By Analytix Editorial Team
When it comes to increasing efficiency in accounting, technology-driven audits have an advantage in the way they provide deeper insights into the data gathered. According to studies conducted by KPMG where controllers were surveyed, more than 70% of the total number interviewed felt that technology-driven audits provide insights that allow them to conduct a comparative analysis of company performances across their industries.
What Is a Financial Audit?
A financial audit is typically when a third-party examines the financial records, including various reports of an organization, to check for compliance. This may be for tax purposes or for other reasons, including the sale or purchase of a business.
Reliability of the data, as well as its accuracy, are checked during audits; thus making audits an event that is often approached with caution and some amount of trepidation.
However, it need not be so.
Technology Driven Financial Reporting
Technology is now driving businesses at almost every step, from client interaction to essentials such as accounting and bookkeeping. Digital finance is fast becoming the way payments are being made, and not just for e-commerce payment gateways, but also for essential functions such as tracking financial records for both expenses and sales.
Unlike manual report-writing and record-keeping, technology-driven reporting is more accurate and reliable.
Further, it is a myth that technology driven operations and reporting are meant only for the big businesses. A small and growing business needs it as much as an established business. Digital finance adds an element of convenience and reliability to financial transactions, thus making it essential for businesses of all sizes, including those that are growing fast.
Here are some clear benefits to implementing digital finance in a business:
Establishing a Clear Financial Trail
Programmed software allows businesses to track numbers automatically. Records are maintained; and receipts and invoices are tracked and stored, regardless of the transaction’s size. This creates a history that later assists in audits. In contrast, receipts and invoices may go missing in manual record keeping, creating gaps in the financial history.
Easing Out Collections
For growing businesses, it is easy to lose track of collections. Money owed, especially if the amounts are small, can quickly slip into the background, as larger transactions take precedence, consuming more attention and time. However, when added up, even smaller collections yield significant monetary amounts of money that can be then put to better use.
When utilized well, software also aids in collections by issuing reminders of amounts due, as well as facilitating payment through instruments like credit cards.
Building a Better Business Credit
Good credit history is established over time, with the aid of reliable financial reporting. If a business invests in technology-driven accounting and bookkeeping, this facilitates more reliable reporting through simple but critical actions such as ensuring payments are made on time, thus effectively managing debt without allowing it to become overdue at any point.
Business credit is also built through better regulatory compliance, again aided greatly through implementing technology-driven accounting and bookkeeping practices.
Orderly finances, consistent reporting, accurate data, and access to real-time information are some additional ways in which a technology-driven financial system works. Each of these in turn assists in financial audits by creating a more reliable environment that which saves time for everyone involved.
One of the side-benefits of having streamlined operations is that owners can eventually focus on business growth and expansion.
If you are a small business owner and you have not yet invested in technology-driven options, reach out to professionals who can help your business. At Analytix Solutions, we work closely with clients to customize technology to their business needs. Call us at 781.503.9002 or email us [email protected] to learn more about how our scalable solutions could help you and your business.