Digitalisation in accounting is the cornerstone of modern productivity

The concepts of efficiency and productivity weren't invented by the younger generation of entrepreneurs and lecturers. In every serious accounting service, the questions of how to organize work processes optimally and how to guide the client through the month have always been addressed. However, many good practices – such as systematic archiving, labeling, Dofe and IFE folders, barcode usage, and much more – are now being replaced by digitalization and related systems.

Content Series on the Foundations of Productivity and Automation in Accounting

This article is also part of our content series on the Foundations of Productivity and Automation in Accounting. We'll be comprehensively addressing this topic at the free seminar. This seminar will cover all four basic aspects of productivity and automation in modern accounting services. To recap, these are 1) Adapting business processes, 2) Digitalizing business operations, 3) Conversions and imports, 4) Programs and systems.

We already covered the first point in the previous article about adapting business processes, which is also a prerequisite for a thoughtful transition to digital operations. In reality, this isn't a one-way path but an intertwined process that needs constant adjustment.

Foundations of Productivity and Automation in Accounting

Digitalization itself isn't anything new – it's gradually permeating all aspects of our business. While it began with programs for data entry into databases and bookkeeping, technology has now progressed to a point where understanding the concept of digitalization is crucial.

Firstly, the basic concepts – there are numerous terms relating to similar things: digitalization, digital transition, e-business, paperless operations, cloud solutions... Without delving too deeply into a technological debate – what they all have in common is using information and communication technology (ICT) for business operations and handling business events.

In the context of an accounting service, we could define 4 aspects of digitalization:

a) Document exchange,

b) Processing and storage,

c) From documents to data,

d) Usage, communication, and new tools.

Once again – by the way, this topic (and others in the series) will also be part of the FREE SEMINAR we're organizing in January.

Document Exchange

In accounting services, document exchange used to involve clients submitting more or less organized piles of documents. Over time, this has changed considerably, and today, clients deliver documentation in various ways – via email, through cloud storage platforms like Google Drive, One Drive, etc., as well as through specific modules and mailboxes within business and accounting software; then there are also electronic invoices (in the form of eSlogs). Of course, sometimes it's still simpler to deliver documents in classic paper form. There's nothing wrong with that either – this can also be "digitalized," and we're back on track. And precisely this scenario has multiple facets – nowadays, entrepreneurs often scan or even take pictures of documents with their phones... which often leads to inadequate quality...

Exchange also occurs in multiple directions – sometimes entrepreneurs need an invoice back, and we send it to them via email... FURS (Slovenian Tax Administration) often requires attachments and proofs, which we send and attach in electronic form in eTaxes.

From Documents to Data

In addition to receiving and exchanging, what happens to this documentation is also important. If a client sends us invoices by email, we probably won't print them and file them in folders. Appropriate systems need to be implemented here too – with a multitude of documents for multiple clients, chaos can quickly arise. Cybersecurity, data backups, proper handling of sensitive information (e.g., personal data, business secrets) also need to be considered. Electronic exchange and storage can also pose issues with authorization and liquidation – all of this needs to be appropriately planned when introducing such operations.

Processing and Storage

Another important point for understanding digitalization is that electronic replication (i.e., having a document displayed on a screen instead of a sheet of paper) doesn't equate to digitalization. The essence of digitalization also involves digitally processing data about business events documented in these documents. Data needs to be imported or exchanged in a way that everything necessary for posting is ready, and business events are processed and recorded more automatically. How to get there – this will be covered in the next article in the series on the foundations of efficiency and automation in accounting.

Usage, Communication, and New Tools

For a proper implementation of a new business approach (due to digitalization), it's certainly important to use appropriate tools – for exchange, processing, as well as communication regarding the documents themselves. This also means introducing significant innovations in information systems and solutions. Of course, it's also important that business processes are well designed and that people in the organization are consistent in implementing them.

In summary – digitalization is changing our way of working – from the beginning to the end of business processes. An immediate and direct consequence of digitalization is certainly the accessibility of documents and the speed of exchange. It's also important to move from digital replication to digital and automated processing of data about business events.

So, digitalization is an incredibly broad topic, and it will be covered more in the seminar taking place on January 11, 2023, at 5:00 PM in the Ljubljana ABC HUB (BTC).