Digital accounting is paper-free accounting. This means that the purchase invoices, sales invoices, expense documents, as well as contracts, acts, customer information and, if required, other documents, are not sent or kept on paper, but are stored digitally in the business software or in the cloud. This means that printing and delivery of documents is no longer necessary. Anyone can access the data in the electronic environment to the extent necessary for their work.
It is crucial to understand that a digital document has exactly the same legal force as a signed piece of paper. This requires getting used to it and also a change of mentality. The text on invoices, and especially purchase receipts, can fade over time. This is not a concern with a digital document.
Life forces you out of your comfort zone
Estonia took a big step towards digital accounting on July 1, 2019. This is when all the public sector organizations switched to electronic accounting and only started accepting invoices in the form of e-invoices. We would like to remind you that an e-invoice is not a PDF file sent by e-mail, but an XML file that moves between information systems. This step by the government made many companies take action. The decision was easy to make – if you want to send an invoice to the public sector, you need to create the capability to send e-invoices.
The spring of 2020 is a critical point around the whole world. Measures to control the COVID-19 pandemic require everyone to behave differently. In the past, the following sequence was very common in the work process of companies: the invoice was printed out, handed over to the manager for signing, and then the invoice was taken to the accountant. The need to reduce and avoid social contacts will lead to fundamental changes, and the digital handling of invoices and other documents cannot be avoided.
Technically, most of the accounting programs are ready for e-solutions and interfaces with e-invoice service providers and banks are available.
Sending an e-invoice
To send an e-invoice, it is necessary to sign an agreement with the e-invoice operator. There are many relevant operators in Estonia, e.g. Omniva, Fitek, Telema, Envoice, etc. Some software applications are operator-specific, but with Standard Books business software you can choose an e-invoice operator yourself.
In principle, the sender of an e-invoice just needs to create an invoice in their business software. Then it reaches the business software of another company via the software, and the recipient of the invoice can send the invoice to the bank with just a click. The information systems of e-invoicing operators are linked with each other. If the company’s customer or cooperation partner is using another operator, the e-invoice will be sent directly from one operator to the other and then to the customer. For some operators, you can choose whether the invoice is sent to the customer as an e-invoice in the information system or to the internet bank, as a PDF file to an e-mail address or in a paper format to the mailbox.
In the near future, Excellent’s Standard Books business software will also display information on whether a company accepts e-invoices or not next to each company’s invoice and contact card.
If your customer does not yet accept e-invoices, the invoice shall still be sent in the PDF format. Most accounting software applications do this automatically. For example, Standard Books business software allows you to send all the sales invoices for the day simultaneously at the end of the day.
Communication is crucial
Let your partners and customers know that you wish to receive and send e-invoices. If your company already has an effective system for sending and receiving e-invoices, it is a good idea to let others know about it. For example, you can add e-invoicing information to a sales invoice or inform your partners by mail about this.
Sometimes it may be the case that a new technical solution is ready to use, but people still work in the old way out of habit. Nowadays, when many people work in home offices, there are many reasons to get used to a new way of doing things.
The environmental aspect is also an important aspect in the transition to e-invoicing. The savings on paper will be remarkable and this has also been used as a marketing message.
Where do I start digitizing accounting?
- Choose an e-invoicing operator
- Sign a contract with an operator
- Make the necessary legalizations in the software
- Inform your cooperation partners
- Start using e-invoices
Digitization of invoices and checks
Paper invoices and checks can be digitized relatively easily. Many e-invoice operators offer a PDF file digitation service. Imagine that you receive an invoice in PDF format. The e-invoice operator will digitize it and you will receive an XML file into your program just like an e-invoice.
With paper checks you need to take two steps – upload and digitize the checks. This service is also offered by several companies and, in addition, relevant mobile apps have been created. The result is the same in any case – the required information reaches the company’s software in digital form.
What other information can be digitized?
Depending on the company’s field of activity and work processes, business software can contain a large amount of different types of documents and data. When switching to digital accounting, you must view your business as a whole and make the necessary decisions about what and how to digitize. For example, you can digitally store all contracts and acts and link them to specific invoices if required. Your business software may also contain all customer information from contact information and the offers sent to the details of the last phone call. If one of the employees falls ill, the work can carry on and no important documents or pieces of information will be ‘hidden’ in the employee’s computer. All the necessary information for work is visible in the business software to those who need it.
Many software programs allow such solutions, and Standard Books can focus on this area in great detail. You simply build up all your accounting digitally with all the necessary documents and folders. This way the accounting archive will also be stored electronically. Finally, the printer is only needed in rare cases.
Some business software applications offer additional advantages
The choice of business software undoubtedly depends on the size and field of activity of your company. In some cases, you can combine several features into one software platform, and don’t need different environments. For example, all internal e-mails can be transferred to Standard Books business software. All the necessary documents and internal communication are easy to find in one location. Solutions such as this support contact-free work, and at the same time necessary and important information is available to everyone at all times.
For example, when working with reports, information is edited and sent within the same program. There is no need to turn this report into a separate closed file. When one person starts working with the report in the program, the other person can change the parameters if necessary and continue working on the same report.
The benefits of digital accounting
1) Saves time. The accountant no longer has to enter data manually, as the information directly reaches the correct fields of the program.
2) Fewer mistakes. There will always be more errors when entering data manually. This is not the case if the document is transferred digitally.
3) Availability of information. An accountant, financial manager, or company manager, but also salespersons, portfolio managers, customer support staff, etc., are always well informed with the information they need. The information is concentrated in one environment and can be found quickly.
4) Security. The paper may fade or be destroyed by water or fire. This is not the case with digitally stored information. You can use the software in the cloud or download the program to your computer. Around 99% of Standard Books users download the program to their computer, and in our opinion, this method is the most secure.
How to switch to digital accounting?
Switching to digital accounting requires a specific plan. Think about what information you need to digitize – sales invoices, purchase invoices, acts, contracts, expense checks, etc. You should also determine the date from which your accounting is to be digitized. In a medium-sized company, it is a good idea to appoint a project manager who will communicate with different parties and resolve issues that arise during the transition to digital accounting.