Currently, India has roughly 700 million internet users across the country. However, despite the huge number, the digital adaptation by small businesses is very less.
While the big businesses are entirely dependent upon accounting software, those in the MSME sector still do their accounting on paper.
Most MSMEs are still unstructured and hire accountants for their daily entries. To be more organized, small businesses need to adopt modern and faster techniques of accounting. To this end, many mobile apps have been designed to make it easier for MSMEs to go digital in their bookkeeping. Digital accounting methods have numerous benefits such as:
1. A Rationalized System
Manual accounting has the disadvantage of having it difficult to store the information in one place. There is a need to store information in several places in a manual accounting system. Jotting down the statistics and organizing the books may not be a challenge but assembling information and using it for the formation of a report or a summary will be tiresome.
Even though the manual accounting system is designed in a handy manner, managing the data and assuring that everything falls perfectly into place is quite a task to be performed. Evaluating the information in the trial balance may seem like a relatively effortless task on paper. However, in reality, the strenuous work that goes behind it is energy-sapping.
Adopting a digital accounting system, which collects information in a specific area, making work easier and providing owners with a real-time access to essential details and information, is of great significance. A digital accounting system will smoothly drive the workload as critical financial data, from cash flow to balance sheets, will be accessible within a few clicks.
2. Easy to Use
One of the pressing reasons to switch to technology is because it’s easy to use. The digital accounting software applications are simple to use and deliver results with convenience and comfort. The prime motive of recording all accounting data is to keep a record of all the transactions on a monthly or yearly basis and also to examine the data and the numbers assembled to make business decisions. An individual might take more than an hour to prepare a cash flow and gather data and the linked costs may take abundant time for a business. Therefore, a digital accounting format gives you the comfort of administering all kinds of financial tests on the easily available data and creating a flow of cash within a few minutes.
3. Efficiency and Productivity
Mobile apps enable increased efficiency and productivity. If bookkeeping is done using a dedicated mobile app, then the company will have ample staff available to focus on other essential tasks. Digital accounting systems save a lot of time in processing online transactions as they permit accounting departments to create reports and assemble facts and figures in a fraction of minutes. Moreover, the improved efficiency and productivity may also assist in reducing the cost of the business as manual tasks are now completely automated.
4. Increased Data Security
With a paper-based filing system in the company, there is a possibility of documents and other critical information to get misplaced or even be robbed by someone. This will take away the enterprise’s years of hard work and accounting data in just a flash. In order to stay protected from such mishappenings, MSMEs need to shift to a paperless system of storing data. Digital accounting can secure data safely in a server by providing a backup facility. One can easily obtain data through a cloud system even if things go wrong.
5. Cost-effective
Operating digital accounting software will help businesses and companies save money by minimizing the cost of services. Recording data digitally is economical, works faster and saves time as well. Appointing someone to handle the accounts of a company can be costly as a professional will charge the company more. The cost depends upon the scale and nature of the work. But a digital accounting service may only cost the installation charge as its sole cost.
Summing It Up
Given the current scenario, the MSMEs must move from paper bookkeeping to mobile apps that are purely designed to ease their workload, make them more organized and bring in efficiency.
Source: Business World
