Accounting is an important tool for corporate management. Organizational shortcomings are particularly impactful in this area.
All business transactions and operations are processed in accounting and should be handled as quickly as possible. For a company’s management, it is of great importance to have access to current figures, not least for liquidity reasons.
Incoming invoices, for example, must be checked and posted. Clear procedures should also be established in accounting for this. For travel expense reports, employees should follow clearly defined standards. However, these activities are often very time-consuming and prone to errors.
Administration costs time and money
For a study by American Express, 500 managing directors and employees of SMEs in Great Britain were surveyed. The result: SMEs in Great Britain lose an average of 11 hours per month managing their expenses. And 50% stated that expense management leads to significant frustration. Furthermore, managing directors assume that their employees lose approximately 300 British pounds per month due to manual errors and inefficiencies. While this study refers to the UK, the problem is certainly noticeable in Germany as well. A study by Sage already showed in 2019 that inefficient administrative processes cost the German economy billions.
Typical time sinks in accounting
Travel expense reports are also time-consuming to process for German companies. Furthermore, tax requirements are particularly complex. Employees often have questions that need clarification. Inefficiency can burden accounting not only in this area: There are numerous other time sinks. Here are some typical examples:
- Manual incoming invoice verification
- Searching for documents / Disorganization in filing
- Manual reconciliation of payment transactions (e.g., bank statement)
- Manual invoice dispatch
- Clarification of complex matters
Errors are human and do occur. However, if errors happen particularly in manual tasks, resolving them again costs time and money.
It is therefore all the more important for companies to ensure professional accounting. However, this is not always easy, as the shortage of skilled workers is also noticeable in accounting. Finding qualified employees is currently difficult – competition among employers is high. This also leads to high personnel costs.
Need to catch up with digitalization
Furthermore, in recent years, many companies have focused on ongoing crisis situations: the Corona pandemic, supply chain problems, the outbreak of the war in Ukraine, and the energy crisis – businesses tried to manage these issues in their daily operations. Consequently, digitalization processes often fell by the wayside. However, a ‘paper-based system’ makes accounting neither simpler nor more efficient. The use of modern technologies also ensures that many activities are hardly prone to errors. Accounting should not be neglected but professionally established. Qualified expertise is of great value in this regard.
Modern accounting as an external solution
By outsourcing accounting processes to specialized service partners, companies can focus their resources more effectively on their core business. Existing processes are optimized, which not only allows digitalization to gain momentum more effectively. Unnecessary steps in accounting, which only seemingly provide more security and quality but ultimately cost a lot of time and money, are identified. The result is lean, efficient target processes that support business strategies.
Only by being flexible and well-organized can companies meet the demands of modern accounting amidst growing cost pressure and scarce resources.
Good BPO partners in finance and accounting possess not only specialized know-how and capacities but also expertise in digitalization and process optimization. Furthermore, the outsourcing service provider ensures the long-term operational implementation of the tasks entrusted to them.
If you are interested in an outsourcing partnership, please do not hesitate to contact us! We look forward to hearing from you and will provide personal, non-binding advice.
Image source: Adobe Stock Photographer: Krakenimages.com
Author
Sylvia Meier
Guest Author
Sylvia Meier is a certified financial economist (FH) and has worked at the tax office, in consulting (Big Four firm), and for a specialized publisher. Today, as a freelance consultant, she supports companies and can demonstrate numerous publications, particularly on the topics of taxes, controlling, accounting, and finance.
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February 7, 2023
