It has transformed accountancy, bringing in several benefits for businesses
The accounting software market is expected to grow at an expansion rate of 8.6 per cent per year starting from 2018 and will likely have a global value of $11.8 billion by 2026, according to new market research by Accounting Today. The new-age accounting software is increasingly being leveraged by accounting firms to automate time-consuming and repetitive tasks as well as redefine existing business processes. They are switching from conventional accounting software to emerging technology innovations.
Talking about micro, small, and medium enterprises, they play a significant role in building a nation's economy. Therefore, it is important to restructure them where digital transformation can play a defining role. As digital accounting has remarkably changed accountancy and brought in various benefits for businesses performing accounting operations, it is more important than ever for businesses to adopt digital accounting. It will make their accounting functions more efficient by planning strategically, organising, and adequately channelising their financial processes.
The Age of Digital Solutions
Technology is transforming not only the core operational areas of organisations such as the value-added supply chain but also the central functions including human resources, finance, and purchasing. Moreover, disruption is also being seen in systems and processes in accounting at a rapid pace. The major advancements brought by technology are e-business, Enterprise Resource Planning (ERP), and cloud computing. Further, the digital tools are helping CAs carry out their tasks effortlessly, accurately, and in minimum time. Some of these tasks are bulk replication of vouchers, bulk creation of vouchers, complete GST overview, voucher auditing, finding minimum/maximum cash balance in a year, amount-wise sorting of vouchers, and much more. These tasks are made easy by various digital solutions such as management of data quality, paperless accounting, creation of transparency, real-time reporting, uniformity of systems, big data analysis, cloud computing, etc.
Here’s why an organisation must adopt accounting tools:
Time and Cost Savings
Digital accounting is both times as well as money-saving. It not only makes accounting processes much faster, including statements, reporting, invoicing, and budgeting but also, eliminates the need to hire a bookkeeper for checking the books’ accuracy. Further, as most of the data can be automatically recorded by the accounting tool, it leaves no room for error. Another way digital accounting can reduce your operational costs is by keeping a check on payables and receivables, so an organisation knows where its money is being spent.
Easy Access to Financial Reports
Accounting tools allow the financial management team to create financial reports within minutes. These reports include cash flow statements, profit and loss reports, and balance sheets. The best part is that most of these tools don’t require one to have extensive training to use them. So, one can generate the reports without depending on any financial expert.
Strengthen Data Security
As cyberattacks continue to rise in number, it is important to prioritise data safety. The new-age accounting software is protected by extra security layers, such as authorized access, two-factor authentication, and regular backup. Many companies provide additional security measures such as encryption, protection from phishing attacks via firewalls, data storage in multiple data centres, etc.
Advantages of E-invoicing
E-invoicing is capable of feeding data directly into a business account payable system without any scope for error. This makes a business more productive and efficient as one doesn't need time to invest time in correcting human errors. Also, e-invoicing helps organisations to process invoices faster which results in timely payments, thus, improving the relationship with the suppliers.
It can help organise the accounting books of organisations, saving time and effort that goes into keeping financial records in order. With accounting software, organisations can save invoice templates, details of their customers, and product information all in one place.
Many a time, within the financial ecosystem and large auditing firms, there have been discussions about how digitalisation in accounting systems will affect the profession of the accountant in long term. Well, their role will become more vast, significant, and crucial for an enterprise's financial planning. Technological advancements in digital accounting are expected to fulfil an overwhelming pressure for “data on demand” as well as easily accessible and retrievable data.
The digitised accounting is making it convenient and easier for businesses to serve their customers more proactively and effectively manage their operations. Adopting these technologies is important for extracting timely financial insights as well as staying ahead of the competition. Also, in a post-pandemic world, businesses will have to embrace digitisation to survive and overcome adversaries.
The author is Co-founder, BUSY Accounting Software
DISCLAIMER: Views expressed are the author’s own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.