Did you know that SMEs use manual accounting systems much more than large businesses? In fact, 18% of small to midsize companies in the USA still crunch their numbers manually. This is mostly because they have fewer financial transactions to process, and these can still be managed by manual accounting practices — that is until their business starts to grow.
Every business has growth goals. Imagine growing your client base and facing increased order quantities, invoices, tax payments, etc., then losing your business momentum because of a sluggish manual accounting system?
Clearly, you would have to prepare for more complex financial transactions if you are looking to grow and scale your company. In general, there are three main reasons manual accounting systems may hinder the growth of your business:
1. Manual accounting systems waste valuable time and talent
It’s not only tedious but time-consuming when your accounting team has to physically locate books, accounts and journals, and sift through paper ledgers and printed documents to manually record entries. This wasted time and talent can instead be spent analyzing financial statements for insights to help you make more informed financial decisions for your business.
2. Manual accounting systems are highly susceptible to errors
Manually processing a large number of printed documents and paper ledgers is also extremely prone to errors. Entering information into the wrong accounts, miswriting numbers or recording information backwards are just a few common examples of mistakes that can occur out of fatigue. These mistakes can be costly and put your company at risk if not discovered and rectified on time. If you’re not careful, they could also harm how customers and suppliers perceive your business and affect overall growth.
3. Manual accounting systems lack security
Another disadvantage of manual accounting is the lack of security. Safe-locking your documents isn’t going to ensure that sensitive data, your ledgers and journals don’t end up in the wrong hands. In some cases, these files can end up getting brought home by your employees accidentally or even worse, be maliciously kept by them. Your worst nightmare? Funds could be embezzled and sensitive data traded to competitors or even destroyed.
Why use a cloud ERP accounting software?
Although purchasing a cloud ERP accounting software to automate cashflow management requires some upfront investment, you could gain far more in the long run from time savings, operational efficiency, and work mobility.
Unlike manual accounting, an on-cloud ERP system is fast, reliable, and more accurate. It increases the efficiency of your accounting operations by drastically reducing the time spent on bill payments, and processing your receivables manually. You can also allocate roles with different levels of permissions within your organization to make sure that only the right people get access to confidential financial information.
A cloud ERP also provides real-time and secure access to your accounting anytime, anywhere, on any device. On-the-go access simplifies global sales transactions, multi-currency conversion, and online payment transactions.
A cloud-based ERP accounting software is an indispensable tool that helps you manage your cash flow effectively while growing your enterprise. Automate your business accounting functions with Deskera. Schedule a free demo with us to find out how our 2-in-1 accounting and inventory software can help you change the way you manage your cash flow.