Last editedJune 20222 min read
Finance managers are tasked with delivering accurate, timely analysis of their company’s financial performance. However, traditional accounting processes make this difficult, since they can only provide data relating to past performance, rather than give a business a true picture of where it is now.
Continuous accounting uses technology to redefine the role of finance in a company by optimising its operations, so skilled staff can work on more valuable tasks.
What is continuous accounting?
Continuous accounting is a modern approach that can transform the way a business works. It makes use of automated real-time processing and deep analytics, and provides a company with more accurate financials whilst boosting the organisation’s overall effectiveness. A continuous accounting model empowers the finance team by making them more agile, so they can deliver more value to the organisation.
Continuity accounting principle explained
Continuity accounting is a fast, cost-effective way of managing the accounting process. It ensures that the finance team do their books every day, not just at the end of accounting periods. Traditionally the finance department completes their accounts at the end of the month, quarter or year. This often involves them having to work long hours to get these tasks completed.
Continuous accounting removes this burden by giving the team digital technologies, so they can improve efficiencies and obtain real-time visibility of the company’s financials.
Benefits of continuity accounting
Continuous accounting offers multiple benefits, including:
Automation: Continuous accounting uses financial software to automate many manual accounting processes. This leaves accountants free to focus on other tasks, for example, running analysis to assure the accuracy and integrity of data.
Up to date results: With data analysis being performed continuously, on a daily, or even hourly basis, companies always have the most up-to-date data. This enables companies to make better strategic decisions on a continual basis.
More even workloads: Financial software can help the accounts team perform multiple accounting tasks on a daily or weekly basis, saving them having to complete tasks in a rush at the end of the month or quarter. Using accounting software not only reduces employee stress but can provide executives with close to real-time information. This can help them make quicker and better informed decisions.
Another benefit of using accounting software is that it can integrate with a company’s payments technology, making it easier to automatically collect and reconcile payments.
Creates a more dynamic work environment: As the use of technology progresses, the accounting environment becomes more dynamic, and employees switch from a traditional manual-based model to a modern continuous accounting model. This new continuous accounting culture emphasises continuous improvement in operations, in a bid to make the organisation more competitive. Working in a more dynamic environment also boosts employee engagement and helps staff to improve their skills in other revenue-building areas.
As a business grows, it’s essential to adopt a more efficient and modern approach to accounting. Legacy systems and traditional accounting practices are not fit for purpose in the modern business world.
Continuous accounting can help companies reduce manual inefficiencies and improve accounting processes. By embedding technology in the company’s day to day accounting activities, organisations can gain access to more accurate real-time data.
Compared to traditional accounting, where workloads peak at the end of accounting periods, continuity accounting focuses on how a company is performing on a daily or weekly basis. This takes away the inefficient build-up of unreconciled transactions and problematic end of month accounting, and enables companies to hone and optimise their internal processes on a continual basis.
We can help
GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.