Many small business accounting departments still use manual data entry to input orders and inventory into spreadsheet programs or accounting software. But relying upon this technique is a detriment to financial health on several levels. In fact, lost data or incorrect data can cost businesses hundreds, thousands, or even millions of dollars in the long run.
For an accounts payable team with a lot of invoices, manually processing even up to 30% of these is an incredible amount of work that can drive up labor and processing costs. In fact, on just one invoice there can be dozens of data points that must be included in the system. That represents a lot of room for errors, missing info, and even typos that slow processing down the line and contribute to an increased risk of audits.
Here are just a few of the ways manual data entry can clog up the system with errors and contribute to increased costs:
- Labor costs to pay accounts payable personnel to manually enter data
- Accounting errors that can lead to poor reviews, loss of consumer trust, and low ratings
- Inventory discrepancies that lead to overselling — or underselling
- Risk of audits and tax consequences
- Inability to match deposits to merchant fees and sales numbers
- Inability to scale business
Of course, there are many other drawbacks to a manual data entry system for accounting, including slow turnaround and time management issues. Fortunately, modern technology has provided an easy and cost-effective way of reducing the need for manual data entry to eliminate risks and costs.
Document Management — Your Solution to Manual Data Entry
Investing in software solutions such as document management systems (DMS) can help your accounting firm quickly and easily process data for your clients with fewer errors. These systems can accurately identify and correct data inaccuracies to reduce or eliminate unnecessary expenses. Here’s how they work:
- Invoice Scanning and Data Capture Software
Invoice scanning software is an automated data entry solution that can help you accelerate the invoice cycle through the elimination of manual data entry. Most document management software come with optical character recognition (OCR) and intelligent character recognition (ICR) features that help to capture data. Some machine learning solutions can use tools like data mining to refine results and extend benefits. Tools that use AI can capture raw data and assign a meaning to each data point, classifying data to fill correct fields in just seconds.
- Data Processing
Next, automated workflows can be employed to properly route captured data to the correct department or personnel to streamline business processes. Cloud-based systems help to secure and preserve data for strict compliance with data privacy regulations such as Sarbanes-Oxley and others.
- Data Management
Finally, a robust DMS will give you the option to archive, edit, share, and track changes across invoices and data points for better auditing and compliance and faster retrieval of necessary data. This reduces the amount of time accountants spend searching for the data they need and further ensures the accuracy and viability of data through reporting and monitoring functions.
Blue Technologies — Document Management Software You Can Trust
Accountants have a lot of responsibility, whether they are working for a small business, a corporation, or an accounting firm. Compliance, data privacy regulations, and audits are a constant worry, particularly when manual data entry is involved. Human error is unavoidable, and manual data entry brings its fair share of risk to any accounting task.
At Blue Technologies, we work with leaders in the field of document management to bring you a series of tools and technologies that can help you reduce error and speed the accounting process. From creating invoices from scanned documents, archiving documents for easy retrieval, securing data for assured compliance, and reducing the errors inherent in a manual system, our DMS can help you greatly simplify the accounting process.
Stop relying on error-prone manual data entry. Contact a Blue Technologies consultant and learn how our document management systems can help you reduce risk, save money, and optimize your accounting business.