How to streamline month-end close processes with digital payments
The end of the month can be a stressful time for your financial team. Between calculating employee wages, paying bills, and balancing budgets, there is a lot of financial data to keep track of. And unfortunately, due to human error, that data can easily be lost. But all of that can be avoided with digitized month-end accounting.
Let’s take a look at five ways digital payments can streamline your month-end close process and improve your clients’ experience.
Records Are Already Digitized
Nowadays, it’s commonplace to have financial records digitized, so you may think this point is nothing special. But, it is not commonplace to have those records created and managed digitally at all times.
Digital records are often derived from data entry. For example, your finance team gets your receipts or invoices, crunches the numbers, and manually inputs essential data (like amounts due) into a system, thereby creating the digital record.
Fully digital payments offer a slightly different process. Instead of manually inputting that information at the end of every month, everything is already digitized from the start. That means no more wasting time inputting information, and you decrease the chance of incorrect information caused by human error. And when time and accuracy are of the essence during month-end accounting, your accounting team will be grateful for software that streamlines—or bypasses—data entry.
Payments Are Faster
Adopting digital payments allows companies to send out invoices and receive payments much faster than analog options allow. One study estimates that by 2025, transaction volumes will increase by over 80 percent thanks to the speed at which transactions can be processed.
This advantage relates to the first benefit we discussed. Since invoices are automatically processed into a digital format, these invoices can be sent out much faster. As a result, you can receive your payments with great speed.
Certain digital payment technologies will also alert your customers to overdue payments. For example, let’s say a client’s payment is six days past due. Your system can quickly alert them of the missed payment instead of letting those payments slip through the cracks for too long, ensuring you receive your payments as soon as possible—and without creating extra work for your team.
Transactions Connect to Accounting Software More Easily
It’s always easier to do things from a single location. When you use a digital payments platform (along with other digital automation in your finance strategy), you have the ability to control and monitor all transaction and finance processes in a single place.
If you use financial control/accounting software to manage your finances—like NetSuite or Sage Intacct—digital payments let you integrate your transactions into those systems with ease. So, while your accounting team uses that software to manage the rest of your general financial information, they can also quickly access data about your transactions.
Data Is Secure, Traceable, and Transparent
Accepting cash or check payments can make your month-end account prone to error. This goes back to the issue of manual data entry—any time your teams manually insert financial information from physical monetary assets, mistakes are more likely to happen. Additionally, physical payments can be lost (while it’s rare, it does happen).
Digital payments help you know, monitor, understand, and adjust the cash flow of your financial system. Rich data accompanies every transaction, so you have an extensive report on the source of your clients’ purchasing history. This, in turn, allows your business to develop trust with clients and intuition within your own system.
These transactions are traceable by both you and your client. Each business can see the rich data associated with a transaction, which can lead to a more satisfactory and trusted business relationship.
More Opportunities for Automation
The benefits we’ve discussed so far only scratch the surface of what digital payments can do for your business. With the right technology, digital payments can help you automate even more processes, including:
- Cost management
- Security compliance
- Tax compliance
How Can You Access These Benefits?
Now, these benefits are great to be aware of, but how can you actually implement digital payments to access these advantages? Fortunately for you, we’ve already prepared the answer.
Paystand’s eBook on how to streamline the month-end close process goes in-depth on the five most important month-end tasks, including accounts payable, accounts receivable, and tax compliance. We address the benefit of automating those tasks and even link you to software solutions that can help you implement that automation.
Download How to Make Month-End Accounting Stress-Free with Automation today to start putting digital payment advantages to work in your business.