Back-office software that isn’t flashy but essential

September 4, 2018 By    
Do you know your average cost of processing and paying an invoice?

Do you know your average cost of processing and paying an invoice? Photo:

“Fashion fades, style is eternal.”

These were French fashion designer Yves Saint Laurent’s words to live by. Until I had three daughters, I barely knew who Yves Saint Laurent was, and rarely have I been accused of dressing either fashionably or stylishly. But if I were to apply the fashion/style distinction to software used in the propane industry, I would say that mobile tablets, tank monitors and customer management systems are the supermodels getting all of the attention on the software runways at the expense of eternally-stylish back-office software.

While my gambling skills are about as well developed as my fashion sense, I’m willing to bet that most of you know your average gallons per delivery, cost per stop and cost per mile. But I would also be willing to bet that you don’t know your average cost of processing and paying an invoice, processing payroll and tax returns, or storing and retrieving financial and non-financial documents.

A few years ago, we took a hard look in our back-office mirror and didn’t like what was staring back at us. While we still aren’t satisfied with everything we see in the mirror today, here are some steps we have taken at our own operation that may or may not make sense for yours as well:

We have our vendors send invoices and statements to either an email address or a post office box at a service that scans the invoices and statements into electronic format. These bills and invoices are read by optical character recognition (OCR) technology that links to our general ledger.

The OCR software creates a general ledger entry that, once approved – or corrected then approved – makes the general ledger entry in our general ledger software and attaches a copy of the invoice to it. It also can pay the invoice using either ACH, eCheck or a physical check cut and mailed on your behalf. This saves us hundreds of hours of labor each year.

Automated payroll management: Our employees track time using a smartphone app. This application tracks the location of each employee from the time of check-in to the time of check-out. It then sends the time to our payroll processing software/service that, in turn, prepares direct-deposit payroll, local, state and federal employment, unemployment and withholding tax returns and automatically creates and makes the general ledger entries into our general ledger. Again, hundreds of labor hours are saved compared to the manual processes and outsourced bookkeeping services we previously used.

Automated general ledger management.: We use a general ledger software that accommodates the bill management and automated payroll management described above. It also accommodates automated entry of sales, payments, accounts receivable and inventory information from our customer management system.

In addition, like most general ledger software, it can download transaction information from most banks and credit cards, which greatly simplifies the reconciliation process. It also can be accessed by accountants and is linked to income tax software.

Digital document storage.: We use a digital document storage system. It allows us to monitor access to files, set up file permissions on a need-to-know basis, digitally search for files and dramatically reduce the number of filing cabinets required for document storage.

Our back-office automation and integration has dramatically reduced the average cost (and time) it takes to pay a bill, store and retrieve a document, process payroll, and properly maintain books and records. While this level of automation is not for everyone, it’s a lot more fun (and profitable) spending time on marketing and growth than on making manual general ledger entries.

Now that sounds stylish to me.

Christopher Caywood is a co-owner of Caywood Propane Gas Inc. in Hudson, Michigan.

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