This series is dedicated to helping answer the question… Why automate accounting? I have already written about the people . This week I am going to write about the corporate structures and situations that can benefit from accounting automation.
I want to start with the type of companies that has the biggest benefit… companies with centralized accounting. These are companies that have a single corporate location with detached offices. There are many different types of business that have this model:
- Real Estate
- Gas Stations
- Grocery Store
Using banking as an example, the invoices usually show up at the branch for approval first. Once approved each invoice is sent to the corporate office for additional approvals and then entry into the ERP system for payment. It is that structure that makes accounting automation so useful for banks. The more spread out the branches are from the corporate office to more expensive and time-consuming the process becomes. Automation naturally will shrink the amount of time it takes for one invoice to get from place to place which will eliminate the late fee or accounting fire drills. In my opinion the fire drills are worst than the late fee because it causes everyone to stop what they are doing to handle an emergency, which is a big interruption to a productive person’s day.
So you might be tempted to solve the speed problem with email. It is a nice idea and a great introduction into automation, however scanning and emailing is another time-consuming proposition and has a tendency to fall onto a person that will de-prioritize the task because of their other more important tasks. Getting rid of the paper at the source and attaching those electronic invoices to an approval process (workflow) takes an organization like a bank (or any of the other listed above) and immediately centralizes the process and shrinks the time it take to process an invoice.
There is one other benefit to automating centralized accounting with detached operations… The accounting group will be able to track and report against who is holding onto the invoices as well as (depending on your services provider’s capabilities) to read the notes of the people holding onto the invoices. This simple measure of knowing and reporting stops the whole “he said – she said” about where invoices are in process… accountants love this.
To wrap it up… there are three primary benefits for companies that centralize their accounting, (1) Saving Time (2) Saving Effort effort that can be put to better use (3) Improving communication.
Tomorrow I am going to write about project based accounting companies and the benefits they gains from accounting automation. Stay tuned!
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Categories: Accounts Payable Automation