If you're wondering how financial and accounting software can save your business money when it costs money up front, you're not alone. The short answer is that investing in Cloud technology reduces work hours through the automation of manual processes. This then expands into cost-saving areas such as eliminating data entry errors and reducing the time to produce accurate financial reports.
You can make better decisions for your business by investing and implementing Cloud software in your finance function because it consolidates all your financial data into one place. You'll be able to see your business's performance whenever you want, identify methods of reducing expenses and perform accurate cash flow analysis to minimise wasteful expenditures. Additionally, it can help you predict and prevent financial bottlenecks, track financial performance overtime, and assist CEOs in making business-related decisions.
We know what you’re thinking. Yes, it will cost you money, but it is worth it for an efficient accounting process. Although these systems usually cost more to purchase, install, and train, your business's long-term gains in productivity and efficiency will more than offset the cost over time.
The cost of not having modern financial software
Despite the increased accuracy and speed of today's software, many finance and accounting leaders prefer to remain with processes and systems they are familiar with rather than adopting new technology.
The familiarity of these traditional accounting approaches can be comforting, but they also lead to high costs, an increase in errors, and a delay in accessing key financial data. Often, these problems manifest in the form of missed deadlines and opportunities, frustrated and unmotivated employees, and non-compliance. Businesses can suffer from any of these issues and incur higher costs as a result.
Often, businesses do not realise the additional costs associated with continuing to use outdated financial software, which may prove to be more expensive than investing in Cloud finance and accounting software. Below, we have listed some key cost areas businesses should consider when evaluating their existing financial software.
Higher operating costs
Legacy systems require costly maintenance and are often prone to failures which negatively impact customer trust and reliability. Switching to Cloud technology greatly reduces the risk of failure and overall maintenance costs, saving you money in the long run. Moreover, old technology is difficult and complex to integrate with new, modern technology. It essentially means that business processes aren't as efficient and opportunities to leverage new functionality are often missed.
Workplace productivity takes a dip
Older software runs slower, executes tasks more slowly, and requires more maintenance and updates than its newer counterparts. It will lead to demotivation in your team if the tools or applications are preventing them from doing their job and causing them to waste time waiting for issues to be fixed and leaving them unengaged. In terms of revenue and ROI, decreased productivity can hurt your business.
Sluggish data processing
Data processing is a routine part of a business' operation, but it shouldn't take a long time for them to get the results they need to make informed decisions. Most give the excuse that it's the way it's always been done. However, this doesn't have to be the case. Upgrading an outdated software solution is all about increasing efficiency, enhancing productivity, and simplifying operations across the business.
Breaches in data
Software that is unpatched is more susceptible to attacks and automated scanning bots, which may put sensitive company data at risk. A total crash could leave your finance team in the dark, halt operations, incur additional work hours while trying to recover/replicate information, and require firefighting to properly protect financial operations.
Legal and regulatory compliance fines
In order to ensure that your data is stored safely and securely, it's important to adhere to regulations. By using outdated or unsupported software, your business may incur costly penalties. Moreover, financial compliance practises such as Making Tax Digital require the latest software to keep up to date with submission requirements and documentation.
Manual software integration wasting time
Integration of systems is a requirement in today's business environment. In the absence of integration, employees must manually transfer data between different tools, which is very time-consuming, and many companies wait until an issue occurs before upgrading legacy software. The worst-case scenario is that you lose all your data in a system crash or you face cybersecurity breaches that compromise sensitive financial data, both of which lead to costly consequences.
Areas where financial software can save businesses money
Work smarter, not harder
For finance teams looking to meet business demand, it’s not always about a lack of resources, but instead, a lack of time. Time wasted on low-value, recurring tasks, such as manually updating spreadsheets, creating new reports each week, and approving billing items quickly adds up. Although computers cannot replace the value people bring to your organisation, they can make a big difference in your finance and accounting processes
With automated processes in place in the Cloud, assembling reports and calculating KPIs is faster than using manual entry in Excel which makes it easier to access important financial information any time, thanks to the system’s built-in reporting capabilities. For example, if you need cash flow figures right before a meeting, you can quickly generate a polished, accurate report from your dashboard rather than spending an hour manually creating one and triple-checking it for errors.
