Many companies remain stuck with outdated processes in accounting. They rely on Excel spreadsheets, circulating them among employees for updates and distribution of changes. They steadfastly adhere to manual approvals, a process that can take days, weeks, or even months for a simple sign-off from busy executives. And they anxiously await the inevitable human error that could create an accounting minefield.
Needless to say, all of this can hinder a company’s growth. However, accounting automation opens the door to a better reality. With the help of modern technologies, some routine processes can be automated, reducing your time. This article discusses 5 such processes:
Data Entry
Every business, regardless of scale, processes invoices. Many organizations have accounts payable teams responsible for making payments on behalf of the company. With numerous incoming invoices, having a system to receive, verify, confirm, and pay these invoices within the right time frame is critical. Failing to process an invoice on time could result in losing a major supplier or incurring interest on accounts payable, depending on your suppliers’ terms. Manual processing of these invoices is prone to errors due to the high volume received each month. However, automation solutions, using OCR and AI technologies, can accurately recognize data from your invoices and transfer it directly to your accounting system. The most modern solutions not only recognize data but also match it with your accounting system, allowing you to upload hundreds of documents simultaneously with high accuracy.
Payroll Management
Managing employee payroll is a tedious task for an accounting team, often occurring as frequently as every week. It involves scheduling payments with your bank, calculating the right amounts to pay, and adhering to various state and federal payroll management and reporting regulations. Automated payroll solutions handle the calculation of net pay for each employee, disbursement of paychecks, and data input to the accounting system. They also comply with tax requirements applicable in your jurisdiction.
Expense Management
Expense reporting is a painstaking aspect of accounting’s workflow. Traditionally, these reports involve handwritten or printed-out Excel spreadsheets with stapled receipts, physically submitted to a company’s accounting department. By automating expense management, you eliminate the need for paper receipts. Some software can automatically fill out and route expense reports, and integrate with payment platforms to capture and store transactional data.
Bank Reconciliation
Reconciliation, matching your accounting records with bank statements to identify discrepancies, is a crucial part of accounting. Many finance leaders view this as a task requiring human judgment, but it can largely be automated. Bank reconciliation tools check your records much faster than manual processes. These solutions securely log into your online banking platform, generate reports, download bank statements, and then compare this data with transactions in your ERP system. They can also automatically send daily reconciliation reports to your accounting team, highlighting unreconciled transactions for follow-up.
Accounts Receivable
Accounts receivable (AR) is vital for small and midsize businesses, directly impacting revenue streams. This process, involving invoice issuance and tracking, and collaboration with multiple teams, is time-consuming and error-prone. Automating AR generates accurate invoices against sales records, expedites approvals, and issues timely payment reminders to customers. Dedicated AR tools can accelerate payments with less effort, automatically pulling reports from unpaid invoices and initiating revenue collection.
The transition to accounting automation is a natural step, similar to moving from paper to spreadsheets. This shift may pose a risk to less qualified accounting roles, which could be automated. However, it’s important to remember that the value of accountants lies in their ability to analyze, interpret, and gain insights from data to drive better business decisions. For everything else, it’s beneficial to harness technology to work for businesses and our customers, rather than the other way around.
What processes have you already automated in your work? Please share in the comments
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