Digital accounting is a concept that is becoming more and more common. It means digitizing and automating the accounting process, making it possible to have a real time visibility to the company’s finances.
The results of the successful digitization of accounting means that you can get answers to the following questions on an ongoing basis and trust the numbers you get:
- How is the business developing?
- Is there a sufficient amount of money?
- Are we reaching and following up our goals?
- Can I trust my figures?
It’s often an extremely attractive solution for smaller and medium-sized growth companies. This is because it can reduce the administrative time for owners and management, as well as helping you to have control in real time, which is often needed when decisions have to be taken in a quickly-growing organisation.
The following types of tasks need to be managed differently in order to achieve digital accounting:
- Customer invoices
- Managing agreements
- Creating invoices
- Sending invoices
- Sending invoice reminders
- Managing invoice collection
- Management of supplier invoices
- Receiving supplier invoices digitally
- Recognition of paper invoices
- Revenue account distribution
- Process for certification
- Management of expenses and receipts
- Receiving receipts digitally
- Digital accounting as soon as a receipt is created
- Adding paper receipts digitally via an app utilised by users
- Reconciling card payments against accounting
- Various types of accounting are performed automatically based on templates or machine learning algorithms.
- Create correct accruals based on the type of transaction
- Payment flows
- Month end closing
- Declarations and VAT
- Create ready-to-use reports automatically in real time
In order to digitize the process successfully, tools that support these types of functions are needed. If you have invested in modern tools and use the functions to digitize accounting, it will also be easier to outsource all or part of your financial administration.
The complexity of a business places greater demands on digital accounting
Certain suppliers currently offer a complete service for digital accounting that includes the necessary business systems. The systems used usually offer relatively basic functions for smaller businesses with simple requirements. A separate and more advanced system is often required if the business is more complex and requires functions in areas such as manufacturing, logistics, warehousing, e-commerce and consultancy.
The demands on how to make digital accounting efficient then increase, and more complex and flexible functions are required to create an optimal solution and allow it to change over time.
Managing digital accounting as an international growth company
If your company has international ambitions or is already international with local subsidiaries, the complexity needed to succeed in introducing efficient digital accounting increases. Local regulations have to be followed and the way to digitize different processes varies from country to country.
You can read more about some of the functions required in this blog post.