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How Paper-based accounting is a Gamble: 7 Ways to Protect Yourself

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The paper-based or manual accounting systems date back to the starting of the commerce. They have been used for some years and most of the companies till date are using this paper-based accounting system. Many organizations out there waste their time because of the manual accounting system and this indeed is tedious.

If you are still using papers for managing the accounts, then you might have to think about shifting to the software. Here are seven ways to protect yourself and business from the efforts of managing the accounts on a paper.

Finding the Documents

When the documents are filed manually, there are high chances that you misfiled the document or there is a stack of files and you have to search for the files from that stack. Either way, it is very hard to get your hands on the document when there is a pile of other documents. Searching for them will take a lot of time and effort.

Getting the information that you need is going to take the time and you are stopped from doing some other better and bigger things.

Data Errors

It is a human tendency to make some small mistakes while they are doing work. When it comes to accounting one small mistake is enough to create a big issue. When a person is entering a set of details in written mode, he/she may commit some minor mistakes or sometimes their handwriting may also lead to some errors.

But when you use helpful accounting software, the data entry is done from a computer and this reduces the errors with handwriting. If you are meant to do double entries then you can the second time entry is done automatically.

Sharing of Documents

When working in an organization, there is a need to share the documents from one department to other and one person to another, in such situations one has to make so many copies to share them with the other people. This entire process is a waste of time as well as stationary.

There are some situations where people sit at their desks and wait for the approval form from another department or head office; such scenarios can be eliminated with the help of software. The software provides an option to share the files online with ease.

Less Security

When it comes to data of an organization, the security is very important. Every organization has some confidential documents and it is important to keep them safe. If the lockers are used, they will take up a lot of space and as the number of documents increases, it becomes hard for the company to invest in more lockers for the security of the documents.

There is a high risk of stealing, losing or damaging the documents but if the documents are virtual, they can be provided with required protection. Backing up the documents from time to time will keep them safe, the cloud-based software can be considered as a boon.

Knowledge of the Procedure

Among many one of the benefit of accounting software is that it can be used by anyone with minimal training but the same isn’t applicable to paper-based accounting. A bookkeeper who has specialized knowledge of accounting is required compulsorily. Hiring a bookkeeper is a heavy investment for any company and these costs can be decreased by investing in accounting software.  

The organizations can hire a freelance accountant whenever necessary rather than spending a fortune on the full-time accountant.

Loss of Physical Copies

The physical copies are hard to store. Just leaving them on a desk for a few minutes is enough to lose it. If there is only one physical copy of a document and it has been misplaced by a person then getting it back is very hard. If it is a confidential document, it will create more issues in the organization too.

Misplace, theft, fire or losing the document due to ignorance, there are so many reasons for the loss of physical documents. This will surely cost the organization a lot. But the situation is different from the digital documents, even if the system is corrupted by a virus, you can access the backed up data.

Waste of Time and Efforts

With a manual accounting system, everything is managed by a person. From calculating to filing the documents and managing the ledgers, an employee must take care of everything. All these things consume a lot of time and efforts of an employee and the organizations hire a special accountant to do this process.

But the situation is completely different from the accounting software. Once you enter the details, the software makes the calculations by itself. This way a good amount of time is saved and the files can be stored in various folders and it is easy to access the documents too.

Author Bio:

Hitendra Rathore is a Senior Editor at Hyper Drive Solutions. He has spent the majority of his career in the software industry gaining experiences in areas such as POS billing software and restaurant POS Software analysis. Outside of the office Hitendra enjoys spending time with his family and listening to music.

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