Say goodbye to manual reporting
The average report is distributed to eight individuals, adding to the workload and reducing productivity. Accounting software in the cloud enables businesses to automate report creation, allowing them to cut costs or redirect resources to more profitable activities. With automation, the benefits of the investment add up quickly, and that investment can then be used in other parts of the business to generate greater returns.
Accuracy in data entry
The most notable benefit of accounting software is the reduction or elimination of human error when it comes to data input and calculation. In Excel, one mistake can cost you more both in time and money if you enter the data incorrectly. For example, traditional bookkeeping processes require you to do your own calculations, which can lead to wildly inaccurate accounts. Accounting requires accuracy, so any method that helps you consistently produce error-free results is a valuable tool.
Decrease invoicing costs
For businesses that still rely on manual processes, invoicing the customer can be an expensive proposition, and business growth typically involves more invoicing. By integrating accounting software with other departments, you can reduce this cost significantly since it can automatically create and send invoices to customers and recognise payments.
Manual invoicing requires managing master customer and product files, generating billing data, transmitting that data to customers, posting receivables entries and resolving billing inquiries. Paying your employees and clients accurately and on time fosters stronger relationships and maintains your company's reputation - and you can't put a price on that.
Gain greater cash flow visibility
Cloud-based cash flow analysis and reporting provide businesses with a comprehensive and accurate financial picture in real-time. By linking all corporate accounts to an expense management system, all transactions, accounts, and anomalies can be viewed, managed, and flagged.
When you have a clear idea of where your business is, you know how to get where you want to go. The purpose of cash flow tracking is to help business owners stay on top of their cash flow and estimate expenditures. It helps to keep track of how much cash comes in and goes out.
Identify wasteful spending
Automation frees up time for the finance department to spend on evaluating business performance instead of manually entering data or reconciling multiple Excel spreadsheets. In addition, because finance and business know they can rely on the numbers once they are entered into a general ledger, they're more willing to make critical decisions.
Accounting software can, for example, help identify which employees produce the most value in relation to their salaries. It is also possible to use accounting software to identify the most profitable customers in order to make sure that the business does not spend the most time and resources on the least profitable customers.
Seamless tax compliance
Tax filing errors can cost businesses thousands of pounds in fines and fix fees, resulting in a lot of stress. Accounting and finance software pays for itself quickly based on the fact that one seemingly minor error can be very costly.
With the Cloud, you can keep all your records, receipts, expenses, invoices, and transactions in one place, which makes filing business taxes easier. In this way, accounting and finance software can handle a lot of the heavy lifting to make filing more manageable, including generating reports for the finalisation of tax returns and estimating the amount of taxes the business may owe.
How financial software from Advanced saved NPTC Group £100,000
NPTC Group’s 12 sites cover over one third of the landmass of Wales and the Group was previously hindered by inefficient paper administration. Advanced’s OpenAccounts financial management and eBIS workflow solutions have enabled NPTC Group to centralise its finance function and automate the processing of 20,000 documents each year.
“Advanced’s solutions have enabled us to centralise our finance team and save approximately £100,000 so far. No longer having to circulate paper between our sites has also reduced delays and avoided documents from potentially going missing. We can now access financial information immediately and reporting is streamlined.” - Kathryn Holley, Vice Principal Financial Services at NPTC Group
Invest in the future of your finance function
Adopting the Cloud can come with an upfront cost which can seem daunting at first. However, it saves businesses a great deal of money in the long term. This is why many finance functions have already taken advantage of the Cloud’s new technologies which has provided them with the performance, security, and cost control required to thrive in uncertain times and remain ahead of competitors – all while saving on costs.
Our Accounting and Financial Management Software can help you save on business cost through:
- Reassurance that your data is protected from cyber threats which, if left unprotected on an old system, could cost thousands and cause a business to collapse
- Instant access to your data wherever and whenever you need it
- Real-time reporting right at your fingertips
- Automation of previously manual tasks so cost is saved by more time spent on value-adding projects
- Human error eliminated thanks to up-to-date financial compliance rules and regulations
- Automatic software updates so you are always using the latest version while remaining protected from cyber threats
And that’s just the tip of the iceberg, find out what else Advanced Financials can do for you and your finance team and get in touch today.