Dematerialization, or DEMAT, is the process of using electronic archiving tools to manage financial records instead of physical documentation. It eliminates the need for physical storage and allows for simultaneous access by multiple users. There are free and paid software packages available to achieve a complete dematerialized state.
Also known as DEMAT, dematerialization is a process that moves away from the use of physical documentation in order to maintain financial records. Instead, dematerialization makes use of electronic archiving tools to keep track of all types of financial transactions. The range of documents that can be effectively managed with software applications includes virtually everything from basic accounting records to stock certificates.
One of the key benefits of this approach to electronic accounting is that there is no longer a need to physically store copies of financial statements and other accounting documents. Thanks to scanning technology, it is even possible to make electronic copies of supporting documents that provide references for line items in electronic ledgers. Everything can be easily hosted on a hard drive or server. To avoid loss or corruption, backup files can be easily created and stored offsite.
Along with basic accounting records, dematerialisation also eliminates the need for physical backup certificates. Electronic copies of stock can be archived for easy retrieval. In case the shareholder needs copies of the stock quickly, they can be accessed and transmitted by electronic methods, such as email or secure FTP transmission.
Dematerialisation also allows authorized persons to work with the same documents simultaneously. With physical accounting methods, it is often difficult for two people to work through the books at the same time. When the accounting process is fully electronic, different people can perform different functions simultaneously. It is possible for a team to create new invoices, record payments received for past invoices and prepare a variety of reports at the same time.
There is no doubt that the dematerialization process can benefit users in several ways. Record keeping takes up much less space, can be accessed easily from remote locations, and allows multiple users to access accounting books at the same time. Currently, there are free and paid accounting and financial documentation software packages that can help any business or organization easily achieve a complete dematerialized state. In the case of accounting software, there are also online products that allow an individual or company to create a set of virtual books. Securely uploaded to the servers for the product, authorized persons can access and work with the records from any location with an active Internet connection.
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