From: Bizjournals.com
Photo: ISTOCK (BERNIE_FOTO)
Because every industry is different, there are likely no universal examples that illustrate just how much technology has revolutionized the American workplace.
Therefore, consider the amazing impact of computing on an experience shared by nearly every American of a certain age: Writing a high school report.
Thirty years ago, the process began, as it does now, with research. At that time, however, the only place most school research could occur was in a library. Next, the information was organized through handwritten notes and an outline. Then came the writing.
Because home computers were a rarity, most students used pen (or pencil) and paper. Dictionaries, style guides and other thick, printed books aided in the slow yet crucial step of editing.
Typewritten reports were often required and the difficulty of this task ranged from minor to major depending on a particular student’s typing skills. A large supply of Wite-Out or typewriter correction tape was a must for some. Finally, the report was submitted by hand, with the fearful understanding during transportation that only one copy of the final document existed.
Compare those memories to the experience of today’s student. Now, every single step of the report creation process can take place on a laptop or tablet. Research rarely requires a trip to the library, as all of the necessary data can often be found online.
One evolving electronic document serves as outline, draft and final report. The computer does much of the proofreading, thanks to spellcheck. And while a computer printer was once a must, students now often submit final drafts electronically, at any hour of the day.
The need to evolve
So what important business lesson does the rapid evolution of the school report writing process teach us? It reminds us of the need to evolve.
In many companies, “ancient technologies” used 30 to 40 years ago are still in use today.
The need to modernize is likely more apparent in the accounting department than anywhere else. In many companies, paper invoices are still mailed days or even weeks after service is provided. Organizations continue to send and receive paper checks or rely on manual entry of accounting data. Others lack the ability to download data from banking systems.
To be fair, many companies are connected to new accounting technologies in several areas and only certain processes lag behind. However, now is the time to fully automate.
It’s time to automate
Why is this so important? Because the future success of a company may depend on whether it adopts a growing movement known as zero-entry accounting. To achieve zero-entry accounting, companies need to deploy technologies that cross-communicate and allow for the immediate, automatic handoff of information from one system to another. Financial information, both payments received and expenditures, have to travel electronically between the company general ledger and the bank.
Important dashboard data such as sales figures, cash-on-hand and available inventory should be updated in real time. Payroll should be automated with appropriate checks and balances in place. In short, zero-entry accounting means that at no point in the process is a person required to manually enter data.
Once achieved, a fully-automated system can free accountants to focus on more critical tasks, such as ensuring the financial systems are properly talking to one another. More importantly, eliminating manual entry means that accountants can spend their time analyzing and creating actionable financial intelligence.
Zero-entry accounting helps provide company leaders with the ability to immediately assess the health of the business, identify risks and the level of those risks. This information can also be used to identify new business opportunities.
Management accounting is the future
Discarding the need for manual entry opens the door for the future of accounting, which already has a name: Management accounting. It is a system that has evolved from number gathering and number-crunching to providing real-time accurate and actionable data.
A management accountant better serves a company because he or she assumes more of a consulting role with deep expertise in providing the best, up-to-the-minute data that can be used by business leaders to make informed, intelligent and strategic business decisions.
Now that the future of accounting is defined and in some companies, already in practice, what is the first step for a business owner ready to enter the new era? Initially, a deep understanding of the automated systems already in place is required. A company also should be able to identify where processes are disconnected or unable to communicate.
New systems, compatible with existing software, should be employed to replace outdated, paper-based processes, or those that require manual entry. Finally, companies must recognize the grave risks they might face for failing to update their accounting practices. If they don’t act quickly to adopt the latest accounting systems today, their competitors will likely leave them behind.
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