While consumers have a slew of digital technologies to help manage nearly every aspect of their finances, businesses still depend on manual paper-based processes to perform the most basic business functions.
From payments to invoicing, many business owners still face the daunting task of doing everything by hand and keeping a clean audit trail.
But while technology has been slow to provide the tools necessary for businesses to make the digital transition, progress is well underway and its only a matter of time before paper becomes a thing of the past. Leading the way to more efficient paperless businesses are technologies like cloud accounting software, digital payments processors, web-based payroll solutions and accounts payable/receivable software.
The rise of digital payments processors like Square, Stripe and Braintree in recent years have been a godsend for businesses of all shapes and sizes, making it faster and easier for them to accept money from customers in exchange for goods and services.
Before the launch of Square, local merchants like food trucks, artists and coffee shops, had to default to only accepting cash to avoid incurring exorbitant credit card fees. In an increasingly cashless society, this meant often having to turn away customers. Now, thanks to these new platforms, small business owners can offer the same level of service as a larger business.
For online businesses, accepting credit cards is an absolute must, and prior to the arrival of services like Stripe and Braintree, this was no easy feat. Beyond the immediate and considerable technical challenges of building payments processing infrastructures into your app or Ecommerce store, there are also security issues to consider. Combined, those two obstacles are insurmountable for the average online startup. Thanks to todays payment processors, its as simple as adding a few lines of code into your application or website and paying a small monthly fee.
Technology is also advancing accounts payable/receivable, payroll and other business services such as accounting.
At the top of the list of technologies bringing innovation to financial management is accounts payable and receivable software. As any business owner knows, keeping your A/P and A/R in order is critical to maintaining a healthy operation. At the same time, however, manual processing takes too much time, wastes too much paper and can result in too many mistakes.
Given the importance of both cash flow management and a business owners time, such technologies are no-brainers and often play a central role in the way the business is managed. These tools streamline A/P and A/R processes like never before. Not only that, but they also keep documents backed up and organized; make it easier to collaborate across employees, vendors, customers and accountants; and integrate seamlessly with accounting software systems.
Payroll processing is another aspect to running a business that is being turned on its head by technology. With companies like ZenPayroll and Zenefits offering web-based services, business can rely on digital systems that make the process faster and easier than ever before.
Traditional methods for processing payroll are complicated, repetitive and all around prone to human error. In contrast, by making the move to a web-based payroll solution, many businesses can reduce mistakes, as well as cut down on accounting fees, all while freeing up resources that can be used to grow the business.
Cloud accounting technologies were among the first to disrupt traditional bookkeeping and are considered a staple for many businesses today.
Companies like Xero, QuickBooks and FreshBooks give businesses a simple, straightforward way to take their accounting practices digital, with tools for creating invoices, tracking sales and expenses as well as accessing critical business data.
Expect these technologies to continue to evolve as they integrate deeper with existing digital payments and banking systems to provide a true end-to-end solution for managing finances.
Rene Lacerte is the CEO and Founder of Bill.com.