6 Ways Digital Document Management Helps Your Finance Team Stay in Control
9th Dec 2019
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How finance and accounting documents are stored affects planning. When accounting documents are difficult to retrieve — or go missing — it creates problems in the event of an audit and restricts cost analyses and budget planning. Managing accounting documents effectively and then maintaining them according to legal and regulatory requirements is a priority for every finance department.
Using a digital document management system to store accounting documents helps accounting departments to develop better controls in these five ways:
Preparing for audits: A paper-based system generally means an ordeal for the accounting department as well as the auditor who has to plough through stacks of documents. A digital document management system for managing accounting documents ensures greater control over business information, and your finance department can respond quickly to auditor requests.
Creating audit trails: Accounting documents, data and financial information are highly confidential, so it’s important to be able to see who accessed what documents and when. Electronic audit trails put safeguards in place that protect both the company and employees. It ensures that there is a record of who accesses accounting and financial records, and helps to determine responsibility in the event of a confidentiality issue.
Automated workflows: A digital document management system affords the business the opportunity to make its critical accounts processes rules-based, with built-in approval and escalation points, thresholds and alerts. Document Logistix’ products enable finance teams to refine and update workflows dynamically as legislaton or circumstances change. The benefits of efficient, effective workflows are productive staff, consistent service, reduced error and compliant operations.
Enabling precise document retention: A paper-based system makes document retention an unwieldy and time-consuming process. Depending on the number and type of documents involved, a manual retention process is most likely to fail at critical times. However, a digital document management system makes it easy to store metadata so that you can specify retention periods by document type, such as invoices and financial statements. The system auto-purges out-of-date accounting documents, by deleting them or exporting them to an off-site archive.
Supporting detailed cost analysis: To conduct cost analysis, you often need to access information that’s outside your ERP platform. The details of payments are likely to be hidden in invoices and supporting documents, which makes detailed cost analysis difficult unless you have a document management system that is integrated your business systems.
Delivering accurate budget planning: When your company puts together a budget, you need access to information that’s deeper than your financial statements, in order to plan finances accurately. Financial statements show what was spent in a given year, but further analysis is required get behind the numbers. Digital document management provides transparency that allows executives to evaluate previous spending against prevailing conditions, to make informed decisions about whether to retain or change services.
The process used to store finance documents has a significant impact on the business’ ability to control critical information. By using a digital document management system documents can be retrieved instantly, which improves the outcome of audits, sustains rules-based workfloes, and increases the accuracy of budget planning and cost analyses.