3 accounting technologies your business needs to thrive
The explosion in data and emerging technologies has transformed a lot of businesses.
When we hear about technology trends in finance and accounting, we think about AI or blockchain and fail to understand how as a B2B business, we can leverage this now.
However, business leaders should really evaluate how new technologies can be used strategically to achieve the company’s business objectives. (Remember, choosing the right finance stack is a business decision!)
And there are numerous things you can implement - without reinventing the wheel - to scale your business now.
3 accounting technologies your business needs to thrive
Some 82% of failed businesses in the US blame their demise on the same problem - poor financial management.
If you’re running a fast-growing business, or a VC-backed company, staying on top of your cash flow might not be a priority. However, effective cash collection is crucial to building a healthy and scalable business.
And it’s not just the loss of money from missing invoices that will cause your business to suffer. Sooner or later, your finance team will be wasting hours every day going through tons of manual accounting processes to chase up cash.
By implementing the right technologies and taking control of your cash flow now, you’re helping to secure the long-term health of your business.
If you want to empower your team and build a scaling business, then you must guarantee to keep up with these 3 accounting technology features.
1 - Cloud Accounting
Cloud accounting means you keep your business’ books online. This isn’t as common a practice as you think with just 38% of European businesses using cloud-based financial software.
Many companies still use offline systems downloaded to a hard drive and don’t realize how their choice is holding them back. Most desktop options only allow one person to access your company’s financial records at a time. You’ll also need to spend time backing up your data on a secondary hard drive or risk losing all your company’s financial data.
With cloud accounting, you can access your records anywhere in the world. It’s a secure way to store your data that won’t require backing up on your part. You’ll also have access to real-time information on your company’s finances while enjoying the latest software your cloud service has to offer.
The safest place to store your financial records
Cloud-based systems usually offer auto-save functions and save data in multiple secure and physical locations to guarantee that your records are never lost. Cloud-based systems also use encrypted connections to transfer your financial data. That means your records can’t be intercepted and read by any unauthorized users - only advisors and employees that you trust with your company’s login details can see your accounts.
According to a study, some 94% of businesses say their security improved once they stored their financial data on a cloud. And another 91% said it also became easier to meet government compliance requirements.
Improve collaboration and access
With cloud computing, you have 24/7 access to your accounts from anywhere in the world. You’re no longer tied to a physical location where your desktop program is installed. All you need is an internet connection to sign in and you can have every member of your team online at the same time.
This mobility enables better collaboration across teams. Remember, it shouldn’t only be the CPA who has access to your accounting software. Accounting information should also be accessible to leadership and business teams to help drive better business decisions.
A scalable option for your business
With most cloud services, you can scale your requirements to what you need. You pay for the type of subscription you want and the features you need, nothing more.
For example, NetSuite accounting adapts to the company size and growth based on the number of users to the subscription, and/or additional modules. NetSuite’s pricing is scalable and modular too as it will vary depending on the size of the team, and which features and integrations will be used.
Enjoy real-time insights into your financial information
Accurate and real-time finance data is crucial for CFOs and business leaders to do their job.
And it’s paramount to build a healthy and scalable business.
With a cloud system, you can have access to integrated cloud analytics to better understand data. You can also improve your finance team’s efficiency by automatically creating personalized reports without having to do it manually.
2. Open systems and connected techs
“All-in-one” closed tools offer a variety of services but are actually often mediocre at everything, instead of excelling in one or two features.
Your business can’t achieve its potential if it’s being held back by these types of closed accounting systems that won’t grow as your business does.
Allow integrations with third-party apps
When choosing your finance stack, you must put into the equation your future needs and challenges.
But, how do you know if a system that fits your business now, will meet your needs as you grow?
Sometimes you don’t know what you’ll require in the future. Choosing software that is open and compatible with a variety of third-party tools will ensure that you’ll be able to meet your needs when the time comes.
Take Quickbooks for example. It’s compatible with more than 800 third-party applications.
It’s the perfect invoicing solution when starting a business as it offers the most needed core accounting features for small businesses. Then as your business grows and you need greater functionality, you can choose from thousands of apps to install on their app store.
Don’t limit your system to the accounting team
As your business grows, you might need a system with access to more than just accounting or budgeting information. If you work for example with several subsidiaries, foreign currencies, or taxation standards, you’ll need a larger view of your business processes with real-time data.
In that case, you must then prioritize systems that are not limited to the accounting team.
With ERP software such as Netsuite, you’ll be able to integrate not just your financials under one system, but also human resource activities, manufacturing, supply chain, operations, and more. The data available to you will help you understand how the different parts of your business affect each other which in turn allows you to make more informed decisions.
3. Automated accounting technologies
What is accounting automation?
Accounting automation enables your team to skip the most manual and labor-intensive tasks by doing them automatically. It gives your team more time to focus on high-value tasks instead, it reduces errors and enables higher productivity.
Benefits of accounting automation
Automation saves you time and makes your business a more attractive place to work
The next generation of young workers has grown up with emerging technologies. This fact makes keeping up with the latest technology trends paramount to recruit top talents.
With automated accounting technologies, you can automate mundane and time-consuming bookkeeping tasks and enable your team to be more productive.
This also means for your finance team that:
- They are no longer preoccupied with low-value admin
- You empower their digital accounting skills
- You let them focus on the most important part of their role - improving the financial health of your business.
Automated accounting technologies reduce costly errors and help you manage your workflows
Human error is the leading cause of accounting mistakes. Your bookkeeper must work with thousands of numbers and often to pressurized deadlines. Some 27.5% of firms report incorrect data being manually entered into their systems while 17% say customized Excel formulas have been deleted.
Think about it - how easy is it to bill an invoice of $1900 instead of $9100? Little mistakes like this can cost you thousands of dollars.
But thanks to automation, your accounting information is updated immediately and correctly into your books which reduces the risk of costly data entry mistakes. You can also categorize all of your transactions and find important financial information in seconds.
It’s easier for your customers to pay you faster and on time
Collecting money is a sensitive activity and you might see a warning when associating “payment collection” to “automation”.
But automating your receivables processes won’t mean you’ll remove the human element from the equation. On the contrary, by automating the most recurring tasks, you’ll be able to spend more time on sensitive or larger accounts and add a “human” dimension when needed.
Automating internal collection processes and customizing reminders at a customer level will help you maintain better customer relationships while boosting your finance team’s productivity.
Automated accounting technologies can also make it easier for your customers to pay. You can offer automated direct debit payments, one-off credit card transactions, or even wire transfers.
A business that is labor-intensive or wasting time on low-value tasks isn’t scalable. But with these accounting technologies, taking on more customers or staff is now as easy as buying a few add-ons. You’re not wasting money on capacity you don’t need and your company’s growth won’t be stunted because you don’t have the tools they need.
The best talents want to work for a flexible business where mundane tasks are automated, freeing up time to improve the financial health of your company. That’s how accounting technologies make your team happier and help your business thrive.