In order to maximize profits, businesses today must commit to using the most effective accounting methods possible. High-tech solutions can help companies keep track of money entering and exiting their accounts, and without them growth could be stifled because of costly errors like duplicate payments. Despite this, Manufacturing Business Technology Magazine recently reported that many organizations are falling behind when it comes to accounting.
According to the news source, recent data from Gartner revealed that inefficient revenue tracking methods may account for losses of 1 to 2 percent of businesses' gross revenue. While this figure may seem small, it can take a significant toll, especially when it comes to larger companies. The research firm estimated that a multi-billion dollar corporation like Google could lose as much as $1 billion every year if it were to improperly track its budget.
A study conducted by the Financial Executives Research Foundation and Robert Half may indicate where enterprises are coming up short, CFOworld noted. In the 2012 survey of 262 financial executives, 64 percent of respondents admitted to relying on manual finance recording solutions such as spreadsheets to track spending. The figure was even higher among small businesses bringing in revenues of less than $100 million, with 74 percent using outdated accounting techniques.
For companies that may have fallen behind when it comes to effective financial tracking, hope is not lost. Conducting a recovery audit can help businesses pinpoint the source of budgetary issues, including overpayments, duplicate payments and other errors. Audit solutions are important because they help organizations reach their full potential by highlighting areas for improvement. Leaders need to understand their problems before they can move forward.