What Is Accounting Automation & Why Is it Useful?
Accounting automation can streamline your bookkeeping. But what is accounting automation? How does it work with your existing business and accounting processes? In this post we'll talk about the three levels of accounting automation, how they impact your business, and how they can save you time and money.
What is accounting automation?
Accounting Automation is the process of using software to automate the processes and procedures of accounting. It is a way of improving efficiency and accuracy, while making sure that all aspects of the business are being looked after. Accounting automation can be used for:
- Records storage
- Invoice creation
- Invoice processing
- Invoice payouts
- Audit preparation
- Budgeting and forecasting
Accounting automation can be used in many different situations, from small businesses to large corporations and even government agencies. The main goal is to provide companies with a more efficient way of handling their finances, so that they can concentrate on other aspects of running their business.
6 Benefits of accounting automation
1/ It Eliminates human error
Accounting automation reduces human error because it can be programmed to follow strict protocols when performing any task. For instance, it can be used to automatically reconcile accounts by comparing current bank statements with prior statements, so you won't have to manually check every transaction each month or quarter. It also reduces human error because it can be programmed to automatically enter the accounting entries from the invoices in the accounting software
2/ It Improves data quality
To understand how accounting automation improves data quality, it’s important to understand how much manual work goes into traditional bookkeeping. Accounting staff often spend hours each month manually entering data into different systems and matching up transactions that are made on paper checks against electronic ones. The process can be tedious and prone to human error — especially when it comes time to reconcile accounts with bank statements or other third-party vendors. Accounting software helps eliminate these problems by automating both data entry and reconciliation processes.
3/ It keeps you more organized
Accounting software helps you stay organized by keeping all of your financial information in one place. This means that instead of having to sort through piles of paper receipts and invoices, you can keep everything in one place and easily access it whenever needed.
- Better record keeping – Automation will keep your records up-to-date, so you don't have to worry about missing any important transactions or tax deadlines.
- Easier bookkeeping – You can use accounting software to track all of your income and expenses, which makes it easier to fill out tax forms at the end of the year.
4/ help with regulatory compliance and reporting
By providing you with accurate information at your fingertips, accounting automation provides you with an accurate view of your financial position so that you can easily manage your business. The software also allows you to create reports that meet regulatory requirements while also helping you save time on preparing them manually.
5/ It Ensures compliance with internal controls
Accounting automation is used in all organizations to automate their financial processes and to improve efficiency in data handling. Accounts payable, accounts receivable, payrolls, fixed asset management, cash management and general ledger are some of the areas where accounting automation can help reduce manual effort considerably. It also helps in speeding up the entire process by ensuring accuracy at every stage of the process.
6/ IT Makes it easier to share information and collaborate with others across your organization
Accounting automation enables organisations to transfer data between multiple systems or applications using software tools that automate repetitive tasks. This allows you to connect accounting software with other systems in your organization — including CRM, HR and eCommerce — so that you can share data more easily between them.
The biggest benefit of accounting automation is that it makes it easier for accountants and bookkeepers to review their clients’ financial data in real-time. This makes it easier for them to make informed decisions about tax planning, billing and other important aspects of running a business. It also helps you stay in compliance with the law and reduces the amount of time it takes to complete certain tasks like reconciling accounts or producing reports.
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How to move forward with accounting automation
Accounting automation is a great thing. It saves you time, frees up your employees to do other things and gives you more control over your finances. If you're just starting out, you may not know exactly how your business will grow or how much work will be involved in keeping up with it. You also don't know what kind of accounting system would suit your needs best.
If you're looking for an accounting automation solution, here are some tips:
- Consider your needs. What do you want to automate? Do you want to automate invoicing and billing or focus on accounts payable and receivable? Do you need accounting software to run an entire business or are you just looking for a better way to manage your personal finances?
- Know what features matter most. Some solutions offer everything from financial statements, inventory management, payroll services and more all under one roof. Others specialize in just one area so make sure you know what features are important for your business before shopping around.
- Look for a system with an intuitive user interface that doesn't require extensive training on how to use it (or else train yourself!). Having an easy-to-use program ensures that all of your employees will be able to access their information quickly when they need it most (and won't have to wait around while someone else figures out how).
- Think about your budget. You don't need to spend tons of money upfront in order to find the right solution, but there are many great options that cost a few hundreds per month — and they're well worth it if they help your business run more efficiently.
For example, if you're running a small business that requires only basic bookkeeping and invoicing, then a basic plan may be a good choice for you. On the other hand, if your business grows into something bigger and more complex over time but doesn't require specialized software, an Expert Plan might work well since it includes all the basic features needed by most small businesses at a reasonable price.
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