All businesses, regardless of size, have benefited from technology becoming very user friendly and affordable. Business has become global and digital. Gone are the days of having to be in the same location to work together, attend meetings and use the same documents. Over the past decade the transformation of software platforms has changed the way business is conducted daily. Small businesses have benefited greatly, but too many are lagging. Reasons used are “we are too small” or “what we do has been working fine for years”. Generally, most of us are resistant to change. To survive we cannot remain complacent. You can be on the platform and either jump on the technology train or stay behind. True, we should not fix things that are not broken. Things do not need to be broken to be improved upon. Change is hard but in the end most times we don’t know how we survived before changing. I think of when I purchased my first car that had a backup camera. Before I had one I had no idea how helpful it is and now I wonder how I survived without one.
The number of small businesses that still use manual checks is staggering. There are so many faster, cheaper and more secure ways to pay vendors and employees. The true cost of using paper checks is not only the cost of the stamp. Someone must write the check, process the check for mailing and record the item in the accounting software. Checks can get lost in the mail and must be voided and reissued. The true cost per paper check issued ranges between $5 to $20. For a business that writes 500 checks per year that is $2,500 to $10,000 spent on paying bills and employees annually. Many still prepare deposits and make a trip to the bank several times a week. There are also small businesses owners that will pay their accounting firm to enter their manual checks into a software program to have their income taxes or financial statements prepared. Data entry after the fact does not provide an owner with any current financial information and is an unnecessary cost. The benefit of this data is greatly diminished as it may not be relevant to the current situation. With free mobile deposit, desktop scanners and BillPay services readily available, these costs can be greatly reduced. Accounting software platforms can be set up to download data from the bank and credit card accounts to enable timely reconciliations. This eliminates the need to wait until month end to reconcile accounts.
When I launched Platinum CFO my goal was to provide expert outsourced accounting and CFO services in the most efficient and inexpensive way possible. Prior to launch I researched and tested many programs and solutions to determine what would be the best fit for my clients. We have helped many migrate from manual accounting to cloud technologies. The result is more timely, accurate and less expensive financial information. The goal for business owners is to have current and reliable information to make informed decisions. It is impossible to develop a strategy forward without knowing where you are now.