Are you an accountant who is looking to get started with automation? If so, you’re in the right place. In this article, we’ll show you how to get started with accounting automation and 10 benefits of automation.
Robotic Process Automation (RPA)
Robotic process automation (RPA) is the use of software to automate repetitive, transactional accounting tasks typically performed by accounting and finance teams. RPA can be used to generate financial statements, reconcile accounts, and perform other routine tasks.
By automating these tasks, organizations can free up staff to focus on more strategic work. For example, Invoice processing can be a time-consuming task, especially for the accounting and finance departments. By automating the accounting process, businesses can save time and resources.
What is Account Automation?
Before we get started with automation, let’s first define our terms before we jump into the benefits of accounting automation. Accountant as an individual is someone who is responsible for keeping financial records, analyzing them and producing reports. In simple words, accountants do bookkeeping, report generation and analysis.
On the other hand, a bookkeeper is a person who takes care of accounting tasks such as invoicing and payment processing. Although both accountants and bookkeepers have their own roles in accounting, they have a common goal – to provide information to support decision making in organizations. They also make sure that systems stay up-to-date with current financial statistics.
Being a professional bookkeeper is a good thing, but it doesn’t mean that you’re an accountant. Accountant automation is a great tool that can help you to focus on tasks you do best and free your time for tasks which are less effective. Instead of spending your entire week doing bookkeeping and sending emails to each user’s inbox, automate the process by allowing the accounting software to complete these tasks.
You’ll be left with more time to do what you do best – analyzing data and producing reports for management. This is why it’s important to know the benefits of accounting automation before we get started with the actual accounting automation steps.
A Brief History of Accounting and Automation
Accounting is a job that has been present since the beginning of the world. It would be an understatement to say that accounting is a time-consuming and sometimes difficult job. There have been many changes in the way accounting has been done, but there have also been many problems with it as well.
In modern history there have only been two major advancements. The first was adding extra amounts along with debits and credits which did help cut down on some work, but not enough to make a big change in how things were done. The second major advance came in the form of computerized accounting.
With computerized accounting came the ability to store all of your customer and vendor information, sales figures and other important data. The way it all worked was that the accounting system would keep your records and then a computer would read the information out and make a report for you. Because it was all done on computer, it did help save a lot of time, but it also helped cut down on human error which is why many businesses are now choosing to outsource their accounting services.
What is Automated Accounting and How Does it Work?
One of the best options for small businesses is to outsource bookkeeping services, use automated accounting software, or both. It’s best to hire a professional bookkeeper and then use automated accounting software to reduce the amount of time required and save you time in the long run. With automated accounting software, expenses can be entered for approval immediately and automatically.
For example, when an expense report is exported from QuickBooks to Outlook and authorization is made or denied via email or a phone call. The time saved in switching between programs and looking at each item is significant. Add that to the time saved in waiting for financial reports and it’s easy to see why automated accounting software is so handy.
Accounting Automation – Steps Required
There are some essential steps that you need to follow in order for your accounting automation process to be effective. These steps must be followed before you can begin with actual accounting automation and will help you reach maximum benefits.
1. Conduct a Complete Analysis:
Before you proceed with automation, you must analyze your current bookkeeping system and choose the best method that will suit your needs. For instance, if you have a bookkeeper who processes most of your transactions then it is not necessary to invest in an automation process.
However, if you want to outsource bookkeeping activities to an accounting outsourcing service provider then it is advisable that you automate those activities before the outsourcing takes place. The reason for this is that automation speeds up the data processing process and allows your accounts receivable department to get paid faster by clients.
2. Choose a Software Application:
The next step is to choose a software application that you can use for automation. Choosing an accounting software application can be challenging because there are so many options that it’s difficult to understand their differences. When choosing an application, it’s important to look at its features such as report writer, product tracking and inventory management.
Some applications even allow users to create bar codes and logos, which means that you’ll be able to use them for different purposes such as invoicing and shipping. Open source accounting software applications are also an excellent choice because they’re free and offer great functionality and functions. These applications also function as Database Management Systems (DBMS), so you can connect them to the existing financial data stored in your company’s DBMS.
3. Implement and Operate the Accounting Automation Process:
Now that you’ve chosen a software application, it’s time to implement the entire process by installing it on your computer and connecting it to the existing financial data in your existing DBMS. Once you’ve installed the software and connected to the financial data, you’ll be able to start customizing it according to your specific needs, which will include setting up a recurring subscription plan as well as setting up work orders and invoicing templates.
4. Inventory Management:
Inventory management is a task that needs constant maintenance in order to maintain accurate financial records and provide valuable customer service to your clients. This is why it is imperative to set up an inventory management system within your business so that you can track your products and monitor the stock level of each item in your warehouse when necessary. It is also vital to look after payroll and tax payments every month as well as looking for any financial irregularities within your business as soon as possible.
Automating the Accounts Payable Process
Automating the accounts payable process can help your business tremendously. This would put an end to double payments, late payments, unpaid invoices and can increase your productivity.
With automatic automation of the accounts payable process, you would first use QuickBooks application to track all of your purchases and receiving invoices. The program will automatically create a list of all the outstanding invoices and send reminders to delinquent customers.
This automated accounting software will make sure that no expenses are left unpaid at the end of the month and will charge the appropriate taxes that you have set up in your program. This software is easy to use and can save your company a lot of time and money because it ensures that your company never pays for anything twice.
Accounting Automation – Benefits
1. Time Saving:
Automation saves you time by automating repetitive tasks. This is the number one benefit that comes with accounting automation – saving you time. In a way, it’s like hiring someone to take care of your bookkeeping activities instead of doing it yourself. Automation frees up your time to concentrate on important tasks such as analyzing audits and producing reports for management.
