Automated Accounting: The Next Step
Digital accounting is not a new concept. It’s roots can be traced right back to the 1950s with the invention of the UNIVAC (UNIVersal Automatic Computer). This machine used magnetic tape as a data store – rather than ‘traditional’ punch-cards. This revolutionary invention took over 40 hours to finish payroll for one of GE’s factories, but the innovation it brought about cannot be understated.
The advances we’ve seen since then are enormous. But within the past decade the huge uptake in cloud computing and improvements in data access have truly changed the game. Now, accounts teams can access data securely, from anywhere, at any time. They can analyse massive data sets with an ease scarcely imaginable even 10 years ago.
But digital accounting continues to evolve. The next step? Automated accounting. It takes digital accounting to the next level and leverages technology to provide benefits that impact, not just accounts departments, but entire businesses.
What Is Automated Accounting?
First and foremost, automated accounting can save time on routine tasks. But its real value is the fact it can handle complex processes, such as payroll, expenses management, and tax reporting. All of these can indeed be automated – with the right planning and high quality data.
But how does it work? How can it be applied? Let’s see.
Top Accounting Tasks to Automate
One of the most time-intensive activities for any accounts team is managing expenses. Collecting all the necessary information from staff, ratifying it, and getting sign off from management traditionally takes a huge amount of time. With automation, the accounts team receives cross-checked supporting documents that comply with local regulations and internal policies. With these in place a bot can extract all the required information for bookkeeping and reimbursement.
Any accounts team knows the importance of keeping invoicing up to date and chasing overdue payments. This is vital in aiding cash flow within the business – but it does take a lot of time. An automated system can automatically generate invoices from sales orders and can even send follow up emails automatically on their due dates. As this is done digitally it can also be instantly stored, forming part of your financial records.
The dreaded T word can strike fear into the heart of any accounts team! But there’s no getting away from tax returns. And they must be completed correctly and submitted on time. However, if you’ve been using automation for invoicing, expenses, and payments then this digital trail can be picked up by a bot, which can then provide all of the information needed for your next tax assessment – all of the data on-demand.
Of everything on this list, if you work in accounts you know that payroll is probably the biggest headache you have every month. There are so many things to consider: hours, benefits, taxes etc. All that must be documented. Thankfully, automation is perfect for this type of task. Bots can sift through huge amounts of data and align it with payment parameters, like wage rates and overtime amounts, without breaking a sweat.
A lot of bookkeeping involves backtracking on work other people have already completed. Whether you’re hunting down invoices and receipts, or identifying payments already taken, it’s always about playing catch up. However, automation offers a way for data to be constantly drawn from all areas of a business – ready for the accounts teams whenever they need it.
How Accounting Automation Helps Businesses
As you can see, the possibilities are numerous. But the knock-effects of automation reach much further than the finance team.
At the top of the list are the time savings automated accounting can offer your teams. Less time spent on these tasks frees up accounting teams to apply their expertise to other areas – such as financial planning and forecasting, building better insights, and creating new revenue streams. They can work on the more nuanced tasks that a bot simply can’t carry out.
Depending on the size of your accounts team you may well have people whose role it is to just handle data processing. By using bots to handle your data you can remove the ongoing cost of personnel dedicated to these tedious tasks. A study found that on average it costs $30 to manually process an invoice but just $3.50 if the process is fully automated.
While digitisation has made analytics far more accessible for accounts staff, automation takes it to another level. Just think that while you write an email requesting a report from another department, a robot could have gathered data in a fraction of that time. Business intelligence is a big part of successful modern businesses – and automation can help drive that forward.
One of the key features of a good accounts team is a meticulous eye for detail. That being said, we are all human and data entry mistakes do happen. Provided you feed it good quality data, a robot will replicate any entry with 100% accuracy. Knowing that all of your financial data is on point means you can more confidently make decisions in every aspect of your business.
Financial information needs to be highly secure as breaches can expose all kinds of confidential data. Accounting automation tools can help identify attacks on your systems, as well as notify critical staff day and night. This layer of support is round-the-clock – and needs little oversight to offer a lot of protection.
We know that bots don’t have to rest like humans. They can work at the same pace continuously – 24 hours a day, 7 days a week. This means once you have invested in their design and implementation, they are always working – maximising your ROI and continually providing all the benefits we’ve already mentioned.
All things considered, there can be no doubt that automation offers so many ways to improve accounting. With the right set up, any business can apply the tech and see an immediate return on their investment. And looking ahead, it makes sense to start exploring the possibilities now, in order to stay ahead of the curve and ride the wave of digital acceleration.
In a few years – who knows – maybe automation will look just as archaic as UNIVAC? But for now, saving time, money, hassle, and giving accounts teams more capacity and opportunity to shine seems like a good place to start.
The business world is definitely on the move again – and we’ve got the receipts to prove it. The global pandemic had far-reaching consequences for businesses in every industry sector, from finance to manufacturing. Restrictions on travel and mass gatherings meant the cancellation or postponement of industry conferences, and sales meetings. But there are signs..