How you store your accounting documents seriously affects your ability to plan ahead. When accounting documents go missing or retrieval is difficult, it creates serious issues during any future audit and limits your ability to create detailed cost reports and plan budgets. Competently managing accounting documents and then preserving them to meet regulatory and legal requirements should be a key priority for every finance department.
Using document management software to store accounting documents assists accounting departments to improve control in the following ways:
Supporting Detailed Cost Analysis
When your business is conducting a cost analysis, you may usually need to access information outside your ERP (Enterprise Resource Planning) platform. Records of payments can sometimes be hidden deeper in actual invoices and other documents. Integrating a document management system with an ERP system allows users to drill deeper and find those hidden documents detailing costs.
Allowing Precise Document Retention
A paper-based filing system makes document retention a time-consuming and cumbersome process. You assess the age of each file and arrange it by date manually, then dispose of the files based on a schedule. However, with a document management system, document information such as an invoice date and storage date are captured automatically in your document database. This information makes it easy to identify those documents that can be disposed.
Preparing for Audits
During an audit, a paper-based filing system can pose a number of challenges for the accounting department and also the auditor. For example, the auditor might want to see all the invoices you generated from 2009. All of a sudden you can find yourself in the midst of a mountain of files and papers. Improving the control and maintenance of your business information is key. With document management software your accounting department can be better prepared and able to respond quickly to auditor requests.
Creating Audit Trails
Accounting data, documents and financial records are highly confidential, and it is important to be able to identify who accesses these documents, how and when. This is important for all companies, especially those that are publicly-traded. In order to comply with various accounting laws and protection acts, it is essential companies are able to audit the life-cycle of an electronic document and understand how it has been accessed, by who and when. This is made possible with document management software. Electronic audit trails protect your company and employees by providing information with details of who is accessing this financial and accounting information. This is of particular importance in cases such as breach of confidentiality or fraud allegation.
Ultimately, the processes you use to store accounting documents has a significant impact on your ability to control critical business information. A document management solution will allow you to find, review these documents easily and offer additional business security.