Four Ways Cloud-Based Accounting can Reduce Bookkeeping Errors

Bookkeeping errors can be costly for the business. However, depending on the volume of transactions, bookkeeping errors can be unavoidable. The larger the volume, the higher the possibility of errors. Automating accounting workflow can to a great extent remove the possibility of errors and improve the bookkeeping practice. While accounting automation can be done by on-premises accounting software, cloud based accounting software has been the trend as far as adoption goes. This article discusses the various ways an accounting software hosted in the cloud can minimize errors in bookkeeping.

Reconciliation

Think of the time when manual reconciliation would be done between the accounts at your office and that in the bank. Whenever a new transaction would take place – for example, a cheque – it would create a new challenge for manual reconciliation. So, you had to wait for a time to complete a certain amount of transactions to perform reconciliation. After that period, any related transaction would raise the possibility of errors. Automating transactions allow you to perform reconciliation at any time and any number of times you want. So, you not only perform reconciliations on demand but also cut out the possibility of errors.

Automating workflow

Think of creating multiple recurring invoices or payments recurring over the next two years manually. Every frequency you need to generate the invoice or multiple invoices for the customers or suppliers. That is a big task because you have to be absolutely correct with the setting up of the transaction documents. Automating transactions in this particular case can save you not only a lot of time but also a lot of effort and stress because the transactions will be done error free. All you need to do is enter the transaction values once and the accounting software will take care of the rest.

Generating reports

Accounting software allows you to find out errors, if any, when you generate reports and can review the figures. The figures can reveal if something is wrong with the transactions. For example, you set up products and their selling prices wrong. The reports can reveal what is wrong so you can go back and correct the errors in the interim.

Analytics

Analytics can also reveal manual errors committed inadvertently. Analytics, usually displayed as dashboard figures – graphs and charts – can be a good place to review your bookkeeping ways. If there are errors in the transactions, it will reveal in the analytics so you can again correct them in the interim.