What are the Benefits of Accounting Automation in 2022?
In a world where time is money, accounting automation has become indispensable to businesses of all sizes.
But what exactly are the benefits of accounting automation?
To sum it up, accounting automation helps companies manage their finances faster and better, allowing them to focus on growing their business instead of spending time managing their books. More specifically, accounting automation allows companies to automate processes like payroll, inventory management, and financial reporting.
This article will discuss in depth what exactly accounting automation is and predictions of how it will benefit businesses in 2022.
What is accounting automation?
The term “accounting automation” is used to define the process by which data from different sources is collected and analysed to create reports for financial management purposes. This process is done online or by using software programs as opposed to manually. Gone are the days of spending hours or even days inputting data into spreadsheets.
Cloud computing is the storage of files online so that they are accessible securely anytime and anywhere. It is an integral part of accounting automation.
Many processes can be automated such as:
Bookkeeping
Invoicing
Reconciliations
Categorising expenses
Oftentimes, the accounting automation process end result is a report that helps users understand how they are doing financially. Ultimately, this means that accountants are able to complete work faster and business owners gain a greater depth of understanding of the financial health of their business.
What are the benefits of accounting automation?
Automation offers several benefits to small businesses.
Saves time and increases productivity
Running a business requires regular and routine financial tracking if the business is to be both aware of its financial position and compliant with financial regulations. This is undoubtedly time-consuming. By automating routine tasks, a business can reduce the manual labour required and free up time for analysing data as well as revenue-generating activities.
Improves accuracy
Accounting automation increases the likelihood that financial data is accurate. By automating financial record-keeping, accounting automation reduces the risk of human error which manual data entry is always vulnerable to.
Cloud access
Long gone are the days of large rooms filled with dusty files. Accounting automation and cloud computing mean that important financial data is securely accessible anytime, anywhere. This also means that employees can simultaneously work on files even if they are in different locations.
Safe file storage
Businesses and accountancy firms are required to save files for several years to satisfy regulations. However, physical files are vulnerable to floods, fires, food spills and other disasters. Files stored with accounting software give businesses and accountants a safe way to store files that are also much easier to organise and search. In addition, storage of digital files is much less expensive than physical storage.
Cost reduction
While the initial set-up of accounting automation may require an outlay, money will be saved long-term in two ways. First, accounting automation reduces the time needed for manual entry tasks and, second, it reduces the time an accountant will need to spend on financial information because it will be well organised. As a result, over time, accounting automation will save money.
In addition, accounting automation reduces the risk a fine related to inaccurate data entry will ever be incurred and need to be paid.
Increases productivity
Accounting automation increases productivity and job satisfaction. Accountants often spend hours every month updating their books. By using accounting automation software, tedious tasks are reduced and sometimes even eliminated. In addition, learning to use various software programs often leads to personal growth.
Reduces risks
Using accounting software to automate tasks reduces the possibility of inaccurate data by reducing the risk of human error or even purposeful data manipulation.
Better cashflow management
Cashflow management is oftentimes key to business success. Automation helps accountants easily track what is payable and receivable for a company. This, in return, means business managers can gauge how liquid their company is.
Efficient operations.
Accounting automation allows small businesses to operate efficiently and to make sound business decisions. By automating the way financial data is processed, key metrics can quickly be pulled together to measure the overall health of the business. This essentially gives even the smallest business owner a financial dashboard from which to make important decisions.
How do you automate an accounting process?
Once a business decides they want to start automating their accounting process, there are many ways to get started. Here are just a few examples:
Use cloud-based accounting software. Cloud-based accounting software such as Xero and Sage are available online. These programs allow users to access their accounts anytime, anywhere. They also provide security and backup options.
Implement accounting software on a mobile device. Mobile devices have become popular among small businesses because they are portable and easy to use, especially for clients. Most accounting software programs are compatible with smartphones and tablets.
Create custom solutions. If you don’t like how your current accounting program works, there are other options. For example, you could develop your own in-house accounting system.
Work with a “digital accountant”. Many accountancy firms now have dedicated IT consultants or even departments dedicated solely to ensuring that technology runs smoothly for their firm and clients. Likewise, accountants, oftentimes now known as “digital” or “cloud” accountants, spend valuable time with their clients teaching them how to automate their finances.
Although automated accounting can be time consuming to set up, in the long run it can save companies time and headaches. This is why most companies are moving toward cloud based systems and accounting automation, if they haven’t completely automated systems already. The benefits are many, all that needs to happen is to take the initial step to get started!
