As digital transformation continues to become more prominent in the business world, there are many digital tools that solar installation companies need to keep up with.
The digital age has changed how people work and live their lives, so it is important for solar installation companies to be on top of these changes.
Managing the accounting and financial control is vital for solar installation companies.
That is why solar installation companies need a comprehensive set of tools to manage all standard and project accounting requirements including accounts payable, accounts receivable, financial and project profitability reporting, payroll, job costing and more.
One digital tool that has become essential for accounting is integrated cloud-based accounting software.
Digitalization in Accounting: Which Processes Can be Automated?
Accounting has typically been a field characterized by a low level of digital innovation. However, many accounting processes are repetitive and time-consuming, which makes them ideal candidates for automation.
Below are some examples of some processes that can be digitalized:
Accounts payable/receivable: instead of having paper invoices lying around waiting for approval, solar installation companies can automate invoice processing with an invoice management system.
Audit documentation: a digital audit process is much more secure and accurate. Solar installation companies can rely on digital files and audit trails to document and prove compliance.
Expense management: submitting, reviewing, and approving expenses manually is time-consuming and inefficient. An expense management tool automates the process and improves the experience for all parties involved.
Monthly/quarterly close process: retrieving the data needed for the monthly/quarterly close is much faster and more accurate when relying on digital accounting software.
Client contracts/agreements: besides internal processes, solar installation companies can also digitize the signing and managing of client agreements. It’s more convenient for everyone involved.
The cost of accounts payable errors
Accounts payable challenges generate tension since accounts payable is sometimes a process comprised of disparate, disconnected systems and procedures.
Inaccurate or late payments to suppliers can damage relationships and lead to late fees.
You need to determine who purchased what, why, if the orders were approved, whether you should pay the bills, and how the purchases would affect the numbers in your budgeting program if they were not permitted.
Accounts payable errors cost companies in two ways:
Financial costs occur when money is spent when it should not be. Overpayments, duplicate payments, and payments for invoices that should never have been paid in the first place. All of these things cost money to your company.
When employees waste time looking for details that aren't in your purchase order system, they incur time expenses. Instead, they are compelled to manually investigate what happened with invoices, purchase orders, or other transactions.
Time costs are just as real as money expenses, but they are frequently overlooked since they do not appear directly as a line on a financial report.
Managing the accounts payable department may be a challenging task. Not only are AP staff overburdened with work, but there are several more obstacles that slow down the AP process including:
Poor data entry
Inefficient invoice processing
Messy record keeping
Manual follow up
What might start out as falling behind on payments to your vendor, can escalate quickly.
Falling behind on invoices can disrupt your supply chain, but it can also mean you won’t be able to negotiate for price breaks from your vendors.
Finally, inaccurate invoice information can drive serious cash problems.
Accounts payable automation
Repetition is the key to an efficient accounts payable process. Another best practice is to set up a standardized system for managing invoices from the time you receive a bill to when you pay it.
Your company can improve the efficiency of your accounts payable processes by creating management workflows that will help you identify and improve blockages within your system.
By using a modular software solution with integrated accounting, solar installation companies can easily manage vendor bills, issue purchase receipts, arrange vendor payments by several methods, arrange payment of multiple bills at once, forecast future bills to pay, and keep track of employee expenses.
Benefits of Automated Accounts Payable
Increased processing speed and oversight.
The cost of accounts receivable errors
Accounts receivable is critical to your company's performance since it plays an important part in bringing cash into the company. Cash flow would decrease if bills were not sent to clients quickly and accurately, hindering growth, causing instability, and eventually strangling the company.
In a perfect world, customers pay their bills on time, and you have one fewer thing on your to-do list. Unfortunately, most solar installation companies will require someone in the accounting department to write a collections letter or make phone calls to follow up on past-due payments.
Having said that, your accounts receivable staff may have been utilizing the same practices for years. They continue to spend time physically drafting, reviewing, editing, printing, and mailing bills despite the modern technology that surrounds them.
Accounts receivable automation
Accounts Receivable automation converts manual invoicing into a digital process. It generates invoices automatically based on your company's data, delivers them electronically on predetermined dates, sends payment reminders, and settles payments with accounting systems and bank accounts.
AR automation automates the entire traditional AR process by offloading the administrative effort to technology. Your new e-invoices are emailed to your consumers quickly and completely online.
AR automation generates invoices automatically and sends them out at the specified time and date. There is no longer a need to spend time drafting, revising, and editing bills.
Benefits of automating accounts receivable:
Faster invoicing and payments
Reduced costs of payment processing
Improved customer service
Reduction of human error
Improved cash flow.
The Benefits of Digital Accounting for Solar Installation Companies
Saving time and improving productivity
Digital accounting solutions remove much of the manual work involved in every day operations of solar installation companies, from data entry to reporting and everything in between. This enables solar installation companies save time and focus on more analytical and insights-driven tasks.
Data accuracy and scalability
Digital solutions are more reliable than traditional accounting practices. People are prone to making mistakes, whereas software will provide accurate data much more consistently.
Another thing to consider is that starting off with manual accounting practices might be fine for a small solar installation company, but as it grows its needs change. A digital accounting solution offers better opportunities for scaling based on the company’s needs.
Cloud-based accounting software has the benefit of being accessible from anywhere, across devices. This provides a much more efficient way of working, and it’s particularly convenient in case of a system failure. Users can simply log in from a different computer and continue their work.
Analytics and real-time advice
Most digital solutions provide some sort of insights and analytics, making it much easier to create reports and spot trends. Very often, this data is provided in real-time, so solar installation companies can make educated business decisions even faster.
Integrations and syncing
Integrating an accounting program with other business tools means that they can update each other in real-time or on-demand by automatic syncing of the data. This reduces manual work significantly and ensures data is always up to date across platforms.
Powering Solar Accounting for The Next Era of Growth
Hiring more staff isn't always the solution to your accounting problems. It's frequently the process and tools that are slowing things down, delaying customer conversations, and causing further issues.
You may achieve huge efficiency improvements by implementing an integrated modular software solution like the PowerOn software solution with integrated accounting, without incurring the extra expense of hiring people.
If you're interested in learning more about how your business could benefit from digital transformation or would simply like to discuss your specific needs in more detail, please don't hesitate to Contact Us.