be a challenge, as such software commonly employ cloud technology to store your data.
How to Shift Into Digital Accounting
With the given advantages digital accounting offers, professional services firms, and business owners are now in the process of transitioning from paper to digital platform. But how do you make the shift?
Choosing a Software
The first step towards a digitized work environment is selecting the right software for your operations. It is essential to know the ins and outs of your processes so you can get the software that best fits your needs.
Various online software offers solutions depending on the business requirement. Choose the program which can help you onboard easily and scales with the business over time.
One of the best assets to look for in your software is its third-party integrations. As these plug-ins come in different functions, you can process your numbers in a more seamless manner.
Aside from the integrations, a cloud-based system is the best factor to consider. Its cost-effectiveness and scalability allow the software to grow along with you as your business takes the high road.
Transferring Data to the Cloud
Part of the accounting digital practice is creating a paperless environment. Accounting firms consume huge piles of paper in their everyday transactions which adds up to the clutter of the office space. Once the documents are uploaded into the cloud, you get the guarantee that your files are secured and safe from any breach.
Transferring your numbers online also makes collaboration easy. Update your data in real-time and accurately without the hustle of sending sheets from one device to another.
Upgrade Policies and Practices
Upon putting confidential data of your clients into the cloud, you already have indispensable safety around the numbers. However, upgrading security measures decreases the firm’s vulnerability towards risks of cybersecurity and data breach. Digital information is crucial for all transactions with clients, that’s why best practices and policies are best imposed to further push the confidentiality of your numbers.
Prepare Your Team
To successfully transition to digital accounting, however, explaining the abovementioned reasons to your team may not be enough. As with any change, it is crucial that your staff is well-trained and prepared to handle the new technology. More importantly, each team member should keep a positive attitude. Always challenge your team to find solutions or other cost-saving strategies that will help drive the business forward.
First published on 2 May 2017; Updated on 10 March 2020