Accounting is one of those disciplines that without fail, a lot of people associate with old traditions and endless paperwork. Although accounting is very similar to technology and other fast moving disciplines. Changes in governance, reporting requirements and business acumen mean that outdated accounting could be costing your business a lot more than you realise. It can be hard to keep up and stay across everything that may be changing in your business needs, as there simply isn’t enough hours in the day. If you are ready for a change but not sure it’s a priority, let’s understand how those outdated accounting techniques could be costing you more than money.
Manual accounting systems, like spreadsheets and even offline ledgers, were functional for a time. In business today they could be costing you a lot more than just additional labour. Spending time manually populating spreadsheets or reviewing written logs takes time away from activities which could be more beneficial for your business. Implementing or changing payroll software can help free up your time to focus on revenue generating activities like onboarding new customers, developing a CRM, or working with suppliers on more efficient supply channels. It’s time to stop entering values into a cell and claim back that lost time, and potential revenue.
For a lot of outdated systems and practices, as time evolves so do the ways in which we use them. What inevitably ends up happening is an employee, or even you, find a way to get around the challenge or process that your current methods don’t allow for. In the case of employees finding shortcuts or processes to circumvent the outdated practices, you will lose more than just headcount if they leave. You end up losing the intellectual property or the processes that individual has created to make the practices work more efficiently and in line with current trends. This becomes a costly problem if the shortcut or process change is something that is required to service a customer or your business. Instead of an employee walking out the door, you could also be losing the efficiency gains you have seen in your accounting practices.
Outdated accounting techniques and relationship building seems like a long string join, but bear with us. The chances are if you are managing your cash flow manually and not taking into account history of orders and quantity levels, you are missing a chance to build stronger relationships. Automated accounting systems allow you to make timely business decisions like working with customers on their ordering trends, or offering on-time payment discounts. Customer relationships aren’t just about cash flow, they can be further leveraged and become a source of additional revenue later down the track. Outdated accounting practices won’t allow you to take relationships to the next level which could cost you more than just money in the end.
Outdated or manual accounting practices make it incredibly difficult to optimise your business, especially when it comes to your inventory. Managing stock by manual counts and spreadsheets could lead to enormous errors in holding liability. A proper accounting system will allow your business to better manage inventory and even work toward identifying and capitalising on seasonal trends. This will help lower not only the liability you hold, but the efficiencies in production could be huge in the long run.
Accounting is a discipline that like many others, and it requires constant attention and updating. But it doesn’t have to be so. Outdated practices not only affect the bottom line, but also have the potential to impact staff, customers and even processes. Instead of allowing your business to lose more than just money, use this simple guide to help update your business today.
Source: The Inscriber Mag