Accounting is often the area of an organization that time forgot. Technology and progress seem to have passed by relatively unnoticed. Comfortably clad in a cashmere sweater and M&S slippers, accountancy has always embraced its home comforts. Still heard now are cries of “Sometimes I wish we could just go back to a big book, pencil and rubber!”
However, with the great innovations that are currently emerging, even accounting couldn’t resist joining the party.
Though there are many who still have reservations about how accountancy can benefit from technology, more and more of us are beginning to truly appreciate its value. So, how can your business benefit from the Future of Accounting?
The Future of Accounting is Analytical
Traditionally, financial reporting is quite basic. The usual three tier system allows you to analyze your financial data against as many accounts as you post against. Depending on your software, you are able to track project spends and the like.
As a whole, it is unlikely you can get good granularity on reporting. Analytical Accounting focuses much more on tracking and analysing your financial data on a deeper level. Tracking costs and revenues in a more detailed manner means you are able to investigate specific areas of your business. Identifying what causes you the most problems and which areas are most fruitful.
Often, we forget just how powerful our accounting data can be. When you think about your business as a whole, the first question to ask yourself is ‘How do we measure success?‘. For many, the answer will be “Profit!” – but try to think about how you would like to see that broken down.
I guarantee, the more you think about it the more ways you will want to be able to see, measure and track that success – why wouldn’t you? What better way to understand your business?
One thing that has become increasingly important, in recent years is the ability to access up-to-date/real-time data. The days of monthly reporting are long gone. In today’s society, time is everything.
The world around us moves so quickly that even last week’s data is out of date. Access to real-time information is pivotal in making fast-paced decisions. This new way of reporting ultimately helps businesses understand the fundamentals of their business. The areas that for so long, were hidden behind complex financial statements that only emerged once a month.
The Future of Accounting is Cloud
What was once seen as an unsecure and unsustainable basis of storage has, in recent years, become an absolute must for the majority of businesses. The cloud abolishes the need for traditional on-premise servers used to store, manage, and process data.
Given the huge cost savings involved, it’s no real surprise. No more application installations or expensive on-site servers. One of the greatest attributes that Cloud accounting has is how cost effective it is to run, especially when compared to traditional on-premise solutions. The hardware costs are all but eradicated along with the associated overheads. One CIO calculated a saving of £26,000 ($32,000) over 3 years as a result of moving to the cloud.
The benefits of Cloud Accounting don’t stop there. The Cloud provides organisations with instantaneous access to their data. Whether that’s the Finance Director checking the Gross Profit on her mobile phone, a Sales Rep entering Travel Expenses from his tablet, or the Credit Controller reviewing the Aged Debt at her desk, Cloud Accounting gives users the freedom to access the accounting system whenever and wherever they need.
By simply logging into a browser window, you get as much access as if you were plugged into to your old Desktop. The ‘real-time’ nature of Cloud Accounting means that as transactions are entered, you are able to watch your financial dashboards change throughout the data.
This access to up-to-date analytics is what brings true value to a business. Updated instantly, with every transaction, Cloud computing is perfect companion to Analytical Accounting.
The Future of Accounting is Automated
Whether it’s self-driving cars, industrial production lines, or self-reconciling bank feeds, automation is the next big thing in technology. Having systems complete repetitive and mundane processes is no longer considered a luxury.
Businesses actively seeking out ways to offload non-value-added tasks to other sources is nothing new. However, the ability to do this by simply using software that automates tasks is an up and coming concept.
Accounting is often thought of as the one area of the business that cannot be changed or updated. It’s accounting, it’s structured, it’s rigid. However, these days are coming to an end.
The structured nature of Accounting makes it perfect for automation. Rather than using the power of a person to sit and reconcile your bank statement, why not let software sift through and tick off those transactions?
Instead of having a person sit and enter the same invoices to the same companies for the same amount every month, why not let the software put those through? Harness the power of the people you have at your disposal for tasks that require a little something more. Maximize the potential of your team by eradicating the monotonous tasks and give them the freedom to show you more.
So, what software packages provide us with this?
Sage Live provides a multi-dimensional ledger, allowing you to track revenue and costs by tagging transactions to specified Dimensions. These dimensions may be Projects, Customers, Account Managers. Anything you want to track, you can set up and do so.
Most importantly, you can then report on these in real-time. This is a stark contrast to more traditional solution like Sage 50 & Sage 200. These solutions are relatively static in terms of what you are able to report on.
The ability to automate your bank feeds, recurring transactions and reporting is one of the great ways the system can help streamline your business. Built on the Salesforce platform, Sage Live provides integration not only with Salesforce CRM but 1000’s of external apps including MailChimp, Outlook and many more.
Unlike traditional on-premise solutions, the cloud based nature of Sage Live allows users to access the system for anywhere they like, from entering expenses on the go to reviewing reports.
Sage is just one example of the many cloud accounting solutions that can help your business. With many systems offering modular deployment to fit to your specific business needs and scale.
With the emergence of Analytical Accounting, Multi-Dimensional Accounting, and Cloud Accounting, to name but a few, the future of accounting is upon us. The most exciting part about this is the powerful capabilities that come with it.
Accounting was once a pen and paper exercise. As the world has progressed in technology, accounting seemed to simply sit, comfortable. What we are now seeing is the beginning of a new age. An efficient, innovative means of money management, straying so far from its humble roots that is it almost unrecognizable.
Looking for Accounting software? Check out Capterra's list of the best Accounting software solutions.