The 2019 Covid-19 outbreak shifted business models online extensively. Remote work became the norm and it was no longer feasible for accountants to travel to and fro and maintain records. The operational costs associated with ERP systems became a hazard in the then-stagnant economy. Moreover, the pandemic compelled enterprises to move beyond ERPs and maintaining spreadsheets.
Automation is the new buzzword in the world of crunching numbers. The Accounts Payable Automation Market Outlook Report (2022-2023) states that the global accounts payable automation market size was valued at US$ 2.3 Billion in 2021 and is understood to balloon up to US$ 6.7 Billion in 2022, growing at a compound annual growth rate of 10%. Reports suggest that it might have a valuation of US$ 2.6 Billion by 2032.
Today, when most businesses are looking to optimize costs and choose what is best for themselves, it is time to reevaluate your financial cycles. This article briefly discusses the ways in which replacing ERP systems can save costs in accounting processes.
Problems Arising Due to ERP Systems
According to a 2020 Survey of CFOs by Grant Thornton, almost 90% of finance operations will be automated. Whether your business needs an ERP system or an efficient process to streamline financial processes depends on its number of employees, the number of users accessing the system on a daily basis, and its ability to handle its costs. While large corporations feel the effects of switching to an ERP system within seven to eight months, small to mid-range businesses need at least a year to tell the difference.
The massive costs incurred in the installation, implementation, and maintenance of an ERP system are effective deterrents keeping small businesses from adopting this solution. Artificial intelligence robots use advanced computerized mathematical capabilities to prepare balance sheets and ease data entry. In Guangdong, China, a taxation robot takes care of the financial processes of big companies. However, small businesses cannot adopt processes that require such hefty fees and personnel costs.
Automated Accounting- The Future
According to the Workato 2022 Report, 26% of an organization's automation, on average, falls under finance. General accounting automation processes grew by 188% YoY. With the 2019 Covid-19 outbreak pushing businesses to evaluate their financial costs, automating returns and refunds grew exponentially by 335% YoY. Automation of financial processes has had a direct impact on customer satisfaction, in turn contributing to a business's overall revenue. Employees spent less time manually processing returns and customers received their goods faster. Also, it has been noted that 2 in 5 finance professionals automate and run their own processes with no third-party vendor or IT professional’s help. This is largely due to the low code and easy-to-use automation interfaces that have emerged in recent years.
Automation is Efficient and Secure
Cybersecurity is one of the biggest concerns of traditional accounting software and some ERPs. The accounting processes and audit reports are at high risk of being stolen or infiltrated. Another issue that affects customer relationships is man-made errors in accounting. Automated accounting saves the day by eliminating human errors due to fatigue and naturally completes the process much faster.
Automating these processes also enable finance experts to focus their attention on updating accounts, entering data, and processing standardized mathematical analyses. The flawless tracking processes in automation tools allow professionals to look at revenue and spending data in real time, thus influencing buying decisions.
Risks Associated with Considering ERP Alternatives
Blockchain, Artificial Intelligence (AI), and cloud ERPs are feasible alternatives to the traditional ERP system. But, the high costs of buying and maintaining such robust ERP alternatives may reduce revenue streams. Besides the installation bit, most such solutions also require other overhead costs. It is only natural that small to mid-range companies would hesitate in switching to ERP alternatives for their accounting automation.
ERP Alternatives: New-Age Solutions
A concern that often comes up when discussing automated accounting processes is replacing humans with robots will affect employment. However, technology has not yet advanced such that computers can analyze detailed financial reports and take sustainable buying decisions.
Saeed Taha in his 2021 paper “The Impact of Automation in the Accounting Industry” advises businesses to train accounting professionals and create awareness regarding the advantages of computerized financial analysis, how it helps in making prompt buying decisions, and also how it has the capacity to combine and analyze operational, market, and financial data.
ERP systems are not an all-in-one solution. They help large MNCs track their projects, and process real-time data in bulk. But, they cannot customize every niche requirement of a company. Tracy Newman of Bean Ninjas also reiterates that one must keep the overhead costs in mind when choosing an ERP system. Easy-to-handle automation software helps small to mid-range business owners keep track of owner payments and fosters a clear understanding of the taxation procedures.
The Dark Horse- Osfin.ai
Wondering how you can cut back ERP implementation costs and still use technology to streamline your accounting processes? This is where Osfin.ai comes in. We are a modern accounting platform to help you close finances efficiently and swiftly. At no major overhead costs with an easy-to-handle interface, we reconcile millions of data entries, augment your Finops workforce with AI-powered automated document processing, and completely automate payouts.
We have a client base spread across various sectors including fintech, e-commerce, ed-tech, travel, gaming, and logistics. Some of the giants from our domain like Manipal Cigna have provided glorious reviews in praise of our accounting support. So, tackle your financial woes with us to ensure hassle-free accounting.