Say no to manual accounting processes and save money
Say no to manual accounting processes and save money
The state of technology is constantly evolving. Gone are the days when you had to manage your books of accounts and record financial transactions manually. With the latest technological advancement – Artificial Intelligence and Machine Learning, the software can manage accounting and other back-office tasks.
You save much time that can be employed towards core business aspects. It would help if you looked for ways to reduce the extra load by moving towards automated accounting software.
There is quite a lot of the population who is still reluctant to deploy automated solutions. To address specific concerns, this article briefly discusses the business aspects that are adversely impacted if you still use manual accounting processes.
Adverse business effects of the manual accounting system
Here are the ways manual accounting systems impact your business negatively.
1.Wastage of employee's time and productivity
Generally, businesses thrive in hiring people with the right skill set to do a particular job they specialize in. Managing financial accounts and bookkeeping is something that even software can take care of effectively and efficiently, eliminating the possibility of human error. You are wasting your resources by hiring an individual to do accounting manually. Instead, it would be best if you focused on hiring people to bring in their ideas that will take your business to new heights. This way, your employees will feel valued, and this will ultimately result in their increased productivity.
2. Potential fraud and data manipulation
If you follow manual accounting processes, you always fear the possibility of fraud by your internal team. Your employees are manually feeding the data, which can be manipulated easily (e.g., twisting the punch-in and punch-out time for additional employee benefits). This way, you are losing money and reducing your chances of sustainable growth. It is highly advisable to go ahead with automated accounting software to increase the efficiency of your business as a whole and eliminate the scope of manual manipulation.
3. Unreliable data
A manual record of all your financial transactions is a magnet for manipulation and errors. Moreover, the figures derived from manual accounting processes might not be mathematically accurate, resulting in inappropriate and unadvisable business decisions.
While if you take the help of an automated accounting process, the data obtained will be independent of any errors or biases, flowing automatically from the source. For any business to grow, you have to be realistic about the financial numbers. If your numbers are not accurate and reliable, you will lose your resources and reputation.
4. Mismanaged payables & receivables
If your accounting records are not updated on time, it will delay the payment clearances of your employees, suppliers, and creditors. Such a situation will hamper your goodwill and credibility in the market. Further, inaccurate accounting records also affect your receivables and ultimately add to your working capital cost.
To stay relevant in the cut-throat competitive market, it is essential to keep your employees, creditors, and suppliers happy by releasing their payments on a timely basis, managing the employee turnover ratio, credit period, connection with reputed suppliers, and keeping the working capital cost at the minimal.
5. Clumsy expense management
Manually recording your financial transactions leaves enormous room for fraud and error, which results in the loss of track of expenses and incomes, such as missing the deadlines or credit period or delayed payment of taxes.
If you seek an accounting expert’s help or move to automated accounting software, you ultimately will not have to be worried about such petty things, as you get timely reports on income-expenses and even notifications about the nearing deadlines.
6. Poor cash flow forecasting
Not having a systematic accounting process will result in a false interpretation of your business’s overall cash flow statements. Keeping track of your cash flows will help you take competitive and strategic moves in favor of your business growth without creating an additional working capital burden. You can always seek an accounting expert to assist you in such things or implement the accounting software to manage your cashflows effectively.
Conclusion
A poorly managed or manual accounting process leads to monetary and qualitative loss. Hence, to avoid such undesirable circumstances, you must leverage accounting software and applications – either implementing yourself or relying on third-party outsourcing agencies to use technology to manage your accounting and financial records efficiently.
CFO UAE is the pioneer of all your accounting, taxation, and bookkeeping needs – stop your manual processes and save your business resources.
