Here's something of a paradox: technology — ostensibly a solution to all things slow and tedious in the accounting function — can itself contribute to that tedium and slow down, robbing organizations of the benefits associated with accurate real time reports timely decision making. It begs the question: how can accounting software improve productivity?
Technology headaches vary in severity and scope, like a sampler plate of inefficiency and monotony. Disparate systems, legacy technology, scattered data and languishing cybersecurity initiatives all just waiting in the wings to derail your monthly close and torpedo your performance goals.
Anyone who has ever had to compile bookkeeping data from multiple sources, deciphering financial information from within arcane spreadsheets and navigating accounting process documentation inscrutable enough to baffle an expert cryptographer is nodding along as they read this.
Believe it or not, technology can be implemented and utilized in ways that don't induce anxiety or require deep, cleansing breaths to tolerate. The right accounting software benefits finance professionals in organizations of all sizes — from small business accounting departments to enterprise-level international business executives.
Track Expenses & Income
Manual data entry can be a real thorn in the sides of an accounting team with more important things on their plate than waiting for a two-factor authentication text to arrive so they can log in to bank and credit card accounts, record a single line item or check the date of a transaction and then log off again — for now.
Accounting software, platforms and tools can handle this process for you by automatically bringing all of that information securely into one place in real time, and any tool worth its salt offers the functionality to actually do something with the data — run profit and loss reports, generate income statements and calculate interest easily and error-free.
Enable Seamless Financial Operations
Working in several accounting systems just to download to Excel and start from square one can be difficult, inefficient and just plain irritating. Accounting software and ERP platforms with in-built and cross-functional modules can be one of the best productivity tools for accountants who spend more time toggling between versions of Quickbooks Online and Desktop than doing any actual accounting work.
Providing a central place for bookkeeping and accounting professionals to work within while keeping information and data from across the company close at hand reduces the number of steps needed to complete accounting tasks.
Some of these tools make everything from inventory management to employee time tracking accessible from within the same program accountants use to monitor income and expenses or generate financial reports. No more opening and closing software tools, toggling between spreadsheets, hunting down receipts tied to company credit cards or juggling multiple payment reminder email drafts. Point A, meet point B.
And while it may not seem like it's that big of a deal to have to have to click around a little more, all those clicks add up. It accounts for around four hours of unproductive work a week, or almost ten percent of all time spent at work for the year. It's called the "toggle tax" and eliminating or reducing it increases efficiency by boosting the productivity of people and saving time overall.
That extra time can be banked and reinvested in strategic and judgment-based accounting — tasks that have a measurable impact on a business's profitability — and much less on tedious rework.
Quick Invoicing and Status Tracking
Among the many ways to automate manual work across the accounting function is the ability that comes standard with practically every modern accounting software program to calculate, send and track invoices and recognize payments. Some will even trigger payment reminders when due dates draw near, saving time for accounts receivable teams while reducing disputes. Others allow businesses to set up secure payment portals and options that improve the experience for your clients and customers, who are no doubt looking for ways to increase productivity themselves.
All of this means your business gets paid quickly and accurately. Timeliness and accuracy have the added benefit of protecting the client and customer relationships you've worked hard to build, solidifying your brand's reputation and securing repeat business for continued revenue.
Increase Cash Flow While Reducing Business Expenses
The effectiveness of accounting software at reducing business expenses can provide a boost to productivity, too. For instance, consider the improved invoicing process described above. There are several points in that process where automation can potentially step in for manual data entry, each representing an opportunity for cost savings in the processing alone, reducing its contribution to a company's cost-per-invoice, a metric that factors in everything from labor to overhead.
The American Productivity and Quality Center (APQC), a process improvement benchmarking nonprofit, collected data from 1500 organizations across the country and puts the cross-industry median cost-per-invoice at $5.83, smack in the middle of a very wide range. The highest performing 25 percent spend just $2.07 or less for every invoice they process, while the lowest fork over five times as much to get paid — $10 or more.
Some of that difference is unavoidable — industry, company size and the length of the invoicing cycle can all introduce variables — but performers in the top quartile tend to have one thing in common: maturity in process automation. They're saving money on labor and have more time to streamline the invoicing process. That's thanks, at least in part, to the ability of accounts receivable professionals to shift their focus away from manual data entry to data analysis instead, allowing them to identify improvement opportunities to reduce cost.
This is just one example — accounting software productivity benefits extend to all areas of cost-reduction and cash flow improvement. It can help identify wasteful spending, eliminate late fees, make tax calculations and adjust tax deductions accordingly and reveal which products and service offerings are driving or stalling profit growth. And that's not even a complete list.
Accounting Software Improves Security
Keeping data scattered isn’t doing your data security any favors. Between uploads, downloads, emails and print copies, data is vulnerable at every access point and even that is subject to change based on how cybersecurity-savvy individual team members are. Cloud-based accounting software platforms are some of the best productivity tools for accountants because they recognize the importance of locking down sensitive financial data.
They have far better protections and protocols in place than even the most tech-savvy but bleary-eyed tax accountant performing month-end close duties on a personal laptop that hasn't been updated for months. Accounting software IT departments and security experts are tasked with considering things outside of accounting expertise, like user access permissions, shared server tenancy and hardware protections. They must be, to stay in business.
Any reputable accounting software provider will be PCI certified and have safeguards ad contingencies in place to prevent privacy breaches and data loss. If you're unable to say the same about the legacy tools and systems you're using now, you risk the kind of productivity loss that's not easy to bounce back from.
The Added Value of Accounting Software is in Providing Access to Expertise
There are tons of ways the right accounting software solutions deliver productivity. Automation can shave time off manual processes that, taken together, add up to major efficiency gains. Accurate and straightforward reporting help streamline compliance, while collaborative all-in-one platforms can help clear countless meetings that could have been emails from schedules that can't sustain them. These are all tangible, measurable units of added efficiency — hours recaptured, and dollars saved. It's quantitative.
But the big value-add to productivity that accounting software has to offer is in what it can't do: the efficiency and productivity it enables is qualitative and therefore much harder to measure.
It makes financial reporting straightforward so that accountants and finance leaders can plan their next moves. It can deliver cash flow projections, but relies on a CFO's ability to anticipate and understand the forces most likely to affect market and economy conditions to supply the scenario those projections can exist in.
Accounting teams and finance leaders can use the tools in accounting software to build the scaffolding that supports high-level judgement-based accounting strategy — it provides access to expertise that already exists on your team that's being wasted on manual tasks, handling disputes and correcting errors. It also makes it possible to access the expertise that you need by freeing up resources to spend on hiring qualified talent.
It's true that adopting technology in the form of accounting software is something that finance teams can no longer afford to put off. However, narratives designed to entice and urge them to do so will occasionally exaggerate what this technology can do, implying that with the right suite of add-ons, hiring headaches can be a thing of the past.
A much better and more realistic argument is that with a combination of the right technology, right people and strong partnerships, accounting software can supercharge productivity and help businesses reach goals they may not have otherwise even set.
For over 35 years, Personiv has partnered with businesses to supplement their evolving tech initiatives with highly skilled talent to reach strategic goals and maintain a competitive edge. Our tech-agnostic approach allows for nimble integration that allows your team to operate within your parameters, using your tech stack to help realize your goals and vision for success.
Ready for next-level productivity on your accounting team? Take the next steps:
Read a case study to learn how we partnered with a major logistics player to streamline processes in tandem with a major migration from SAP to Sage.
Explore our process for providing virtual accounting talent — no black boxes here.
Get in touch with one of our outsourced accounting experts and let us know how we can help.