What You Should Know About Real Time Accounting
There is nothing worse than having to make decisions in business with incorrect or outdated information. Businesses spend billions acquiring information from external sources – be it trade data, market information or consumer preferences etc. With such a focus on external data streams however, companies can lose sight of internal information avenues, thereby adversely affecting management decision-making.
Internal information however, does not just have to consist of inventory levels or revenues, it includes all data points required to make decisive and accurate business decisions in real time, an aspect that can sometimes get overlooked. New technological developments and the rapidly increasing pace of business however can now redress the balance.
Real-time accounting for real-time decision-making
The balance sheet is supposed to be a snapshot in time. However, this does not necessarily mean this snapshot should be taken only at a quarterly or annual frequency. Cloud computing allows even a widespread organisation to maintain a real-time picture of all cash flow, P&L and balance sheet items enabling management to make informed decisions on real-time information.
Real-time accounting can also assist in other ways. One primary application is in the rapid detection and even prevention of fraud by real-time monitoring. Some organisations go a step further and deploy AI algorithms to automatically scan the information in real-time and flag any suspicious entries or transactions. By catching fraud or other mistakes quickly, the impact can be contained and minimised.
Finally, having a real-time picture of assets and liabilities helps to optimise cash flow management and increases operational and financial effectiveness.
It’s easier than ever!
What is making real-time accounting ever popular is how easy it has become to implement. Previously, the best a business could do was to maintain a server to which all staff regularly upload their data. However, this is a cumbersome process, especially for smaller organisations.
Enter the cloud computing solution. There are now dozens of web-based, real time budgeting planning and reporting platforms that stay updated 24/7 producing their entire arsenal of pre-formatted reports in real time. You can have half a dozen pie charts showing various statistics and figures updated up to 10.55 AM for a meeting at 11 AM!
There are many other additional benefits of using a cloud-based system:
- Infinite scalability – there is no need to ever upgrade servers or bandwidth
- Any software upgrades are deployed automatically and become available instantly (say goodbye to Office 2010!)
- It almost always costs considerably less than compared with other alternatives
- The systems are usually more intuitive and easy to use. And because the developers take feedback from thousands of customers, the tools keep getting better and better
With each passing year, business technology becomes faster and faster. Product cycles which used to last for decades, can now ebb and flow in a matter of months. The fortunes of companies can change within a matter of weeks as new competitors spring up from anywhere in the world without warning. In such a competitive business environment where information decays at a faster rate than ever, real time accounting is the smart choice for the business that wants to remain agile.
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Similar posts: The Secret to Data Analytics and Audit Quality, Cognitive Analytics – A Revolution in Planning, Budgeting and Forecasting, Fintech: Three Killer Ways to Use Technology to Make Finance Simpler, Easier, Faster and Safer.
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