E-payment, online money transfer and modern bookkeeping
When e-commerce began its meteoric rise in the late 1990s, the security systems of major banks and card providers were unable to keep pace. Initially this led to a sort of small-scale mass panic, as web users debated whether an action that fundamentally constituted sending card details to an anonymous stranger over the Internet was really a good idea.
But, as always, out of the panic came a solution. In 1998, Confinity was founded which would eventually become PayPal. Taking cues from the money transfer platforms developed by companies like Mondex several years earlier, PayPal launched its e-payment and money transfer service, revolutionising how commerce is handled online.
Of course, banks and card providers soon caught up, but platforms like PayPal, SagePay and other third-party money transfer systems remain incredibly popular methods of securely transferring funds to this day.
The Effect on Bookkeeping
The advent of online payment systems actually made life easier for bookkeepers, particularly those working for small to medium-sized enterprises and self-employed people handling their own bookkeeping tasks in-house.
This is because increased reliance on electronic and online payments means a decrease in reliance on cash payments. As cash is more difficult to trace than other forms of payment, bookkeepers must be extra careful when making sure that the books balance. If discrepancies start to emerge regarding cash transactions, the results can appear suspicious.
As property prices increase, small scale entrepreneurs are looking toward online markets to make money with the minimum of initial outlay. As a result, increasing numbers of SMEs are opting not to have a physical shop at all, instead handling their transactions via an e-commerce page or other online platform.
Companies using platforms like SagePay or PayPal are giving their bookkeeping teams an extra safety net when it comes to auditing the incomings and outgoings of the firm. All transactions that are carried out via these services are automatically recorded, facilitating quick and easy reference for bookkeepers.
The Future of Online Money Transfer
One of the online money transfer market’s leading software providers is aiming to make its platform even more easy to use for bookkeepers. 2015 marks the launch of Sage’s X3 enterprise resource planning solution, a system whose developers hope will be a game changer in the industry.
The latest version of Sage’s ERP software will enable SMEs to fully integrate the platform into their existing business practices and models, creating a solution which is fluid and can work around the differing needs of modern businesses.
As businesses expand into international markets, the remit of their accountancy and bookkeeping departments expand as well. This growth makes the professional life of the business’ bookkeeping team slightly more complex. However, the framework provided by a comprehensive ERP gives bookkeepers extra breathing space and offers an extra structure around which to build bookkeeping and accountancy practices that grow with the company.
It is too early to tell how bookkeeping teams will adapt to the implementation of Sage’s updated ERP. If it is successful, however, this sort of all-encompassing approach will likely be adopted by other online money transfer platform developers in the future.
By an iQualify UK staff writer