As we continue our small business accounting evolution towards a “collaborative” model (see prior blog posts), there is significant improvements being made to the accounting process and how information gets into the accounting system. Historically, we simply had people enter the information. There is significant progress being made on re-engineering and integrating the accounting processes to eliminate (or at least significantly lessen) this data entry function.
It is becoming clear that we will get to “zero data entry” by using the power of the Internet to connect banking feeds, customer-entered data, vendor-entered data, and employee-entered data into a system, so the accountant no longer enters data but instead manages the flow of transactions through the system. The accountants role will become even more important in this new environment. The role of the accountant will focus more on how to manage transactions and other “data flows”. This will allow us, as the accountants, to regain control of the general ledger while increasing the quality of the financial records, creating significant cost savings and providing real-time advice.
There has already been significant advancements on this front. Most accounting systems (i.e. QuickBooks, Peachtree, Intacct, etc.) provide integration to bank and credit card feeds, Bill.com provides automated accounts receivable and accounts payable functions that integrate to the accounting application, Smart Vault provides integrated document management to the accounting system and the list goes on.
There is a relatively new player in the US market which is worth watching. Xero is a full online accounting system that connects to major banks and pulls bank transaction data directly into the application. Xero also has online invoicing, payables, fixed assets, employee expense management, and nearly all of the functions that most small businesses need from their accounting system. This is a true “collaborative” model with the accountant and small business owners managing their accounting data in real-time.
If you have not begun making the shift to a “collaborative” accoutning model, now is the time. There are significant advantages that can be obtained from this move. If you want to learn more about “collaborative” accounting models and how they can help your business, please do not hesitate to contact us.