A Guide to Automated Accounting

Mark Cohen
Posted by Mark Cohen on Aug 16, 2023 10:57:24 AM

The key to survival in today's fast-paced business landscape? Accounting automation.  

It’s an innovative approach that optimizes processes, minimizes errors, delivers real-time insights, and eliminates manual tasks. 

In this article, we will take a closer look at accounting automation and the tasks it can take off your plate. We will also explore the benefits of cloud software solutions.  

What is Accounting Automation?  

Accounting automation involves using software and technology to streamline and automate financial and accounting tasks that are typically done by hand.  

The goal of automation in accounting is to reduce repetitive, time-consuming manual processes, which in turn, will enhance efficiency, accuracy, and productivity for the accounting department.  

Accounting automation can cover a wide range of tasks, including data entry, bookkeeping, invoice processing, expense management, financial reporting, and analysis. By leveraging automation, organizations can accelerate their accounting processes, gain real-time insights into financial data, and improve decision-making. 

Key features of accounting automation include: 

  • Data entry and bookkeeping automation 
  • Invoice processing automation 
  • Expense management automation 
  • Financial reporting and analysis 

To take advantage of these automated features, many people use cloud-based accounting software, which allows for remote access, collaboration, scalability, and seamless integration with popular automation tools. 

What Accounting Tasks Should Be Automated First?  

There is no straightforward answer to what accounting tasks should be automated first. However, if you are in the process of implementing accounting automation, remember to prioritize tasks that will save you time, reduce errors, and improve efficiency.  

The best way to pinpoint areas that need automation is to assess your accounting needs.  

  • What functions need to be improved? 
  • Will you see significant benefits once it’s automated? 
  • Will the tools needed for automation integrate with your existing systems?  

Make sure you have a gradual and well-planned approach to automating your accounting to see the most efficiency and improved financial management. 

Top Tasks for Automation in Accounting 

While the below list isn’t all-inclusive, it covers the most common areas where automation in accounting can produce the most benefits. 

1. Data Entry and Bookkeeping Automation

Data entry is essential but can be the most time-consuming task in accounting. Data entry automation removes the manual component, which brings a variety of benefits to your accounting processes: 

  • Increased accuracy 
  • Time savings 
  • Improved efficiency 
  • Enhanced data security 

Automated bookkeeping software, on the other hand, is a powerful tool that facilitates data entry and maintains financial records. It handles tasks like: 

  • Recording transactions 
  • Updating ledgers 
  • Reconciling accounts 

With automated bookkeeping software, you can expect these features: 

  • Integration capabilities 
  • Categorization and tagging 
  • Real-time reporting 
  • Audit trail and compliance 

2. Invoice Processing Automation

Invoice processing is crucial in the accounts payable workflow. It involves receiving, reviewing, and approving invoices before making payments to vendors.  

When you automate your invoice processing, you can expect: 

  • Faster invoice capture 
  • Automated approval workflows 
  • Early payment discounts 
  • Reduced paper dependency 

3. Expense Management Automation

Expense management automation streamlines the process of submitting, reviewing, and approving employee expenses.  

You’ll notice several benefits, like: 

  • Easy expense capture 
  • Policy enforcement 
  • Swift reimbursements 

4. Financial Reporting and Analysis Automation

Automated financial reporting tools can generate reports in real-time. This allows you to have up-to-date insights on the company’s financial performance and make timely, strategic decisions. 

With an automated financial reporting tool, you’ll be able to take advantage of:  

  • Automated data collection 
  • Customizable templates 
  • Scheduling and distribution 
  • Data visualization 
  • Comparative analysis 
  • Predictive analytics 
  • Data accuracy and consistency 

Benefits of Cloud Software Solutions 

Cloud software solutions are the premier way to automate your accounting. It offers a wide range of advantages to businesses. Here are some of the top benefits:  

  • Accessibility and flexibility: Cloud software is accessible from anywhere with an internet connection, allowing for remote and collaborative work. This feature enhances productivity and lets teams stay connected and work on projects in real time, regardless of their location. 
  • Cost savings: Cloud software is typically subscription-based, meaning you only pay for the resources and features you need. 
  • Data security and backup: Good cloud providers prioritize data security and have extensive security measures in place. Most also offer regular data backups, ensuring data is safe and recoverable if the system fails or there is a disaster.  
  • Scalability: Cloud software solutions can scale with growing businesses. As the number of users or data storage requirements increase, the cloud will adjust with it. 
  • Collaboration and file sharing: Cloud software is extremely collaborative and allows multiple users to access and edit documents simultaneously. This reduces version control issues, making teamwork more efficient. 
  • Seamless integration: In most cases, cloud software integrates with other cloud-based or on-premises apps, which creates a seamless user experience.  
    • For example, Katana is a cloud manufacturing platform that integrates with QuickBooks Online and Xero. While the manufacturing business receives the benefits of cloud accounting software, they can also integrate core manufacturing tasks like inventory and production management.  

With so many glaring benefits to accounting automation, it’s no surprise that so many businesses are pushing its use.  

Topics: Modern Bookkeeping


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