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Payment Digitalization Is Not Enough; Automation is Needed

By Nathan Schorr - Flexio


By Nathan Schorr | CEO - Wed, 07/13/2022 - 10:00

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Digitization and technological implementation today is an undeniable part of the industry. Software and digital actions are becoming more common to help with the most sensitive aspects of work; for example, those that are susceptible to human error, duplicate tasks, and the most complicated operational procedures.

Among these sensitive areas are the accounting departments of the businesses that, thanks to the automation of processes, can improve their delivery times and save the time they invest in their procedures while improving their ability to generate reports and carry out analysis of operations. These advantages provided business leaders with a clearer and more transparent picture of the state of their business.

As of the pandemic, 87 percent of Mexican organizations had accelerated their digital adoption and 88 percent had to reinvent their business model, according to data reported by the technology company Dell, in pursuit of more precise, simplified, and effective processes. But, the migration to a digitalized system is not only about the competitive advantage of some companies over others, it also becomes an obligation for the purposes of paperwork and tax obligations.

For example, the Mexican Tax Administration Service (SAT) is migrating toward digital tracking systems so that all taxpayers comply with the payment of their taxes.

To that end, Mexican workers carried out the process of obtaining proof of tax status from SAT, which according to the agency, has been implemented to prevent identity theft, the issuance of invoices to people with a tax situation or with financial resources of doubtful provenance. SAT has asked employees to corroborate their name, RFC (federal taxpayer registration key) and the postal code of the fiscal domicile of the workers in this country. As can be seen, digitalization is a reality that permeates the economy of companies.

Advantages of Digitalized Accounting

Today, investment in technology is essential for companies and is part of the necessary change processes that each business must carry out.

Thanks to the use of computerized systems and the increase in digital transactions, business accounting has developed to include a mapping of the market, departmental profits and losses, future forecasts about resource flows, and other measures that will provide a scenario conducive to making the right decisions.

The nature of the work of business leaders requires a constant state of alert, which must be promoted by their collaborators and the tools that are within their reach. Thus, the digital applications you use must be constantly updated and offer alerts to ensure productivity and obtain a significant advantage.

Investing in technology should be understood as a turn toward growth that all companies need to seek. The automation and digitization of processes within businesses offer certainty and risk reduction. It is an opportunity to develop intelligently. We have verified that an SME can save up to 78 percent of the time it spends on paperwork each month.

The implementation of technology for the accounting processes of a business can pay directly as the solution to very specific problems. For example, if total visibility of accounts receivable (AxC) is achieved through technology, there would be certainty in how much more the business can grow and how to meet collection, credit, and other debt commitments common to companies.

The CxC is of particular importance because it represents the money that is pending to enter the company or that has already entered and its origin has not been identified; it is one of the indicators of the financial health of the company. If this indicator is healthy, the company can cover its expenses, invest or face unforeseen situations at a low cost of capital. If this indicator is negative, the opposite occurs: high capital costs to cover spending and investment needs. In Latin America, it is more common for the indicator to be negative.

A recommendation for the use of digital alternatives is to use those that can concentrate different actions and utilities. Having too many applications can lead to data and information loss. Thus, it is easier to take advantage of a tool to program money inflows and outflows, accounting, and payments to suppliers, collaborators and services.

Digitalization and innovation are taking on more and more aspects of daily life and sticking to manual processes that are slow and inaccurate compared to new technological tools is not recommended. Business challenges force us to leave our comfort zone and facing great challenges should be in the DNA of every business leader.

The truth is that those businesses that have the ability to acquire data, analyze it and take agile and timely actions will be the great winners. The path forward is innovation and adaptation to new technologies.

Photo by:   Nathan Schorr

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