Freedom from Stagnation – the right time to move on from manual books
In this age of digitization, the adoption of technology by businesses - big or small - has indeed been remarkable. Even the smallest of establishments have turned towards technology, either because of the GST trigger, or to clean up their billing processes or to possibly enter the world of e-commerce. In slow, but steady paces, businesses across India are realising the value of automating their businesses.
Unfortunately, a fair section of small businesses suffer from stagnancy - either because they continue to use manual books, when clearly their business model demands automated systems; or because they take the call to automate sooner than is actually conducive for their business. Somewhere, it is important for all business owners to take an informed call on ‘when to automate’, and that should come after measuring the costs and efforts of automation, versus the obvious advantages of automation - which are many indeed.
One of the key differences between manual and automated systems is speed. Automation not only helps to process business data faster, but also allows faster data entry and reporting. Add to that the boon of accuracy and you have a strong case for automation. Traditional manual accounting is a tedious process requiring accountants to spend copious amounts of time mathematically checking numbers in the company’s accounting information. Simple mistakes such as transposing numbers or entering information into the incorrect column could create significant errors - which can be eliminated via automation. Because of its efficiency and ease of use, computerized systems also allow you to improve inventory control and payment collection, saving time and improving cash flow. As a business owner, one can potentially spend less time looking for errors and more time analysing information for decision purposes. The plethora of reports a business owner has access to while using automated systems - stock valuation, profit and loss, receivables and payables, return on investment - is surely a game changer, which of course will depend on the size of the business.
Another key aspect, which most business owners will need to appreciate, is the importance of integration. Accounting, inventory, compliance are not isolated activities, but are inter-linked with each other, having implications across the businesses. For instance, while accounting, a single transaction is bound to affect your financial records, your stock, as well as your taxes. This indeed becomes a challenge in manual wherein, the same transaction may need to be recorded at multiple places to ensure that all relevant ledgers are affected, whereas in computerized systems, the same can be achieved by the click of a button. Given the volume of commerce any business aspires for, manual books may not make sense, unless one is a very small establishment, with probably limited items and limited parties.
Last but not the least, compliance under GST is something, which can be best handled by automating your systems. Early prevention, quick detection and hassle-free correction of errors, is why automation will surely score over manual any day, especially in the era of GST, which demands a fair level of compliance supported by the right technology. Equally important are the ever-growing concerns surrounding data security and data storage - and it goes without saying that a business using manual systems will obviously find it very difficult to maintain historical business data over the years in bulky books, and also to recover data in case of any mishap or breach of trust within the organisation.
Thus, while it is safe to conclude that automation has many benefits in contrast to manual books, every business will need to take an informed call on the same - considering costs, time and efforts. Also, in case someone does choose automation, it needs to be embraced across all aspects of business - accounting, inventory, compliance, banking and much more, as maintaining separate systems for separate process will be a cumbersome task. At the end of the day, manual or computerized, businesses will ned to walk towards a system which guarantees freedom from stagnation, freeing up time for a business to focus on growth, efficiencies and velocity of commerce.
Executive Director, Tally Solutions Pvt Ltd