Do fiduciary companies need automated Trust Software if they already work with a document management system (DMS)? What are the main differences between DMS and automated fiduciary software? What does automated fiduciary software offer that a DMS cannot? In this blog post, we highlight the key similarities and differences between a DMS and automated fiduciary software.
Most fiduciary companies have been using document management systems (DMS) and accounting software for years, although Swiss fiduciary experts are still rather sceptical about automated solutions.
What is a document management system (DMS)? According to the business consulting platform business.com a DMS is “software that provides an automated way to store, manage and track electronic documents and images of paper documents” This means: With a DMS, documents can be stored, managed and tracked, and paper-based documents can be converted into digital images. DMSs were originally developed to make paper documents available in digital form.
What does automated fiduciary software do? Automated or fully automated fiduciary software has all the above functions and additionally takes over most of the repetitive and time-consuming accounting work. The Fiduciary accounting solution from Accounto handles, for example, voucher extraction, voucher posting, bank reconciliations and the reconciliation of journal and sub-ledgers fully automatically.
What they Document management systems (DMS) and trust software have in common
DMS and fiduciary software both simplify the conversion of paper-based receipts and records into digital documents. The storage and filing of these digital documents can be equally simplified with a DMS and with fiduciary software. Tracking changes in digital documents is also possible with both a DMS and fiduciary software.
What about the time factor: Can more time be saved with a DMS or with automated fiduciary software? With a DMS, thanks to the simplified storage, management and tracking of documents, you can reduce the time spent on bookkeeping somewhat compared to paper-based bookkeeping, but only to an extremely limited extent.
This is where document management systems reach their limits
Digitisation does not mean just creating electronic versions of paper-based documents. Rather, digitalisation offers fiduciaries the opportunity to outsource repetitive accounting tasks to software solutions and to open up new business areas.
Reading Tip: In the study “Fiduciary 2030” by Accounto, you can find out how fiduciary companies can hold their own in an increasingly digitalised SME world.
A DMS only accelerates digitisation in fiduciary companies to an exceedingly small extent. With the right fiduciary software, on the other hand, fiduciary companies can rely on a stable and secure platform to reduce the time spent on routine activities and instead create, promote, and bill for innovative services. This goes beyond the functionalities of a common DMS. Nowadays, it is no longer sufficient for fiduciary companies to work only with a DMS.
But automation also works with a DMS, doesn’t it?
In practice, many fiduciary companies have linked the DMS and the accounting software through an interface, which allows the two systems to communicate with each other. Accounts from financial accounting can be assigned to the suppliers stored in the DMS, which enables the supposedly automated booking of business transactions. If, for example, the fiduciary company stores account 4000 in the DMS for a material supplier, all incoming invoices sent by the supplier are “automatically” transferred to the defined account. At first glance, this may sound like automation. But the process is still strongly characterised by manual operations.
For example, employees still have to manually add the desired accounts to the individual suppliers in the DMS. In addition, the reconciliation of incoming invoices with the bank account is also not automatic, as an interface to the business account is missing. The automation of the entire voucher workflow (extraction, posting and bank reconciliation) can only be achieved by fully automated fiduciary software such as that of Accounto can bring about. Such a software solution completely eliminates the need for manual data entry, reducing the effort involved in bookkeeping to control tasks. Not only incoming invoices but also receipts and other document types can be posted completely automatically.
These are the other differences between a DMS and fiduciary software
As described above, with a DMS and with automated trust software you get a means to put an end to paper warfare. These tools allow you to convert paper-based receipts and documents into electronic versions. But the similarities end there. Especially around the topic of “automation of accounting tasks,” significant differences can be identified, which have already been addressed in detail. But there are other differences between a DMS and fiduciary software.
As DMSs are often not cloud-based, files stored in a DMS are often not automatically stored in a cloud. This makes it more likely that files, or at least the latest versions of files, will be lost in the event of a hacker attack, system failure or loss of the work device. Data leaks and data theft cost billions worldwide every year. Large corporations in particular repeatedly make negative headlines with their lack of data protection precautions. However, security problems can also lead to irreparable damage to the reputation of SMEs and can even result in criminal prosecution.
With smart trust software, you no longer have to worry about data protection and cyber security in most cases. All relevant data and information are kept on the platform. The platform company normally also takes care of cyber security and creates an IT emergency plan (disaster recovery) so that no data is lost even in the event of perfidious hacker attacks or natural disasters.
Would you like to know how your trust company can benefit from the digitalisation of the SME world with the right trust software? Book a free demo of the Swiss accounting platform Accounto here.