Accounting is a necessary aspect of any business, and one that makes the business run smoothly.
Every business must maintain accurate and detailed financial records of their income, expenses, profits, and losses. While some people prefer the manual process of posting to journals, ledgers, and worksheets, others enjoy a digital accounting system.
If you’re responsible for your company’s financial matters, you should consider converting your accounting books from paper to digital.
Digital technology has become the “go-to” technology system for most businesses. From marketing and accounting to videos and online dating, the information age has become prevalent throughout the world.
Over the years, technology has made it easier to convert paper documents into digital files that can be stored and retrieved more efficiently and effectively.
When it comes to accounting and finances, keeping paper, or hard-copy, financial records and other accounting activities can become tedious. There is also a greater chance of losing your financial books or having them stolen.
Making your accounting and finance processes digitized can not only keep your financial information organized and systemized, it will also help you easily retrieve your information. Also, you will have increased security, more storage space, and higher productivity in business.
So, what are the key benefits of converting your accounting books from paper to digital format?
1. Improved Accessibility
In many instances, multiple departments need access to the company’s financial information.
Having to manually search through hundreds, if not thousands, of paper files is difficult, inefficient, and time-consuming. Fortunately, you can retrieve digital files in a matter of seconds by using keywords or phrases in the content or file name.
Additionally, if financial records need to be shared amongst a work group that is not geographically local, cloud storage allows documents to be retrieved from office computers, laptops, and mobile devices. Having the financial information in a digital format makes it easily accessible to those who need it instantly.
If you’re concerned about security of sharing financial data across a network, you can create password-protected files and authorize access to those files to specific individuals.
2. Better Security
Numerous companies have a filing system in place to store financial documents for many years.
However, this increases the risk of potentially sensitive information being lost, stolen, or even damaged.
Transferring your accounting books and other financial forms to a digital format increases security and can protect your sensitive information. Yet, you must ensure you are storing the information on a secure server, using an encrypted and password-protected storage system, and that you are backing up your digital information on a regular basis. This helps reduce the risk of loss, theft, or damage.
As previously mentioned, many companies have a place to store financial and accounting documents. This, of course, can take up a huge amount of space, oftentimes making companies feel cramped for work space.
Electronic storage of documents is cheaper and more effective than using a filing room or even renting a warehouse. You can fit a dozen boxes filled with paper forms onto one USB flash drive.
Using a flash drive is the perfect way to keep essential financial files always available. Because of their physical size, flash drives can easily be put in your pocket, on a keychain, or in your purse for easy access.
If you are a business owner with an accounting department, it’s possible that your bookkeeper or accounting manager may spend a majority of their time handling basic accounting responsibilities dealing with paper documentations.
Computerized accounting software has transformed the business and financial industries. Using a digital format has enhanced your accounting personnel’s ability to analyze, extrapolate, and report financial data more efficiently and effectively.
Reports can be produced quicker and easier, thus increasing productivity.
Speed And Efficiency
Entering data into digital accounting programs is quicker and more efficient than manual journals and ledgers.
Computerized programs can also have a built-in error detection feature that will alert you of incorrect data. They also allow the user to enter the transaction once, and all accounts associated with that transaction are automatically updated simultaneously.
Manual accounting obviously takes longer, but in the end, it can help your financial personnel understand the procedure of posting transactions and end-of-period process.
Digital accounting programs, on the other hand, automatically retrieve ledger entries for the end-of-period reports. This could hinder a bookkeeper from understanding the process of these types of reports. Oftentimes, accounting students are not permitted to take a digital accounting course until primary accounting classes have been completed.
Accuracy And Real-Time
When it comes to financial reports, one of the biggest benefits of converting your accounting books to digital is that all financial information can be inputted, analyzed, reviewed, and organized easily and accurately. With a digital accounting program, financial information for a specific period is readily available at a moment’s notice.
This allows various types of financial reports to be compiled quickly and accurately using real-time financial data.
Having access to the most recent data available and being able to retrieve critical financial data instantly is a great value for any type of business. Using a manual accounting system can take much longer. It requires the bookkeeper to locate the pertinent information from each ledger, journal, or worksheet, and then compile the information into a report.
You might have heard the phrase “accounting is the language of any business”. We use digital technology in everyday life. Your business is no different. Digital technology allows you to be portable and flexible with your time.
If you own a business and are unable to hire financial personnel, maintaining your accounting books might frighten you, especially if you aren’t good with numbers and figures.
Fortunately, a digital accounting system will make record-keeping easier and less stressful. There is a multitude of benefits of converting your accounting books from paper to digital.
But, if you hate change and still prefer using actual paper books, you can still use a digital accounting system to print out your reports, ledgers, journals, and worksheets. This gives you the best of both the paper and digital world.
Bethany Campbell is prior military, serving in the Army for 6 years as a Mental Health Specialist in Germany and Georgia. She’s been a content writer in the Marketing Industry for almost a decade. She now writes for several blogs, including the Potts-law.com blog.