Paperless accounting – dream or soon your reality?
If you want to make a company more efficient, you should first ask yourself where the shoe pinches the most and at the same time the greatest impact can be achieved with the least effort. In other words, where the cost/benefit ratio is disproportionately high. Since nowadays 90% of all invoices are supposedly still processed manually, there is still great potential to optimize these processes. And that with relatively low costs.
With the help of modern technology, highly repetitive parts of accounting can be automated to a large extent. In this way, increases in efficiency and productivity can be achieved, leading to cost reductions and allowing more time for more value-added work.
Now one might think that employees are afraid of automation because they might lose their jobs. But this is not really the case, as a survey of American employees shows that over 32% of the working population would want to be freed from repetitive administrative tasks if they had the chance to change their working conditions. In addition, over 70% of respondents would like to see automated data entry.
What the reasons are for paperless accounting and what steps need to be taken to achieve this, I will try to explain below.
Manual data entry is tedious and error-prone
As the survey confirms, very few respondents are “fans” of manual data entry. This is not surprising, isn’t it?! No matter how good the working atmosphere may be, sooner or later the monotony of entering data from paper invoices or copy-pasting from digitized documents will bore and tire most people.
With such repetitive, monotonous work, errors can of course quickly creep in. For example, if a zero or a comma is forgotten, the consequences can quickly be devastating. For example, a simple typing error can cause high costs in worst-case scenarios.
Mizuho Securities Co, a department of the second largest national bank in Japan, tried to sell shares on the Tokyo stock exchange, for example. Instead of offering individual shares for 610,000 Yen per share, a typo led to the sale of 610,000 shares for 1 Yen per share. In less than a day, the company lost nearly $340 million. This has little to do with the document capture itself, but you can understand my point about the costly consequence.
Manual data entry is time consuming and costly
The manual typing of data is not only tedious but also extremely time-consuming.
According to a Centriworks article, the average accountant spends 49% of his or her time processing transactions. This means that almost half of the day is spent just filling out forms and processing invoices, etc. In the survey quoted earlier, 63% of employees said that repetitive tasks deprive them of the opportunity to do their best work. After all, they would like to do more significant work if they only had the time. You see, there is clearly wasted potential here.
For a small business with two accounting staff, Centriworks estimates that the cost of doing this is $150,000. If we consider the 49% the costs of $77,000 are spent on manual transaction processing only.
It is easy to see that manual data entry is not a viable solution from a financial point of view either.
What can be automated?
In accounting, intelligent document extraction can recognize documents such as orders, delivery bills, invoices and credit notes and read out the relevant information contained therein. This significantly saves manual work and enables the automation of further processes such as order and invoice reconciliation and even complete postings.
A very good example of an accounting solution that has integrated this functionality as standard is that of Accounto. Companies or even fiduciaries can simply send their receipts to Accounto, where they are digitized and the relevant data is extracted. In addition to this fundamental possibility for automated processing of receipts, the Accounto software offers companies and fiduciaries numerous other functionalities that allow a closer, smoother and more effective cooperation, thus creating significant added value for both parties.
First steps to paperless accounting
parashift.io/scanning-done-right-settings-for-better-results/If you want to digitize your accounting processes, you should take some precautions (the aspects mentioned here are not exhaustive). On the one hand, all documents that previously had to be entered manually should be digitized as soon as they are received. I have already explained here why this is recommended as a process design. To minimize errors, there are also certain minimum requirements for scanning processes, which you can consult in this article.
At the same time, we recommend that you contact the Accounto team. You can do this here via this link, where you can request a live demo within a few clicks and convince yourself of the potential of this solution.