Definitions for Accounting Automation

This won’t be the greatest article I have ever written. As a matter of fact it may have the least immediate benefit of any article I have written. On Monday (9/30/2013) I am starting a new series on Accounting Automation and what people, companies, accounting systems and situations are the best fit.

In preparation of the series I decided I needed to do a quick post on certain terms that I will be using to make my point. Instead of writing a definition each time for each term I thought it would be a more effective use of space to write an article on those terms and link back to them when I refer to them. That is what this article is about. Here are the terms:

• Accounting Automation
• No Paper Invoices
• No Paper Checks
• Cost Per Invoice (CPI)
• Cost Per Process (CPP)
• Accounting System
• Service Provider
• Vendor
• SaaS
• On Premise Software

Accounting Automation = No paper invoices, an accounting system, and no paper checks.

No Paper Invoices = all invoices are either scanned (by a third-party) or electronic, which is email, vendor (see below) portal, EDI, CSV, XML, TXT… to name a few.

No Paper Checks = all checks printing or process is outsourced (by a third-party) or are ACH, Wire, Draft or Paid by a Credit Card.

Cost Per Invoice (CPI) = The total cost of when an invoice is received and processed into the accounting system.

Cost Per Process (CPP) = The total cost of all processes associated to accounting, which include but are not limited to, invoices, 1099, reconciliation, payments and filing.

Accounting System = A system of record where all financial transactions are recorded and reported along with managing the vendor records, the companies bank accounts, chart of accounts and money.

Service Provider = A company that provides automation software and services.

Vendor = A company that provides goods and or services to your company that will ultimately invoices or be paid by your company.

SaaS = Better know as Software as a Service or in the cloud, web-based or net based. This is a company where there is no need to buy or maintain hardware and software to run their systems. All is needed is a connection to the internet.

On Premise Software = This is software that you buy and install on your computer or in your company’s own data center.

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