Still have manual accounting processes?

JP Lourens, Solutions Manager, KYOCERA.

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Finance and accounting professionals face a steady stream of work and long lists of tasks to complete at the end of each month.

A single data entry error or missed payment deadline can have serious consequences for the business, including unhappy customers, suppliers and employees.

“As companies realise that manual processes are inefficient, time-consuming and prone to errors, which adds costs to the business, automated processes become more sought-after to reduce mistakes and streamline the business,” says JP Lourens, Solutions Manager at Kyocera Document Solutions South Africa.

According to a report by the Association of Chartered Certified Accountants, 55% of finance executives and professionals expect the development of automated accounting systems to have the greatest effect over the next three to 10 years.

Kyocera Document Solutions South Africa highlights key processes that need to be automated for maximum efficiency.

Challenges of manual processes

There are a number of challenges that a manual process brings:

1. Time-consuming and inefficient

Manual accounting processes use paper documents and ledgers that take time to sort, record and process through the system. Manual filing systems enable a limited number of sorting indexes, and can also result in lost or misplaced invoices or receipts. And because each document takes longer to process, the accounting team becomes more stressed and overworked, resulting in unhappy employees and below-standard performance.

2. Prone to errors

It’s human to make mistakes. Errors can take the form of misspelled names, incorrect account numbers, jumbled numbers or financial figures, and wrong dates or pricing information. In a manual system, it can take a lot longer to track and correct these common mistakes. An incorrectly filed document is difficult to locate.

3. Lack of visibility and control

Accounting involves lots of documents, from bills and invoices to bank statements and other financial information. This can be quite overwhelming and difficult to track in a manual process. For instance, monitoring and reporting payments can be difficult. It would require constant manual tracking, from data entry and processing, to updating and reconciling the actual payments.

4. Manual invoice approval process

Invoices and bills require verification by department, project or team expenditure approvers. A manual or “electronic” e-mail approval process is very inefficient. It is finance’s responsibility to pay an invoice or bill on time and ensure business continuity. But if the document is misplaced or is still on the approver's desk, it will take time and effort to trace back a mistake. Manual control of simple or complex document approval workflow is extremely difficult and a human resource-hungry process.

5. Lack of security

Security is one of the biggest challenges with manual accounting. Paper documents make it difficult to track and monitor sensitive business and customer information.

Documents can be lost, stolen, copied or altered without anyone knowing. A data privacy or security breach can have serious consequences for a company, from the loss of customers and a damaged business reputation to financial losses and problems with legal or compliance issues.

Where to start: Key processes to automate

To keep up with the demands of the business, accounting operations need to be more efficient, accurate and secure, and need to have the ability to provide more visibility and control.

This is why automating processes make a lot of sense. But where do you start?

Accounts payable 

Start the journey by focusing on the accounts payable (AP) function. By automating the manual AP workflows, the process becomes a lot simpler, more efficient and more manageable. Depending on the size of your company, AP automation can reduce the total time it takes to process an invoice by 60% to 70%.

By automating the AP function, a company can:

• Centralise all data for easy access and storage;
• Reduce invoice-processing time and labour costs;
• Implement simple and easy-to-use processes and workflows;
• Minimise data-entry errors and double handling; and
• Gain visibility and enhance security at each stage of the AP process.

Audit

An audit can be a long and drawn-out process when using a manual accounting system. Even just locating specific documents would take time. With an automated system, all the information is available without having to sort through filing cabinets.

Automating audit documentation also improves data security. Since all information is digitally stored in a central location, it would be easy to track and monitor access to sensitive and highly confidential business data. Audit documents can be prepared and sent in a predefined view, so the auditor can work from their office without the need to access your enterprise resource planning (ERP) system.

Procurement

Depending on the size of the company, procurement can be a complex process as it involves managing suppliers, working with quotes and purchase orders, handling invoices, order tracking and regular reporting. So, there is a lot of paperwork to go through, manage and organise.

Automating the procurement process therefore starts with digitally organising and centralising all documents for easy access and storage. This streamlines procurement workflows, resulting in better supplier relationships and hassle-free ordering of goods and services.

Monthly reporting

How much time do you spend on your monthly reporting? With a manual accounting system, the process takes a lot of time since you have to make sure that all the information is entered accurately. But because you’re working with specific deadlines, it can be difficult to balance speed with accuracy.

Automated accounting processes significantly reduce the time spent entering paper documents and checking the accuracy of the information. It allows for a faster, more efficient and more accurate month-end process.

To start organising your financial and accounting information in one central location, consider implementing an Enterprise Content Management (ECM) solution. ECM digitally and securely stores all sensitive business data, with easy access to the information anytime, anywhere.

Need help finding the right ECM for your business? Download the Enterprise Content Management Solution checklist today.