As technology develops companies are increasingly finding ways to improve efficiency and streamline their services. Despite this one area that many seem stubbornly determined to never change is their desire to keep paper copies of all invoices, memos, purchase orders and other documents. Accounting departments can therefore be heaped with files, crammed with cabinets in every corner (can anyone relate to their “office wall” being comprised the back of a filing cabinet), and it’s something that desperately needs to change.
Going paperless at your workplace has numerous advantages and doing so in the accounting department particularly is becoming not only a matter of convenience, but also efficiency. Here are 4 reasons why your start up needs to adopt paperless accounting today.
Time Saving
Think about how easy it is to find a specific file on your computer. Typing its name into a search bar instantly calls it up. Compare this with how long it can take to find a specific receipt, or invoice when you need to access a particular filing cabinet. That’s the difference between a paperless office and one still rooted in the tactile world. In addition to this, paperless and cloud accounting allows any authorised individual to access a specific document from any location, and not just when they are in the office. In business, these precious minutes, seconds or even hours not spent travelling into the office, and hauling out thick folders translate into cost savings and additional profit.
Cloud Accounting Advantage:
Consider adopting Hubdoc, Dext (formerly Receipt Bank), or QBO Docs at the front end of your accounting function to capture receipts and match to banking records. Creating a simplified bank reconciliation process from receipt to GST-HST return
Storage costs
All that paper doesn’t only make things less efficient, it also increases costs. In an era where more people are working remotely, and offices are therefore downsizing, having to keep paper copies of every little document takes up a lot more space than is reasonable, and renting that space costs money. Whether it’s in your own office or through a document retrieval company, storage costs money and this is an expense that can be saved through simply adopting a paperless accounting system.
Cloud Accounting Advantage:
Rolling out Hubdoc, Dext or QBO Docs will capture the receipt, and push a receipt, or bill to your cloud accounting platform. Within the receipt/expense is a hyperlink to the original receipt. Audit documentation accounted within the accounting transaction itself, not a box, or misfiled in a cabinet. These tools work exceptionally well with Xero and QuickBooks Online’s (QBO) cloud accounting platforms.
Training and knowledge sharing
A critical employee leaving can throw an entire department into chaos and this is something that the business owner particularly wants to avoid when it comes to accounts. Paperless offices not only reduce the clutter in an office, they also make it easier to share knowledge, circulate information and train new employees into the system.
Allowing employees to share documents, folders and projects online can improve teamwork, encourage innovation, and critically prevent knowledge hoarding, which is usually the cause of problems when it comes to training a new employee.
Cloud Accounting Advantage:
A Customer can add an accounting firm to Xero or QBO by simply adding the firm as a User. The firm itself can design user rights within their own Cloud accounting profile for various levels within their company. If a Customer uses an accountant that works on their own, and that accountant retires, all documentation is maintained within QBO and Xero and the Customer only needs to invite a new Accountant to pick-up where the predecessor left off. Succession planning made easy.
In addition, both Xero and QBO provide certification training, and continually maintain their training regimen to incorporate best in practice skills and product updates through written and video learning modules. Making staff training seamless and complete, with resources to draw upon.
Faster and more efficient payments
Within a standard paper-based system of invoicing and collecting payments: the process begins by drafting an invoice; printing the invoice; packing envelopes; obtaining postage; mailing to the customer, and waiting for an invoice to be paid by cheque, bank transfer, or when the customer comes into the office to pay by credit/debit card. The process is bogged down in both time drafting and delivering the invoice, while waiting to receive the payment, and risk of error aligning the payment to the original invoice.
In contrast, consider the time and cost saved by creating an invoice directly within a paperless accounting system; adding billable labour, material, goods & services with a click of a button; emailing directly to the customer with various payment options provided electronically, and reconciling the transaction to the bank, while populating your GST-HST return with one click. The whole billing, payment collection process, and accounting process can be completed on the same day. In addition, allow real time notification of customer receipt and overdue balances to keep on top of your aged receivables. Better yet, eliminate aged receivables.
Cloud Accounting Advantage:
Both Xero and QBO update their software as soon as your customer views the invoice you sent to them. If days transpire before an invoice is viewed, you can create reminder rules and emails, once in advance, to send a gentle reminder for payment. Again, if the reminder is not viewed, you know that a customer has not received the invoice and a quick call can complete the transaction. Once paid, the transaction awaits an automatic update from your bank connection, to reconcile the transaction. Bookkeeping complete, money and time saved, Aged Receivable eliminated.
Perhaps the largest benefit of a paperless accounting system is that the accounts department’s ability to track and follow up on invoices is immeasurably improved. Previously you might rely on extensive calendars and reminders to follow up on unpaid invoices, but now the system itself lets you immediately see who has paid, and who is yet to. It can send follow ups, or alert staff to pick up the phone.
