4 Ways Accounting Innovation Benefits Business Owners
Latest posts by Jason Kruger (see all)
- 4 Ways Accounting Innovation Benefits Business Owners - June 16, 2016
As technology advances, so do the advantages for business owners. From screen sharing on conference calls to accessing emails on an iPad while in flight, it’s a great time to run a business from anywhere. The freedom of movement has made it possible for business owners to come out from behind their desks and get out into the world while maintaining the same level of involvement with their company.
Accounting, too, is evolving and changing the way business owners operate. Innovations in accounting technology make it possible for CEOs and CFOs to have a constant pulse on their business’ finances.
Take a look at some of the most significant tech trends in the accounting industry and what they mean for today’s business owners.
Storing accounting details in the cloud is one of the biggest trends from the past decade. If you have a Gmail or Dropbox account, you already use the cloud in everyday business operations. Cloud data is accessible from any place that has an Internet connection, which certainly makes accounting data more accessible when you need them. If you haven’t tapped cloud technology for your accounting details yet, you should. This is also handy if you have multiple people on an accounting team or work with a third-party accountant. Instead of emailing the same file back and forth, which can become a file versioning mess, anyone with access can open and edit a cloud document live – ensuring every team member is viewing the same thing.
Some experts do worry about the security risks of cloud storage and access, especially if people are using non-secure connections to access their account information. However, cloud providers know security is a hot-button topic and work hard to make it a non-issue. There is no indication that documents stored in cloud locations are any less safe than other traditionally stored files. As always, train employees on the best practices for accessing company documents and make sure they know that financial information is always confidential.
Similar to cloud options, mobile access to accounting data means that professionals and clients can access details on the go. The difference between cloud and mobile access has to do with the device in use. Mobile access to accounting information happens from smart devices – like smartphones or tablets – and often through designated applications on the device. Non-mobile access occurs on a stationary computer that is either hard-wired to an internet connection or needs a Wi-Fi connection to operate. (Mobile apps often work on data plans through cellular connections, with no need for Wi-Fi sign in).
Mobile access is an efficient way to access accounting data. An accounting firm, for example, could use a mobile app that allows their clients to access data from anywhere and use it to inform their business decisions. There are security challenges to this type of access, of course, and financial professionals need the right policies in place to keep client data safe on mobile.
Intricate filing systems and reams of documents to sort through at tax time are quickly becoming a thing of the past. Keeping tax information in a basic spreadsheet is also being phased out thanks to more detailed, yet efficient, systems. Tax software that updates and syncs between devices, with a mobile application attached, is becoming more popular because it simplifies the way tax information is stored and reported.
Accounting firms also have access to convenient tax software – typically a better, more costly, version of what business owners purchase. Tax software should never replace the official guidance of licensed accounting professionals, though, especially when it comes to business tracking. However, it is a great tool for supplementing professional advice and can help business owners better understand their own tax liability.
Technology is making it easier for business owners to make financial decisions quickly and based on what is currently happening with revenue and consumer interest. Proper analytics tools makes this possible, from assessing website visits to seeing what type of engagement is occurring on social media. When businesses have a better handle on what is happening in the moment with their products and consumer base, they can make more savvy financial and operational decisions that don’t need to wait until the next reports are in.
Businesses still need an annual budget to follow, but should also have some flexibility to react to events that happen in their industry and marketplace. The right accounting firm can help set up a plan for this driver-based decision making and create it in such a way that it correlates with longer-term budgeting. The perfect setup involves long-term budgeting that allows room for some adjustments based on the demand.
The best way to tap into the latest accounting innovations in technology is to work with a firm that has access to the tools and experience using them. With the right tools and guidance, you can free up time, resources, and most importantly, money.
What technology do you use to run your business’ accounting operations?