Automation in accounting is a widely discussed topic right now. Accounting automation refers to automated input, processing, and reporting of financial data. It uses robotic process automation (RPA), artificial intelligence (AI), machine learning (ML), and more technological advancements.
Automation can empower your accounting department with faster and better operations. These modern tools help accounting professionals get rid of repetitive tasks and make the best use of their time.
In this article, we’ll discuss some of the core benefits of accounting automation. Without further ado, let’s jump right in!
Saves time
Whether your organization is an accounting firm or a general business, automation can save you a significant amount of time. It drastically reduces the number of manual journal entries required in every segment of your account process.
Think about dealing with invoices. Processing them manually means a part of your workforce is engaged in identifying, clearing, and journaling invoices. Using an automated invoice receipt system will save a ton of time in this case.
The same with accounts receivables, payables, and financial reporting. With an automated accounting process, all of these data are entered into the system as soon as they are available in the funnel.
Got an invoice to send? An automated accounting service will take data right from that invoice. You don’t need to re-type the data that is already typed by someone (or something) else!
Automation can save you time in every accounting process, and beyond. All of these translate into greater productivity for your team members. Time is money. You can save both with automated accounting.
More accuracy
Well, it may raise a “man vs. machine” question. But let’s face the reality. If instructed properly, machines can work more accurately. When you use accounting automation, it will do the data entry tasks algorithmically. It’s supposed to be more accurate than manual human inputs.
In standard accounting tasks, most human errors occur while entering data into relevant fields. Typo is also an issue. Your accounting teams can reduce these errors to zero with a properly configured automated accounting system.
Numbers don’t lie. But if you fail to enter the right number into the right field, it can be worse than just a “lie”. An incorrect number can cost you a fortune with inaccurate financial statements and forecasting. Accounting automation opens a door to more accuracy and superior financial reporting.
Faster access to data
We know, you may have been using Excel files to do some calculations with formulas. But this is not what it’s called accounting automation today.
Here’s the deal. With Excel files, you’re basically using some templates to calculate numbers in some columns or worksheets. Usually, there are several spreadsheets for different reports. They don’t talk to each other.
With a cloud-based accounting automation system, your entire accounting department is connected. Each of the transactions can be reflected in your financials in real-time.
All of the data and files are stored in the cloud. That means you can access them whenever you want from wherever.
In manual accounting, it needs a considerable amount of time to prepare a sharable report because of its scattered and offline nature. Accounting automation makes it a breeze to access financial data using any device.
Enhanced security
Data security is crucial in every stage of accounting. It’s not only about keeping the data safe, but also ensuring the quality.
With human inputs, there’s always a bigger risk of mistakes while entering data in the accounting tools. Accounting automation can mitigate this risk to the minimum possible extent.
Automated accounting services provide secure cloud storage to store your data and reports. You can retrieve and share files easily from these services. Many government authorities now accept digital documents. It makes things easier with your accounting department.
Analytics & insights
You know what, accounting is not just about calculating some numbers or reconciling the ledger. It’s far more than that when you go automated. A good accounting software stack will offer extensive data analytics and insights.
It can generate forecasting and financial modeling based on your existing data. These in-depth reports uncover any inconsistency and trend that you need to be aware of. Plus, your team members can use all of these data for further analysis and actions.
Better cash flow management
Automation can ensure a healthy accounting protocol which is extremely important for better cash flow management. This is a must to scale and expand any business.
As a business owner or manager, when you don’t have an accurate idea of how much you’re generating and how much you’re spending, you’re exposed to a risk of a liquidity crisis. With manual accounting, it requires notable efforts and time to get an up-to-date picture of the cash flow with forecasts.
The good news is, automated accounting work can provide you a clear scenario of your cash flows any time you want. So it will never be late to take action and save your business from any potential issue caused by an undesirable cash flow trend.
Improved customer experience
Accounting automation can radically improve the customer experience of a business. Think about a superstore. It may offer different amounts of discounts on various products. The percentage of VAT can also vary.
With manual calculations, this will result in more waiting time for the shoppers. Also, the data needs to be entered into different financial reporting documents thereafter.
But an automated accounting system can do it in seconds. Here’s the magic of improved customer experience along with more efficiency for the staff.
Conclusion
We hope you’re convinced that accounting automation has a whole lot of goodies for the accounting department of any organization. Are you in the accounting profession? What do you think about accounting automation? Please share with the community via comments!