Preparing financial statements often takes an unnecessarily long time
The first quarter of the new year is fast approaching. For many accounting firms, these are often the busiest months of the year. The firms must once again prepare financial statements for many organizations (including related documents!). This also involves a thorough audit of the financial statements, which must be signed and approved by the client. For many accounting firms, this process is largely manual and labor-intensive. How can this process be made more efficient?
Increase in the Number of Accounting Firms
Before I address the question of how accounting firms can take a smarter approach to preparing financial statements, I’d like to share some figures with you first. After all, aside from the practical considerations, why should you digitize your financial statements?
Margins… Research (“Key Figures 2015”) by ABN Amro, Novak, and Full Finance shows that the number of accounting firms in the Netherlands is growing. Although there are more acquisitions and mergers taking place than a few years ago, about 100 new branches were added in 2015: from 2,800 to 2,900. Many (particularly larger) accounting firms are seeing their revenue decline due to lower margins on their services (source). As an accounting firm, can you prepare financial statements more quickly through a more efficient process? If so, you’ll save on labor time, allowing you to offer better prices or increase your margins. If so, watch the recording of my webinar “Preparing Financial Statements Faster,” which I presented on January 20 (duration: 17 min).
The manual process
Many accountants don’t realize just how many steps, people, and how much time are involved in preparing financial statements. Often, an assistant accountant prepares the (draft) financial statements in a primary application, such as Unit4 or Caseware. Several documents may be attached to these financial statements, such as the corporate income tax return or a business letter. These documents often come from a CRM application such as Allure or Radar. The documents are then neatly printed and checked by the administrative office for, among other things, corporate branding, consistency in formatting, and page numbering. These documents are often printed and checked several more times before they can be compiled into a complete bound volume.
Once all documents have been verified as correct, the administrative office prints the entire document on letterhead. This allows the accountant to review the document and make any necessary adjustments. The accountant then signs the document. The administrative office scans the financial statements and either emails them to the client or uploads the document to a client portal.
I don't need to tell you that preparing financial statements this way is a very labor-intensive process. The documents are printed and reviewed multiple times, and on top of that, many of them end up in the recycling bin.
Go Digital!
The entire process involved in preparing financial statements can be fully digitized. Of course, the content of the financial statements will still need to be entered into the primary application. However, once the financial statements are ready for audit, a document output management solution can automatically format the document, attach additional documents (such as a business letter or the corporate income tax return), and initiate a workflow for the accountant to approve the financial statements. After approval, a signature will be added; this can even be a certified signature in accordance with PKI certification. The financial statements and related documents are then (depending on the client or the process) sent via email, made available in a portal, or printed. Additionally, the original will be automatically prepared for use in, for example, a digital archiving system, a file explorer structure, or a CRM application. Digitization thus makes preparing financial statements much faster, as many steps in the process can be shortened or eliminated.