How Accounts digitisation is bursting outsourcing myths
It is no doubt that the operations of the accounting firms in UK have witnessed consistent transformations on its journey through the information era. Right from the physical ledgers for tallying accounts to the tremendous digitisation that has been infused in accounting, there is a constant surge in its operational excellence.
This massive scale of digital evolution has been continuously reinventing itself to open doors to the infusion of outsourcing and Information Technology in all industries. Businesses have been reaping the benefits of digitisation and outsourcing for the past two decades to produce phenomenal operational excellence in their respective fields.
However there have been and there still is a resistance from the accounting ecosystem to accept accounting digitisation and adapt outsourcing a standard business practice. This has stunted the growth of the digital accounting landscape significantly.
This resistance can be attributed to lack of clarity of digital accounting systems and several myths surrounding the outsourcing of accounting services. One can understand as how digitisation of accounts is eliminating the reasons to believe various myths of outsourcing accounting services from the below paragraphs.
What is Accounting digitisation?
Accounting digitisation can be defined as the process of converting physical accounting records and documents from any physical form like ledgers, notebooks or a paper based system into an organized electronic format. In the earlier days of computing, spreadsheets were used to store, manipulate and retrieve accounting data.
Today there are multiple software, tools and web applications that are exclusively dedicated to accounting that include digitization, storing, retrieval, manipulation, organization, indexing and analysis of the accounting data. The capabilities of these tools would exponentially reduce the workload, errors and the execution time of the accounting tasks.
What are the accounting outsourcing myths?
The critics of outsourcing accounting tasks mainly cite data security to oppose outsourcing. Along with that there are other myths that are contributing to the resistance of the people who refrain from outsourcing. Some most believed myths are mentioned below.
Outsourcing is a cumbersome process
Small businesses cannot outsource
My data security will be compromised
I would need to invest extra on digital infrastructure for outsourcing
The idea of taking my business to cloud is intimidating
How does accounting digitization burst the outsourcing myths?
Digitisation of accounting and its associated tasks has been simplified by the accounting services providers by modularising and streamlining the tasks into efficient processes. Accounting and Bookkeeping services like transaction processing, bookkeeping, filing Self assesment tax returns /VAT returns, payroll processing have been restructured into simple workflows with the help of digitisation and the infusion of software/tools for an effective service delivery.
Let us see how accounting digitisation overcomes the myths of outsourcing below
Myth 1: My data security will be compromised
Accountants and accounting firms are provided access to client’s financial data with a great deal of trust. Hence this is a valid fear of any accountant considering the security of client’s financial data.
There is a good basis to this fear when dealing with accounting data which are physical in nature. The security measures of physical accounting data like ledgers, sheets and papers can be easily bypassed. But it is not possible in the case of digitised accounting data.
Accounting data that is digitised is bound by numerous data security protocols. Companies which deal with financial data are required to be certified with renowned Information Security Management Systems certifications and they are subjected to audits frequently. Also, these companies sign an NDA with the accountants or accounting firms to safeguard client’s data.
And hence, service provider companies give primary preference to data security and honour the confidentiality and integrity of the data they are entrusted with.
Myth 2: Outsourcing and digitisation are cumbersome and hinder business execution
Many accountants and accounting firms feel that digitisation is a difficult process that involve an extra effort in running the business. But digitisation of the physical records enables the data to be stored in an organised manner bound by security protocols and effective retrieval features.
This kind of data organisation would only help the accountants or firms in propelling forward rather than be a hindrance. What would actually be cumbersome is the huge pile of physical data sitting in the offices taking space and hosting termites.
Myth 3: Small businesses cannot outsource
Many accountants and accounting firms with a traditional approach for a long term feel that outsourcing is a costly affair and it is unnecessary. This myth arose as only big accounting firms with sizeable revenues and a large client base outsource. But on the contrary, accounting service providers have a wide array of services customised for the Tier 2 and Tier 3 accounting firms as well.
Due to digitisation, large chunks of financial data can be organised, retrieved and stored in a hassle free manner using accounting software and tools. These software and tools have paved way for these companies to redesign their services to suit the requirements of the small businesses at affordable costs.
Myth 4: I would need to invest extra on digital infrastructure for outsourcing
This is a traditional belief that existed in the 1970s where there were limited or no computers or digital machines to run the business. All accountants and the accounting firms in the 2010s are equipped with computers and faster internet connections which is all that is required for outsourcing. The service provider companies will possess all the required software, FTPs and tools to on-board the acceptors of outsourcing in a cost and time effective manner.
Myth 5: The idea of taking my business to cloud is intimidating
Incorporating cloud based services for businesses has been in execution for the past two decades. Today businesses are deploying them in full swing with the presence of high end cloud services. Many businesses are migrating from their private servers to run their business on cloud services like Amazon Web Services.
The data centres of these cloud service providers follow state of the art security protocols which ensure maximum security to the client’s financial data. Also a cloud based business model will ensure high levels of efficiency in business operations and moderate costs which eventually benefits the accountants and accounting firms.
We are living in the brightest phase of information era where any business can reap the benefits of digitisation and outsourcing to a maximum extent. This gives a competitive edge for the accounting firms and opens multiple windows of opportunities for them to expand their business.