From Pritt Sticks and Excel to digital accounting

Future of Finance

I’ve been working for Pleo for about five months now and I’m honestly shocked to see how many companies still collect paper receipts and quite literally glue together their expense reports.

Pritt Sticks, staplers and printed forms

“I’m pretty sure these are exceptions”, I was thinking to myself, when CFOs kept explaining to me how their employees glue paper receipts to a printed form, only to fill it in and sign it by hand (sometimes even adding a stamp).

Little did I know that these were not actually exceptions.

Instead, it was a perfect description of the status quo of ‘modern bookkeeping’. In many cases, the external bookkeeper receives these receipts by post. For me, this is an extremely old school and incredibly time-consuming process. Hours are spent on making sure receipts end up on the bookkeeper’s table, categorising and matching receipts with respective items on credit card bills, and entering the data into the accounting system. Every. Single. Expense. It still leave me speechless.

"We’ve always done it this way!"

"Can I ask why a forward-thinking company like yours is handling these processes in such an old school way?", I want to know. The answer takes some time, but certainly doesn't lack conviction: "Well.. because we’ve always done it this way!" This is usually followed by a short conversation around how well these processes work, how they have proven to be efficient over decades, and that there is currently no room for improvement. "Interesting!" I answer. "Have you ever thought about digitising these processes?" I (truthfully) add that they cannot only save on workload, time and money, but also gain real-time overview and transparency over their company spending. A second of silence. Eventually, the typical replies range from “not desired by the board” to "not a priority right now"... and sometimes: "We want our employees to pay out of pocket to ensure that they hand in their receipts." I have to admit, these sound like excuses to me. I want to dig deeper. What are the real reasons here? Resistance to change? Is finance a delicate subject when it comes to new tools? Is management known for generally turning down new ideas?

A light at the end of the tunnel?

We might experience some tension in sales calls, but the wide reality is that businesses are ready and willing to go digital. In a recent global report from ACCA, 89% of the surveyed respondents considered digital skills to be relevant or very relevant to the accountancy and finance profession. Meanwhile, 63% of respondents in the same study claimed that they had enough digital skills to perform their role.

This indicates a slip between the need vs. the adoption.

Perhaps there’s an overarching fear that people are falling behind the digital curve, due to poor adoption of new accounting software that is overcomplicated or poorly designed – or both.

Swamped finance manager

Rethinking and embracing digital accounting

So. Let’s rephrase the question: "Have you ever thought about implementing a tool to digitise company spending?"

  1. Do you want to gain transparency and real time data around company spending?

  2. Do you want to optimise processes and minimise manual workload?

  3. Do you want to save time and cost in preparatory bookkeeping?

And, how do you achieve all these things and more? Yup, you've guessed it: By implementing a tool to digitise company spending. 

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Looking ahead

Of course, some processes still work the same today as they did 40 years ago.

But as a company (and as an individual) you should still aim for continuous improvement.

When given the opportunity to make our lives easier through new, innovative ideas, why do we tend to hold on to old patterns?

According to Xero, 45% of surveyed advisors believe accounting needs to go digital to survive. Often, the decision-making power for or against new tools lies with a CXO, who, in most cases, is neither familiar, nor actually confronted with, the actual process.

How are constructive decisions made here? 

Old school technologies and processes don’t always survive.

Remember floppy disks? Celebrated as a groundbreaking invention in 1969, this storage medium is useless today. Unless you use them as a drip mat for your daily glass of wine, maybe.

What I am trying to say is the following: There is a time and place for everything, but sometimes it’s time to say goodbye.

Especially as a company, it is so important to recognise this and think progressively in order to stay agile. What if Excel and Co. are the next floppy disk?

Don’t get stuck in old routines.

Follow (digital) trends, try new things and embrace change. That’s the only way to grow.

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