Technology Should Play a Crucial Role in the Accounting Process

“That’s the way we’ve always done it” is a phrase often uttered throughout the accounting world. You may have heard it from colleagues, friends, and you might have used this phrase yourself. Change is often difficult to accept. Why is it so important to change the way we’ve always done things if it’s worked for so many years? 

Technology is impacting the world around us faster than most of us can keep up with. New software programs and the automation of tasks and processes touch every industry, and the accounting industry is no exception. What we once wrote out by hand in thick green ledger books and balanced with a calculator or brain power, we now type into a software program, and the balancing is done for us. That’s one major leap in efficiency, but advancement hasn’t stopped there. 

Efficiency & timeliness 

In this fast-paced business environment, there are two strategic reasons to consider updating outdated and/or manual processes: efficiency and timeliness. 

In order to be timely, we must be efficient: efficient in our day-to-day tasks, efficient in our communication, and efficient in our overall process. It is no longer acceptable to wait 15-20 days, or sometimes even months, to analyze a set of financial statements. By this time, the data is old and irrelevant, and it cannot be used to make forward-looking decisions. Financial statements alone aren’t enough to truly evaluate your business position and operational standing. Owners, finance leaders, and shareholders want to know what’s going on in the businesses today, so they can plan for the future accordingly. The processes and  systems of yesterday cannot satisfy the need for this information. 

Outdated accounting systems 

Accounting systems can be your biggest asset or greatest liability when it comes to timely data and reporting. Newer accounting systems and newer versions of legacy systems have built-in capabilities to automate just about every accounting-related business process, such as: 

• Cash management 
• Receivables and billing 
• Accounts payable 
• Inventory 
• Project costing 

With the ability to automate and interconnect each business process electronically, more data can be captured in real-time and the quality of reporting becomes more robust beyond the traditional financial statements. If you are still operating in a system that automates the general ledger, but not the processes that lead into the ledger, it’s time to reevaluate your system.  

Outdated accounting processes 

Investing in a new system to capture and report data in real time is the first step toward timely financial and operational information. However, a new system alone is not enough if you do not improve the processes that surround getting the data into the system. The processes leading up to data entry, or data capture, must be evaluated and revamped to become more efficient.  

• Do you still fill out paper forms, such as purchase orders? 
• Are you still manually coding and filing your AP invoices in file cabinets on-site? 
• Are your approvals manual? 
• Do you have multiple operational systems that are disconnected and require hand-keyed or manual data transfer? 
• Do you find yourself buried in countless Excel spreadsheets when trying to make sense of your data? 

If you answered yes to any of these questions, it’s time to reevaluate your business processes. Embracing and incorporating  new technology  into your back office processes helps your business operate more efficiently by reducing the amount of time spent on administrative tasks, offering real-time visibility into your financials, and allowing you and your staff more time to do what matters most: serving customers and running your business. 

EisnerAmper professionals have over two decades of experience helping clients implement accounting and ERP software solutions. Contact us below to start a conversation about how to bring your organization’s accounting function up to date.