More and more businesses are switching to digital technologies to streamline their processes and create more efficient workflows. This can certainly be applied to accounting as well.
Digital accounting is changing the way businesses perform administrative and financial tasks. Your office will no longer be full of filing cabinets, stacks of unorganised paper or lost receipts. Digital administration digitalises all your documents for you, creating a more efficient, higher quality and structured accounting system.
Does the transition to digital administration sound like a difficult process to you? Digital administration requires several steps to move away from paper-based, manual processes. Once these are in place, the time and effort required for financial admin tasks will be significantly reduced.
In the first part of our blog series, we'll help you understand the steps you need to take. We'll highlight the potential obstacles you may encounter and solutions to combat them. Read on to learn more.
What is digital accounting?
Digital accounting consists of the creation, preservation and transmission of financial information in electronic format.
Digital accounting is the end result. All your documents, transactions and accounting processes will be completely digital. The first step towards this goal is to start digitizing your administration.
Like most businesses, you have a duty to keep financial records. It consists of your receipts, invoices, bank statements and any other evidence of income and expenditure,... These documents serve as the basis for your accounts and must be kept for five years if you are a sole trader. If you are a limited company, six years.
Save time and energy!
Organising your current accounting documents may seem simple. You can have filing cabinets, folders and a system that knows you can find any document from the last six years there.
But how much time and effort does it take to maintain this organisation? Not taking into account the time, effort, and space that all these documents can take up.
A good digital accounting solution, whether combined with an accountant, tax specialist or not, can save you a lot of time, space and effort. No longer will you have to spend time retrieving documents through piles of folders, or constantly filing any new document that pops up. A digital solution can take care of all this. This means you'll gain a lot of time that you can dedicate to growing your business.
Digital is safer
Switching from paper to digital invoices will make your accounting processes faster and more secure.
The due date of the invoice shall only commence upon receipt of the invoice. If it is a paper invoice sent by post, several days may be added to the invoice. If you switch to digital invoices, these few days are removed completely. Invoices reach your customers in seconds, so the invoice due date starts immediately, which means you'll get paid faster.
A digital invoice is also more secure in terms of control records and reducing errors. A paper invoice requires manual data entry, multiple times throughout the invoice chain. Digitalising an invoice reduces the need for data entry, meaning there is less risk of human error during this process.
Also use the digital invoice control record. Send out your invoice and see when it has been opened, viewed and even paid.
Does the digital journey seem like a step forward for your business?
Digitization really has many advantages. Once you discover the benefits, digitization becomes a simple and intelligent tool for any business. Once your administration is digitized, you are ready for step 2 of our blog series. Find more advice here.