Automation is a buzzing topic right now. Depending on your personal philosophy, technology could soon make finance professionals more effective than ever or change the industry for the worse.
However, it’s more than obvious that in order to support the growth of your business, the digitalization of the financial function for the benefit of process optimization and better performance management is an important factor of success.
This shift towards automation applies to all categories of businesses, and more specifically, to mid-size companies that are facing tough growth challenges with limited resources. Accounting automation has already completely transformed numerous financial functions by enabling teams to spend less time on manual tasks and more time on growing the business. That translates into less time making clunky, manual calculations and more time delivering into your business finances. Even recent findings hint that 73% of finance leaders believe automation increases their functional efficiency and gives teams more time for higher-value tasks.
What is Accounting Automation?
Accounting automation removed the most manual of a bookkeeper’s job by automating the tasks to happen digitally and usually immediately. It’s essentially digitalized accounting software that removes the ordinary tasks so a financial professional can spend more time on investigating and interpreting important data and less time on repetitive tasks. Starting from today, your accountancy routine can automate:
The process of sending and receiving invoices can be easily automated using reliable software for accounting. If you choose a tool that integrates invoicing software, you can both create and edit invoices that the system emails out. A software is able to monitor whether or not the invoices have been paid and sends reminders on your behalf.
Automated invoice recognition tools integrated with bookkeeping software make invoices less redundant and more accurate. Such tools can recognisze and upload data to your account system, reducing the amount of time your team needs to spend on manual data entries and eliminating human error.
Running after teams to collect receipts has never been a preferred activity. If you issue business credit cards or compensate workers for expenses, you can save time by eliminating the need for chasing your expenses through receipts.
An automated expense management can:
- Match data from company card credit cards to receipts
- Streamlines receipt uploading with snapshots
- Creates a quick approval process
- Forwards expense data for the accounting
Payroll is one of the most tedious and massively automatable parts of accounting. Going through employees’ working hours, tax documents, and employment types is very time demanding.
Making Tax Digital and automating your payroll can help you:
- Calculate the net pay for each employee
- Distribute paycheques with a simple tab
- Input data to the accounting software
Numerous accounting software today feature built-in payroll automation tools. If you’re already using one, you can check if your accounting software provider offers the payroll automation option.
Another important part of accounting is bank reconciliation. That means coordinating your bank account statements to your accounting records to spot and correct any discrepancies.
While it’s easy to think bank reconciliation doesn’t require human judgement, it pays to know that, for the most part, it can be automated with little manual intervention. A bank reconciliation software can verify your records in a fraction of the time it takes to do it manually.
By automating your bank reconciliation process, you can:
- Match your bank and books statements
- Flag any missing our double entries
- Correct inconsistencies within cash records
- Detect fraud in real-time by introducing period reconciliations
Automated accounts receivable
Accounts receivables are the lifeblood of small and mid-size corporate. If you get it wrong, account receivables can easily impact your revenue. Though it can have a great impact, this aspect of bookkeeping isn’t given as much attention as it deserves. Account receivables include issuing and tracking invoices and working with everyone from finance teams, sales, and customer service. The fact that you have to collaborate with many stakeholders and approval authorities makes this process prone to human error and incredibly time-consuming.
An automated AR can help you:
- Generate accurate invoicing
- Get immediate approvals
- Issue quick reminders to clients for payment
Automated Accounts Payable
Accounts payable or (what you owe to others) can be anything from bills to rent. However, delaying your payments can hang heavy on your business’s financial health by accumulating expensive fees, not to mention a bad relationship with suppliers.
Managing your AP requires many discrete steps involving numerous business departments, which often lead to delays and blockages for accountants.
An automated AP can help you:
- Collect bills in a central repository
- Initiate auto-matching of deliveries received against bills
- Automate approval process for invoice
- Initiate payment to suppliers
- Records transactions to your accounting system
Your AP could be automated completely if you chose to configure it within your accounting software.
Automated financial reporting and tax compliance
Tax season is energy-draining for accounting professionals. Preparing financial reports and calculating tax obligations isn’t just labour-intensive but also complicated for bookkeepers. What’s more, such reports are challenging for non-accounting shareholders to understand, so it makes perfect sense to require bookkeepers in small businesses to diversify and deliver insights.
Financial reporting and tax compliance tools can work wonders for your business’s financial health by giving your accounting professionals and other teams the time and the means to identify trends and even predict results. It makes the most tedious process simple, more accurate, and more effective.
Automated tax compliance and financial reporting can help you:
- Update taxes based on current rates and your area
- Prepare tax returns
- Create financial statements
- Predict future revenue
In the digital transformation age, we expect accountants to be able to equip themselves with new skills empowering them to make better decisions using the time freed up by automation and customised reports.