Accounting automation is an essential tool for company owners to use when eliminating problems associated with manual accounting.
Nevertheless, while many accounting experts like the idea of streamlined accounting processes, some fear that they might lose their jobs to this software technology. This should not be the case.
Accounting automation software can help financial professionals perform their tasks more efficiently and accurately, like a reliable automated assistant. However, the critical job of analysing data and interpreting the reports generated by the software will always belong to the accountants.
An Insight into Automated Accounting
Automated accounting entails using software to automate essential finance and accounting tasks. Accounting operations such as updating data, accounts reconciliation, and generating financial reports can be done without human intervention using accounting software.
Even though computerised or digital accounting is not entirely new, recent technologies like artificial intelligence have exponentially increased the ability of these systems in the past few years. Accounting software might perform tasks ranging from monitoring, recording, and storing data through artificial intelligence. It eliminates repetitive tasks, including data entry, calculations, etc., so analysts can spend more time on value-adding tasks.
Accounting automation solutions essentially revamp the entire accounting operations. Contemporary solutions require minimal human intervention and finish tasks without mistakes. It allows your team to spend more time on strategic and value-adding tasks such as investment planning or budgeting.
Accounting Tasks to Automate Immediately
Here are some accounting tasks that you can automate immediately.
1. Payroll
A critical function of accounting teams is to handle the payroll. It needs much attention to detail. Members of the payroll department spend multiple hours reviewing employee tax rates and records to generate accurate and detailed reports. Automating this function can save your team a lot of effort and time. It even ensures the accuracy of payroll reports, resulting in lower disputes and greater employee satisfaction.
Suppose you are dealing with hourly freelancers or employees on fixed wages. In that case, automation software can help you deposit paychecks into employees’ accounts directly, manage payroll taxes, calculate salary, sync with time-monitoring software, and generate automatic filings.
2. Purchase Management
When businesses buy goods or services, they generally have to deal with paperwork, such as contracts, purchase orders, etc. Automating purchase orders ensures that nothing gets lost and that all the required paperwork is completed correctly.
Accounting automation software offers purchase management features that automate low-value and repetitive processes such as payment processing, purchase order creation, etc. Automating your purchase process can save personnel expenses, reduce the purchase-to-pay cycle, and eliminate mistakes.
3. Expense Reports
An expense report is a form recording how much your company spends on business expenses, including several variables such as:
• Date when the item was purchased
• Vendor from whom the product was bought
• Project for which the product will be used
• The employee who made the expense
• Account number
• The value of the whole transaction
• Notes might include other details, such as the products’ condition or the service quality.
Expense reports help to manage employee expense reimbursements, track your business’s spending to identify areas of possible cost reduction, and even identify opportunities for tax deductions.
Due to the level of detail needed in an expense report, small businesses can use accounting automation software that integrates with enterprise software, such as ERP solutions, to streamline the process and automatically create these expense reports.
4. Finance Management
Tax season is an incredibly labour-intensive and stressful period for companies. Tasks can pile up swiftly as all the employee’s race to collect the open accounts. Here are some of the most common problems encountered during this period:
- Detecting, verifying, and correcting errors
- Ensuring compliance with tax regulations
- Retrieving lost receipts and invoices while transferring data from one system to another system
- Identifying anonymous payments
You can easily automate these processes using the functionality in your accounting automation platforms.
5. Accounts Receivable and Accounts Payable
Accounts receivable and accounts payable can significantly impact a business’s cash flow. They’re both an indispensable part of your cash flow statement.
Mismanaged accounts payable can lead to high costs for a business and a bad reputation with suppliers and vendors. On the other hand, companies that don’t manage their accounts receivable run the risk of not getting paid on time, resulting in working capital challenges.
To optimise the accounts receivables account, you must keep track of payments, send payment reminders to customers, and identify high-risk customers as a top collection priority. Accounting software can automate these and other steps in your accounts receivable operations and lower your finance team’s workload.
Benefits of Accounting Automation
There are several ways accounting automation can help your accounting and finance teams. Some of these include:
1. Increased Productivity
Running a company requires routine and regular financial tracking if the business has to stay updated with its financial position and comply with financial regulations. This can take up much time. Automating repetitive and routine tasks can lower the manual labour needed and free up time to analyse data and revenue-generating studies.
2. Improved Accuracy
Accounting automation can result in the accuracy of financial data. By automating the record-keeping process, accounting automation lowers the chances of human error, which manual accounting processes are highly susceptible to.
3. Secure File Storage
Accountancy firms and businesses need to save files for multiple years to meet regulations. Nevertheless, physical files are susceptible to fires, floods, and other disasters. Files stored with accounting software give accountants and businesses a secure way to store files that are much easier to search and organise. Additionally, keeping digital files is less costly than physical storage.
Last Few Words
Even though accounting automation can be time-consuming to set up, it can save companies a lot of headaches and time in the long run. Many companies are moving towards cloud-based systems and accounting automation if they haven’t fully automated systems already. If you need help with getting started, contact us at ISA Consortium right away!
At ISA Consortium, we offer various accounting and bookkeeping services to help you focus on your business goals. Contact us for more information!
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We offer all the above as part of our full Tax Services and Accounting and can also help you with Capital Gains Tax, Inheritance Tax, Retirement Planning, even filling out your Self-Assessment Tax Returns for you.
