Today, we live in a world powered by data, and firms are increasingly spending a lot of money on data entry services to turn disorganized data into organized and structured format. Data is available in different sizes and format that are from your customers, suppliers, partners, employees, or any other parties who are involved in the operations of your business and this makes data management very difficult. Any organization may find it challenging to draw conclusions with disorganized data.
A proper accounting system with accurate data is key to understand what is happening in your company, and helps businesses make the right decisions. Every accountant needs to pay attention to the consistency and volume of data entered into business applications, data entry programs, and spreadsheets. However, with the huge volumes of data flowing into the organization, the accounting sector often faces some data entry challenges.
- Significant Room for Error: Human mistakes are possible with any repetitious task. Unfortunately, manual data entry falls within this. These mistakes could be the result of unclear handwriting, faded receipts, lost paperwork, or a simple misspelling. Accounting experts are sought for their exceptional accuracy. A small error may cost businesses a significant client, thousands of dollars, or, they may even face legal issues depending on the severity of the error.
- Unable to deal with a surge in work: Repetitive tasks are a major setback when it comes to manually inputting data. For instance, accounting professionals who don’t use automation tools may suffer during the tax season. Small accounting teams will experience more pressure, which frequently leads to workplace discontent. More importantly, there will typically be a lot of manual data entry errors when there is a surge in activity.
- Time taken: Data entry takes up a considerable amount of time and even the most accurate accounting specialists are not exempted from this. It would require many hours to go through stacks of receipts, go through ledgers, and try to make sense of handwriting. This problem is not only a matter of time; it also prevents growth. As they are wasting time on tasks that don’t require any talent, educated employees are unable to put their knowledge to good use. If businesses entrusted these professionals with more challenging tasks, they could boost their earning potential.
All of these challenges lead to several errors in data entry such as duplications of data, error of omission, misuse of data and many more. All of these challenges and errors can lead to incorrect business strategy, increase in financial cost, missed opportunities and damaged reputation.
How to Overcome the Challenges with Automation
Automation in the form of robotic process automation (RPA) or artificial intelligence (AI), and Optical Character Recognition (OCR) can be used in accounting to minimize the errors and challenges in data entry. Data entry is a repetitive process that can be replicated by software robots, or “digital workforce.” These bots scan bills, receipts, and other papers automatically. Without manually entering customer data, robotic process automation is able to automatically update the client database. It allows documents to be processed more quickly and precisely. RPA has made it possible to enter data 20 times more quickly than manually.
So, here are some simple tips to overcome the challenges in data entry.
- Educate employees to enter data accurately: Ensure that staff members who enter expenses into your accounting system are familiar with the accounts and descriptions. Give a thorough explanation of your system. Utilize the employee training options that some software may provide. Establish company guidelines for documentation practices to ensure that entries are made correctly and precisely. For instance, to ensure that the statistics are accurate, record employee reimbursements that are given to them after they have submitted expense reports. Additionally, make sure that someone who is knowledgeable with accounting entries is available to respond to inquiries.
- Don’t overwork your staff: Employees who are overworked are more likely to make simple input mistakes than when they have enough time to complete the task. But it’s crucial that you keep up with your accounting and don’t fall behind. Think about ways to make data entry easier, better, and error-free, including using expense report software to quickly integrate data into your accounting system.
- Set internal controls: Set up procedures that can aid in identifying and fixing accounting problems. For instance, perform bank reconciliations every month to identify issues early and prevent them from remaining on your books. Credit card statements are the same. To guarantee that charges have been entered accurately into your accounting system, review them each month.
- Utilize the newest accounting software: Use the latest version of your accounting system. Software and cloud versions are continually being improved to simplify the entire accounting process. Cloud-based systems update automatically, desktop software requires a purchase every several years to stay up to date.
- Look for discrepancies between planned and actual spending: To keep your finances in order, use your accounting system. Your budget may indicate that a specific sum of money is to be spent on a specific item or activity, but the entry may not correspond to that amount. You can identify a misclassification by comparing your budgeted expenses to your actual expenses (or at least an explanation for the differences).
- Implement the best accounting procedures and guidelines: Keep your team from putting off tasks. Establish due dates for data entry and reconciliation so that mistakes can be easily identified and fixed. Recognize accounting standards and implement them into your accounting system. GAAP is the accounting standard used by privately held U.S. firms. This establishes the timing and format for reporting income and spending. These requirements must be reflected in your accounting system.
- Conduct a professional accounting review every so often: To ensure that your accounts accurately reflect the costs you incur and adhere to GAAP, you might want an accountant to check them on a regular basis. There might be a function in your accounting software that makes it easier for your accountant to review customer data.
Automation makes data entry easier and allows employees to focus on their core activities. Businesses can also outsource data entry to professionals who use the latest software such as OCR to ensure accurate data entry. Data entry companies enable businesses to manage their accounts efficiently and also helps maintain a good database of information. This is vital for businesses to make informed decisions and grow.
