How Digital Technology Simplifies Business Operations and Financial Transactions

Technology has revolutionized the way companies conduct their daily business. What used to involve reams of paper, phone calls, spreadsheets and endless rounds of approval can now be managed from within a single platform.

This shift is especially pronounced in two areas of business: operations and financial transactions.

Companies can communicate with employees in real time and automate processes, track stock, manage customer contact, create and send invoices and pay bills, manage financial information and analyze performance. The tools used by large companies with big technology budgets are now available for even the smallest of businesses.

There are many operational challenges involved with technology, but once a business has implemented technology to manage operations, it is often easier to run and manage a business.

Automation Reduces Repetitive Administrative Work

Many business processes involve predictable tasks.

Employees enter data into spreadsheets. The finance department issues invoices. The manager authorizes staff expenses. The customer service representative answers frequently asked questions. The operational employee updates records as a product goes through the various stages of an order.

Manual work is very time-consuming and prone to errors.

Automation software can handle many of them automatically.

There are many examples of automated tasks that individuals conduct as part of their jobs, for example accounting packages can automatically generate invoices on a recurring basis; CRM systems can automatically set up follow-up actions on new prospects that have been added by sales staff; Inventory management systems can automatically update stock levels each time a product is sold.

Although the time saved by automation of individual tasks seems minimal, in reality it can quickly add up when applied to hundreds or thousands of transactions.

It can be used to carry out administrative tasks and free up time to concentrate on more complex work which requires individual creativity, thought, and contact with customers and others. All the time that is spent copying information between systems could be put to better use investigating problems, improving processes and generating income.

Automation of business processes does not mean automation of everything. While repeatable processes can be automated, others require human oversight and intervention, particularly when financial or operational consequences are involved.

Cloud Software Makes Business Information Easier to Access

Business software is often designed to run on specific computers or internal servers, or even to work with physical documents in an office.

Cloud technology changed that model.

As businesses are operating from different locations and with different devices, employees can log in and view all the business information they require through online systems. Whether employees are sales people, managers or accountants, they can view and work with all the financial records of a business from anywhere in the world.

Cloud-based tools also make collaboration easier.

Collaboration across several people working together on the same piece of information is much easier than having to create multiple versions of a document, send updated versions of a file by email and manage a multitude of copies.

Value for companies with distributed or hybrid teams

Improving continuity. As long as a business has stored information in proper centralized systems, it does not matter if an employee’s computer or a collection of local files have gone missing.

Digital Payment Systems Speed Up Financial Transactions

Financial transactions used to involve considerably more friction.

Checks used to be written by hand and physically delivered to the recipient. This would then have to be deposited into a bank account and cleared before it could be recognized as payment. For cross-border payments, this used to involve a lot of paperwork and long waiting periods.

Digital financial systems have shortened many of these processes.

Online payment systems allow customers to pay instantly online, by sending an electronic invoice and even by automating recurrent payments and transfers between accounts. There are many online payment systems that also can be integrated with your accounting software to make and record payments.

That convenience matters for customers as well.

Online payment systems are highly convenient for customers who wish to complete payment for invoices online within a few clicks of a mouse. In contrast, customers have to print out paperwork and mail out checks, which can often cause delays.

Bank transfers are also becoming a regular part of business transactions, when paying suppliers or moving money between different operating accounts. Large transactions, such as those for a car, are often paid for using bank transfers because they are more secure than using a card for such large amounts. Understanding how to do a bank-to-bank transfer can therefore be useful for business owners and finance teams that regularly need to move funds securely between accounts.

Online transactions provide evidence of having made a payment or have received payment, eliminating the need to search for paperwork. Such information is usually presented online in a formatted and organized manner, such as payment date, reference number, sender/receiver information and payment status.

The Federal Reserve has a wealth of information on the payment systems in the U.S. and the structures in place for electronic fund transfers between financial institutions.

Integrated Systems Reduce Duplicate Work

Integrating technology between different business tools is where technology truly becomes useful.

Consider a simple online sale.

A customer places an order online, paying with his credit card. Payment has been made, stock for the product ordered has been reduced, the transaction has been recorded as income by the company’s books. The customer has been added to the list of the company’s customers, all the information required for the shipping of the goods ordered by the customer has been entered.

Without integration between different business tools, much of the information required for completing a transaction will have to be re-entered by employees on several occasions.

Data moves automatically between different pieces of business technology.

However, each individual process can lead to duplication of work. For example, if an order is completed on one system and the order is still marked as pending on another, it can be very time-consuming for employees to compare each individual record and ascertain which is correct.

Technology integrated between all business systems helps to provide a business with the most consistent information possible.

A process that works with 20 monthly transactions may become a problem for a company that has grown to 2,000 transactions per month.

Technology Works Best When It Supports Good Processes

Automating a poorly designed process simply allows the business to perform that process faster.

Automating a poorly designed process just enables faster bad decision-making.

In order to take advantage of technology, a business first needs to set up processes that, where appropriate, can be made more efficient by technology. A company should analyze its current processes and then look for technology that can solve problems in these processes. The owner of a business should ask himself a number of questions before selecting a new platform. These are: what is the problem with current processes, who will use the new platform, what information will it need, and how will it link with other systems within the business.

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