2. Money Saving:
Automation saves you money by decreasing the number of accounting personnel needed to do bookkeeping. This means that you’ll be able to cut on labor costs and save more money that can be used to grow your business. In today’s world, where business owners are concerned about cost cutting measures, accounting automation is a great tool to save some money and increase the profits of your business.
3. Improved Accuracy:
Accurate data is important for organizations because it helps them make crucial decisions that affect their operations of the company in a positive way. This is why automation is great because it creates highly accurate data by processing bookkeeping tasks automatically and leaving less room for human error. For instance, many companies invest in automation so that they can have highly accurate data that they need to support their financial decisions.
4. Better Client Service:
Clients are not happy with accounting professionals who keep sending them the same information over and over again. You’ll be able to improve your services offered to clients by automating repetitive tasks such as sending bills and issuing invoices. This will leave you more time to concentrate on tasks that matter most to your clients such as analyzing financial reports. In fact some companies only employ bookkeepers but no accountants because they’re more interested in servicing their customers than producing statistics for management reports and audits.
5. Efficient Networking:
Among the top reasons for using accounting automation is to improve networking with clients. This means that you’ll be able to distribute your business to new markets by giving your clients an opportunity to purchase your services or products over the internet.
6. Less Speeding up:
Bookkeeping activities need a lot of time and attention from accountants, so if you automate them, you’ll be able to leave them for more important tasks such as analyzing data and producing reports for management. This will enable you to keep up with sales targets, analyze audits and produce more accurate financial reports. In addition, you’ll be able to make better decisions which eventually lead to less troubling questions from your management team.
7. Easier and Safer Bookkeeping:
Automation enables you to manage bookkeeping activities with a full control over the financial data that you process for your business. This means that you’ll be able to manage the entire bookkeeping process from beginning to end. You’ll be able to receive reports in real time and with greater detail, instead of being left in the dark when receiving invoices or checking working capital.
8. Better Control:
Bookkeepers generally have full control over the accounting data that they process, but not accountants because they’re only responsible for processing the data and sending it up-to-date database management systems (DBMS). Automation can take care of this part of the job, so you’ll have complete control over your financial records and financial data. In this case, automation can be used to manage all bookkeeping tasks such as invoicing, billing and paying bills.
9. More Competitive:
Bookkeepers aren’t interested in increasing sales; they just want to keep their jobs because their office is not a very exciting place to work. In the end, accountants are more concerned about growing their business by providing the best services to the clients which lead to increased sales and revenue for the company. This is why accountants get higher pay than bookkeepers because they’re more competitive and motivated throughout the year.
10. Improved Confidentiality:
Accurate financial data is vital to maintaining the confidentiality and security of your company. If you don’t trust your bookkeeper, you’ll be able to extend this trust by outsourcing him to an accounting outsourcing service provider. Automation is a great way to get rid of inaccurate data because when automated, accounting software processes an accurate copy of the financial data instead of the original one. This provides greater confidentiality over the data.
How Will Automation Affect Accounting
Even though modern accounting systems have come a long way, many small business owners are still not aware of how they could be affected by automation. Automating your bookkeeping process is a great way to ensure that you stay in compliance with regulatory agencies and save time during the process.
Here are a few ways that accounting automation can improve your business:
When you automate your bookkeeping process, it’s possible that you may need to invest in some additional software. There are many online programs that are free of charge or costs extremely low rates for those who need them. As you begin to look for these systems, you’ll have to look for a system that is designed for your type of business and that is easy to use. You’ll also need to consider any training you will need in order to learn how to use the system.
Once you have chosen an automated accounting software, the entire process can be extremely simplified. Using an online program is much more convenient than traditional bookkeeping because it cuts down on many of the steps involved in keeping your books current and organized. It’s possible for most small businesses to use automated accounting software without any technical skills or special training so it gives them a few options when it comes time to choose a software program.
Will Automated Accounting Replace CPAs?
Thousands of small businesses use QuickBooks to do their accounting. Many accountants and bookkeepers use it as well. It’s a powerful program that allows you to keep track of income and expenses, but if you want to get the most out of QuickBooks and ensure compliance with tax laws, accounting automation is a good option.
Small businesses that want to outsource bookkeeping services should check into the cost and benefits of automated accounting software first.
Automated accounting software can be used as an alternative to bookkeeping services and many accounting professionals use it as an affordable, affordable and effective way to organize their clients’ financial records.
QuickBooks helps you with all of the basics of running a business. It’s an easy-to-use program that helps you keep track of income and expenses, but it’s not the best overall choice for your company.
The Future of Automated Accounting
Many corporations have been able to reduce the amount of time it takes to do their bookkeeping and filing because of the automation process. This can help them maintain a high level of efficiency that helps save a lot of money in long-term bookkeeping and accounting. They accomplish this goal by choosing a company for automated accounting services.
As the number of companies who outsource their bookkeeping continues to grow, the software industry has taken notice and have come up with new software that helps automate accounting services.
The goal of automating bookkeeping is to make it easier for medium-sized businesses to stay afloat, and this is why the software industry is working hard to make the automation process more efficient. By using automated accounting software, businesses can save both time and money that would have been spent on traditional bookkeeping.
Many small business owners have a hard time keeping track of their inventory and it’s not always possible for them to hire the services of an accountant or bookkeeper. When using automated accounting software you can set up a system that will help you record and monitor inventory so that your business is in compliance with tax laws.
As your business grows, you’ll need to implement accounting processes to ensure accurate financial reporting. This may include manual data entry for accounting operations, as well as automating certain business processes.
The software automatically tracks inventory and calculates the sales tax owed by the jurisdiction where the product was originally sold. This is a time-saving process because it’s possible to pay your sales tax at one time instead of every month throughout the year.