Digitizing accounting: 11 benefits of paperless administration

For a while now you’ve been wondering: should you digitize your accounting? Left and right, you hear positive reports about a paperless office: it would make companies work a lot more efficiently. No hype, as it turns out – because organizations that are going paperless are excited about the many benefits they are enjoying since adopting digital accounting. But what exactly are the benefits when you work not with paper but with digital invoices? And how do you actually start with paperless accounting? In this blog we describe 11 advantages and a 3-step plan. If you want to digitize your bookkeeping, read on!

Why process everything digitally? 11 advantages

When you set up digital records to process purchase invoices and other incoming documents, you’re operating efficiently. In fact, you’ll enjoy the following 11 benefits.

1. Clear overview of your accounting

When you do a lot of manual administrative work, it’s easy to lose invoices and other incoming documents. The paper piles on desks and physical folders in cabinets grow quickly, causing you to lose track. If you start digitizing your bookkeeping, this will be a thing of the past. This is because you collect these types of documents digitally in one central location, where you can always find them in an instant.

2. Fast processing of incoming documents.

When you process incoming documents the traditional way, you spend a lot of time. For example, it takes a hefty series of manual actions to get an incoming invoice processed, approved and into your digital archive. With the right software, you can automate these types of tasks, leaving you with a lot of time. You can spend this on challenging tasks that add more value to the organization.

3. Option to utilize payment discounts

Some suppliers offer discounts if you pay their invoices within a short time frame (say, a week). When you process an invoice on paper, you usually don’t meet these kinds of “deadlines” because of the cumbersome process involved. But digital invoice processing often opens the way to taking advantage of payment discounts.

4. Fewer errors

When you enter invoice data manually, a typo is in a small corner. Making mistakes is human, especially if you regularly have to retype a lot of data. If you use scan and recognize software, it automatically fills in the data for you to create a proposal entry. All you have to do is check it. This means the error rate is minimized!

5. Unambiguous delivery

If you run a paperless administration, you can ensure that invoices come in unambiguously and through one channel. You can create an invoice mailbox and indicate to suppliers that they can send invoices to it. If you explain well how they must submit them (and also ‘educate’ them a bit in this), incoming invoices are immediately ready to be processed in your accounting program.

6. Easily retrieve correct billing information

Sometimes you receive an invoice with incorrect data. If you conduct paperless administration, you can easily return this document to the supplier. After all, because it was presented to you digitally, you can immediately click “reply” and request the missing information.

7. Digital archive

Want to reference an invoice that has already been processed because there are questions about it afterwards? Or is your accountant coming by to perform an audit? In such cases, you need to be able to look up invoices easily. If you have paperless administration, you have a digital archive where all processed documents are stored. You can retrieve them at the touch of a button. How convenient!

8. Generate monthly reports

What are your monthly obligations? When was an order delivered and on what date did the corresponding invoice arrive? What did a purchased product or service cost you in total? Sometimes you need to send such management information. If you run a digital administration, you have all the data in one location. This makes it very easy to generate the reports you need. Moreover, the process runs cleanly from the entry of documents, so your data – and therefore your reports – are up to date!

9. Up-to-date accounts payable

If your accounts payable file is not in order, an initiated payment may go to the wrong party. When this happens, you have to make a recovery entry. This costs an unnecessary amount of time. If you use the right software to digitize your records, your accounts payable file will be up-to-date and you will avoid such an extra action!

10. Streamlined approval process.

Running invoices from agency to agency to get the necessary signatures is a time-consuming process. It can be done more efficiently! How? Automate the process with workflow software. With it, you can send invoices around digitally to approvers, who can give their approval anytime, anywhere at the touch of a button. The software also provides useful insights. For example, you can see how long it takes for a colleague to approve an invoice. You can use this kind of information to optimize internal processes.

11. Good for the environment

Digital accounting eliminates the use of paper. This means that digitizing your accounts is good for the environment. In the context of Corporate Social Responsibility (CSR), this is an important benefit, especially in this day and age. If we can put people on the moon, why should we insist on printing everything out – when we know this is bad for our planet?

How can you digitize your office? 3-step plan

1.
Begin bij je ERP-pakket What is the minimum you need to digitize your accounting? If you know where the pain points are, you can make sure an accounting program will work for you (rather than the other way around). So, among other things, look at where paper and digital invoices currently come in and who should approve them. By critically examining your internal processes, you can determine what requirements an accounting package must meet to move your organization forward. Then it is much easier to start the conversation with ERP vendors and see what they can do for you. 2. Include the organization in digitization plans If you want to digitize your accounting, this means that employees will have to embrace a new way of working. What you want to avoid is resistance when going live with a new system. After all, employees have to carry this change: the solution will only succeed if they understand why they are using it. Include them in every step of the digitization process. 3. Ensure further optimization When the basics are in place, it is time to determine which processes can still be optimized. For example, if you print out invoices received by mail, there are still steps to take in terms of digitization. Good OCR software (for the efficient processing of purchase invoices) and a reliable workflow (for the approval of invoices) offer a solution. In that case, talk to suppliers of such specialized software to really digitize your administration.