Deploying electronics in accounting systems

17. august 2011

The development of IT technologies, the Internet and so-called cloud computing at the beginning of the 21st century has brought the possibility for virtual tours of offices that are usually thousands of kilometres distant. It makes possible the creation of big BPO (business process outsourcing) centres for remote provision of basic administrative work for large centralised companies, but also use of data and internal process sharing for small- and medium-sized companies.

The management of such a small company often also makes an effort within the framework of accounting and payroll processes to ensure the highest efficiency for the least cost. This can be attained either using their own accounting clerk or by outsourcing bookkeeping, or a combination of these two possibilities according to the size of the workload, technical requirements and the like. The management wants to be sure that the accounts are in order, but because of the higher cost, does not want to hire an external company to do the routine administration work at an hourly rate, which when converted to the salary of a specialist assistant is almost incomparable. An ideal variation is processing using the company’s own labour, whereby the expert only checks the "result" – whether there is no major error in the paperwork. This is made easy and accessible by technological development, deployment of electronics in accounting systems and sharing of administration processes.

In the modern day, there are no technological barriers to the interconnection of the accounting service provider’s office to the client or collaboration in the compilation of accounts on a single software platform (regardless of whether this is an accounting or sophisticated corporate ERP solution). This is no longer the luxury of only big companies. On the contrary, a suitable configuration will bring the greatest benefits for just medium- to smaller-scale companies.

If the company has considered efficient outsourcing of accounts, the standard situation repeats itself over and over again.

The invoice from the supplier first gets to the reception desk where it is entered on the list of received mail (in the best case scenario, into an excel spreadsheet, in the worst case, on a sheet of paper) and is subsequently sent on the "round" through the company, which includes formal and real approval and ends in the accounting office, where it is paid and posted in the accounts. This process may even take several days.

In the case of sharing administrative processes, the received invoice is scanned and entered directly into the accounting software. The responsible manager receives an e-mail containing a notice that he has an invoice in the system, which he must approve. After approval, an electronic payment document is generated, which the competent worker authorises for payment at the bank. In the meantime, the accounting firm also receives a message that a newly approved invoice is ready for approval in the system for posting. Without any need to re-enter any data, the accountant only posts it to the individual accounts and the story of the received invoice is thus closed.

Comparison of how time-consuming each process is

	Classic model		New model
	process	duration	process	duration
1)	receipt of invoice at reception desk, record of receipt, transfer to the competent manager	5 min	receipt of the invoice at the reception desk, scanning and input to the corporate system	5 min
2)	check and approval of the invoice by the manager and transfer for payment	1 min to several days or weeks depending on where the manager is at that moment	check and approval of the invoice in the accounting system by the manager	1 min
3)	payment of the invoice and transfer for entry into the accounts	5 min to several days or weeks depending on where the accounting office is located	payment of invoice – generation of payment order from the system	1 min
4)	posting and saving	3 min	posting and saving	1 min

The difference is obvious. Everyone that must come into contact with the invoice is involved in its processing (the reception desk enters it into record, the manager authorises, the accounting clerk enters it into the accounts). But nobody needs to enter the data several times in a row, copy the envelope, check the signatures and send the courier with the approved documents for entry into the accounts. Moreover, anybody that has authorised access to the software can always quickly search for the invoice because it is available in electronic format in the system.

Currently, many software programs are available that are capable of sharing accounting processes and distributing them between internal staff and external experts. The consulting companies that want to offer really efficient outsourcing of accounts and be competitive are already using them.

Ing. Roman Heřmánek

Accounting & Payroll Manager