Automation is quickly taking the whole business world by storm. With the help of technology, companies can now automate repetitive and time-consuming tasks using a bot or system. This enables employees and staff to focus on more high-value, high-impact tasks.
A recent study shows over 57% of employers believe that automation exists to augment worker performance and productivity. Hence, automation is now entering every part of business operation—marketing, sales, customer service, human resource, and even accounting.
What is accounting automation?
In a nutshell, accounting automation uses digital software-enabled automation to assist in the accounting process. Today, many accounting staff will know the hassle of having to deal with repetitive administrative tasks that can eat up hours of an Accounting professional’s workweek.
But by using software that can automate this process, they can become more efficient at what they do and therefore have more effective accounting practices and departments.
A study by McKinsey shows that 37% of businesses have already fully automated at least one business function, and 66% are already piloting solutions to apply automation to the way they do business.
The goal of accounting automation isn’t to replace accounting staff. Instead, it’s to remove repetitive work that doesn’t provide much value to an accounting department or the business as a whole. Some tasks that can be automated include reporting, approval processes, payslip creation, notifications, and others.
Benefits of accounting automation
So why do companies and Accounting professionals need to look into applying accounting automation into their workflow? There are many advantages of automating accounting process workflows, but here are some of the most common ones that will compel even the most tech-allergic accountant to give it a shot.
Increase in productivity
The goal of any business unit is to chase after productivity before familiarity. Sometimes people don’t like digital solutions because it feels unfamiliar. But with a bit of open-mindedness and a willingness to learn new tech, solutions like accounting automation will help make teams more productive.
By removing repetitive low-impact work, Accounting teams can pour more time into more important and urgent matters. And as more time goes into high-value tasks such as strategy, systems development, consulting, and business planning, Accounting departments can become more productive.
Decrease in human error
Dealing with numbers is a tedious task that requires the highest level of precision. It only takes one misplaced decimal point or one missed item to have an erroneous report. Sadly, with complete dependence on human systems, we’re also more prone to human error. One of the other accounting automation benefits is the reduction of human error. The lesser the error, the more efficient Accounting departments can be when reporting the numbers.
Digital systems, especially those with a proven track record, also provide the added value of information security. The common misconception about digital tools is that they’re less secure than traditional filing systems. But with the right tools in place, data security can improve with accounting systems that provide automation. In addition, the cloud revolution has made it all the more possible for teams to access the same database anytime, anywhere, and without the fear of losing data to hackers and scammers.
Speaking of cloud databases, another benefit that these kinds of systems provide is mobility. It was once unthinkable to imagine companies decentralized proximity-wise and working without a physical office. Remote working is on the rise, and cloud-based technologies make that happen. Additionally, building on cloud-based software and setting up automation enables effortless functioning no matter where a staff member might be in the city, country, or even world.
Professional upgrade and development
With more time on their hands, Accounting professionals can focus on something that can enrich their careers the most—education and development. Now with automation in place, accountants can find the time to do that. In addition, they can augment their finance degree or accounting certification by adding more educational experiences, new learnings, and development programs.
Improved employee experience
Accounting automation doesn’t only serve Accounting staff. It helps the whole company. Automation can take care of specific processes that might overlap between accounting and operations, making activities like approval, reporting, liquidations, and so on much easier with nothing more than a few software commands to get the job done.
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How businesses can leverage accounting automation?
So let’s talk about specific use-case scenarios for accounting automation in a business. Here are some practices or activities that accounting automation can boost.
A lot of uncelebrated work goes into payroll management, including payslip creation. Accounting departments often have to go back and forth with human resources to compute things like taxes, deductibles, leave credits, bonuses, salary increases, and so on. Accounting automation can do all this semi to fully-automatically.
Getting that budget approved by the Accounting department can often take anywhere between a whole day to a few days. But automation makes approval processes easier for accountants and the entire company. For example, this automation can help determine whether some fields are missing or whether totals don’t add up right, saving countless hours of needless back and forths.
Sound accounting doesn’t just manage the money coming in. It also manages the money going out. Companies spend money on things like marketing, manufacturing, logistics, travel, and so on. Using artificial intelligence in expense reporting helps remove manual computations and formatting. This helps Accounting professionals save time in the process. AI can also take care of receipt aggregation, bulk physical receipt scanning, and so much more.
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Managing and reconciling one corporate card can be a lot of work already. But what if a company has more than one corporate card to manage? Having accounting automation systems in place streamlines multiple card management for all services, including American Express, VISA, Mastercard, Diner’s Club, and so on, in one central database.
More importantly, accounting systems can also be used to add alerts and parameters to the corporate card use. This ensures maximum stewardship on these forms of accounts payable that could leave the company in financial ruin if not monitored well.
Have you ever tried managing a personal home budget? Well, accounting is like managing that on steroids. Companies have budgets to stick to, and it’s up to the Accounting management committee to help keep that budget in place. Various accounting automation tools can help in that process by categorizing and assigning budgets per project, representative, or department. Automation can also help create budget timelines and set up customized alerts for when expenses come close to the budget constraint.
Another tedious responsibility that accounting automation can streamline is various compliances for government and non-government audits. For example, automation can help build digital audit trails that ensure complete documentation of all actions and expense reports. It also assures everyone complies with policies like receipt compliance, anti-fraud strategies, and so on.
The last application has to do with using digital accounting programs to aid in payments. Accounting staff can pay out salaries, fees to contractors, suppliers, utilities, and more through these services. Given that these systems integrate with the whole accounting system, the program will automatically log expenses for compliance and reporting.
Empowering remote teams with powerful automation
Six out of ten companies are planning to use automation soon, so there isn’t anything to stop us from discounting the impact of automation on accounting.
The goal of automating financial processes for remote teams is to ensure compliance to the highest standards no matter where your team might be. So if you haven’t considered automating your accounting or expense management in the past, maybe it’s time that you started looking into it.