Batch accounting and Real-time accounting the Spire Way
For a long time now, real-time accounting versus batch-based accounting has been a subject of debate. In this blog, we explore the benefits of each. We will also explain how Spire offers batches in some places and real-time accounting in others.
Batches
Batch-based processing has several advantages. In classifying entries to ensure accuracy, having better internal controls allowing a review before posting, and in preserving the audit trail’s integrity. Batch-based accounting also makes sense for organizations processing large numbers of transactions. In some ways, batches are more efficient and easier to perform. Batches make sense when accumulating employee time and processing payroll altogether. This process allows for time saved in payroll. In the AR, depositing one cheque (or payment) at a time can be rather cumbersome. Unless it’s one big cheque, we are not likely to see bookkeepers making one deposit at a time, but rather a batch of many deposits at once. For organizations with no immediate need for information, it is reasonable to delay data processing by using batch-based accounting.
Realtime
While in some cases, batch-based may allow for a more efficient and audit-tight way of processing accounting data, it also presents some disadvantages. More and more businesses need the ability to take immediate action on items that are crucial to their business. For example, purchasing managers at the mercy of a batch-based system would find it counter-productive to wait until batches post to provide inventory reports. Knowing that the need for real-time data isn’t just for the finance people, these businesses end up spending more of their budget for add-ons to increase access to their data in real-time. In this scenario, real-time accounting is better suited.
Keeping track of every transaction as they happen gives department heads an instant view of their overall financial status. Thus enabling decision makers to make more accurate projections. Being able to filter and compare using real-time data means companies can keep a close eye on margins and identify areas that need improvement. We see this in adjusting product prices like landed costs (duties, shipping, etc.). This fucntionality ensures accuracy of margins and profits per item, empowering an organization and keeping them one step ahead of the competition.
Which process is right for your business?
Accessing and understanding the data that makes up your debits and credits is critical to growing a business. Data isn’t just a way to analyze numbers; it’s a helpful way to react to growth potential when the opportunity arises. It also potentially prevent risks that have yet to happen. Mining meaningful data contributes to the company’s success, however when data isn’t processed the best way, it can be destructive. Especially when attempting to achieve your reporting requirements.
To summarize, with batch-based processes we analyze data over time: weeks, months, quarters, or years; for some, that process works just fine and is preferred. Real-time data is crucial for those needing to make fast decisions in fiannce and that extend beyond the accounting department.
The Spire Way
Spire offers batches in some places where it makes sense. In Sales Orders, you can choose to batch or live post when invoicing. With batching, the invoices are held in a closed state until a supervisor reviews, makes any needed changes and then creates a batch. Next, they would close the batch to post to AR and the GL. With live posting, the invoices are posted to AR and the GL right away. If changes are needed then a credit and rebill has to be done. Batch and Live processing in Spire are also available in Accounts Payables and Accounts Receivables and Payroll Timecards.
You can easily manage batch-based vs. live posting in Spire’s company settings. Learn more about Spire’s company and user settings by watching this webinar, where we also many other cool features.
Bottom line: Spire allows you to run your business the way you want – whether that be live posting or batch accounting, we can accommodate your process.
For more information on how Spire offers your choice of batch-based accounting or real-time accounting along with business intelligence reporting, click here. We’ll be happy to provide you with a free demo and help you further discover the power of Spire.