When you hear the term “automation,” you may immediately jump to thinking you’re becoming obsolete in your role—some employees have genuine fears of having their functions replaced by computers. And for some, those fears may be legitimate.
But when it comes to the accounting profession, the automation of accounting processes is designed to help accountants be more effective, efficient and productive, not eliminate the need for these valuable workers.
To get the best out of any employee, you need to equip them with the best tools. You wouldn’t want a cinematographer working with a third-rate camera. And as a business owner, you wouldn’t want an accountant to be hung out to dry with an insufficient accounting tool. Giving finance departments the best automated accounting software allows your accountants and other finance professionals to focus on more strategic tasks and gives them the peace of mind to do their jobs efficiently.
What is bookkeeping and accounting automation?
Accounting and bookkeeping automation is the process of using software and AI to convert a traditionally manual process into instantaneous and optimized workflows. Bookkeeping and accounting automation eliminates the need for manual tasks, such as data entry, and allows accountants to focus on more important tasks.
Bookkeeping and accounting automation eliminates the need to spend all day creating templates, complex ledgers and entering row upon row of data into Excel spreadsheets. Instead, there are built-in formulas that allow finance teams to create reports quickly and more efficiently. Repetitive data entry and calculation check tasks are streamlined through machine learning, allowing accountants to prioritize bigger-picture goals, rather than getting sucked into monotonous tasks that can feel like a waste of time, even if they’re critical.
Why you should use bookkeeping and accounting automation
Bookkeeping and accounting automation comes with many benefits. Here’s a look at the pros of accounting automation if you’re looking to invest in such a tool as a business owner:
Save time and money
Time is money, so saving one will inherently help you save on the other, making automated accounting a two-for-one in savings. Entering financial data and information, checking calculations, running reports and other repetitive tasks can waste valuable time and pull you and your finance team away from more important tasks like data analysis.
If you’re a large enough company that you’re outsourcing to an accounting firm, you’ll have fewer billable hours, and if you have in-house accountants, they’ll be able to be more productive. The insights you gain through automation can help you with better financial decision-making in the immediate and long-term.
Be more efficient
Automated accounting helps cut back on the human error that comes with manual data entry, especially when you’re inputting a significant amount of financial data. Integrating your current accounting workflow into an automated accounting software can help you make sure your reports are accurate with little effort. You’ll still need a good accountant to take a look at things and verify that the work is accurate, and if necessary, manipulate the data.
Automation also offers an upgrade to cash flow management and makes filing taxes exponentially easier. You can track receipts and taxes as well as maximize deductions by using an automated accounting tool.
Speed up access to data
Accounting software is designed to centralize documents and ledger items, making the process of categorizing, naming and storing files easier, and thus, making documents easy to find in a pinch through secure cloud storage.
A bevy of options to choose from
There are endless accounting and bookkeeping automation tools and software to choose from, which can be overwhelming. If you’re looking for the best accounting automation tools, check out our article on the best accounting software for small businesses.
What to look for in an automation tool to help you close your books faster
Closing your books at the end of the month is a necessary and important process for bookkeeping. But completing this process manually opens you up to a plethora of issues and can take hours, if not days, to complete. When looking for tools to automate your month-end book closing, be sure to find solutions that offer the following:
- Direct integrations with accounting tools: having to manage disconnected systems is one of the biggest pain points accountants have to navigate every day. To alleviate this, try to find an accounting automation platform that has direct integrations with the accounting tools that you use, whether it’s Quickbooks, Xero, Netsuite or any software of your choosing.
- Real-time transaction syncing: one of the biggest challenges of traditional manual bookkeeping is just that, it’s manual. This leaves you with very large gaps in your transaction tracking because you’re always at least a few hours behind. To help, look for finance automation tools that give you real-time transaction syncing. That way, you can know exactly how much your business is spending, down to the minute.
- Automated categorization for merchants and categories: automation is all about speed and efficiency. With that said, what’s more efficient than automatic categorization and mapping? Whether it’s by merchant or department, look for an accounting automation platform that allows you to easily and quickly create merchant rules that automatically sync to your GL.
- Support for multiple subsidiaries: if you’re a larger business, the last thing you want is to have individual subsidiaries that don’t connect with one another in any way. To help combat this, be sure to use an automation tool that allows for multiple subsidiary support to help you stay organized and clear.
Which accounting processes should you automate?
Expense automation can make life easier for everyone in your company. Your accounting department is able to limit the amount of time spent tracking business expenses, and your other employees are spared from the dense administrative work involved with filing expense reports, allowing them to focus on accounting tasks more relevant to their immediate job responsibilities.
Purchasing and spend management can come with much paperwork, like purchase orders, contracts, etc. An automation service can help streamline all those documents and make sure you don’t lose any important information.
Minor operating expenses like travel and mile reimbursement can be a burden to productivity across the board. Automating these business processes can make sure employees are good to go before they head out on a business trip and won’t have to wait to get reimbursed.
Efficient accounts payable processes are key to running a smooth business. Supply order, payments and invoices can get tied up in AP, but automating this process can make it easier to track each of these.
Your accounts receivable team is in charge of the money coming in for your services, so it’s vital to your company’s success to be a well-oiled machine. AR needs to make sure invoices are handled efficiently and disputes are resolved quickly. Automating this process can help save time and money and ensure that you have consistent, predictable cash flow.
Payroll is crucial to get right, and growing companies can be consumed with payroll if they don’t have automated software to help. Manually processing payroll every pay period can be a major time suck for someone who could be spending their time on other HR or operational tasks. Payroll automation, however, is more efficient, cost-effective, and reduces human error.
According to an Adra Match survey, 90% of respondents said they were under pressure to close more quickly, while just 39% said they were satisfied with the quality of closing and a mere 28% said they trusted that the numbers they closed with in their month-end report were accurate. Needless to say, that’s worrisome. But it doesn’t need to be. Automating this business process not only can relieve stress from folks handling monthly closes but also can ensure that you’re providing the most accurate report possible.
Make accounting and bookkeeping easier with automation
Accounting automation is just one part of finance automation as a whole. It’s the way of the future not because it will replace accountants, but because it will help accounting teams and other members of finance departments become more efficient. Accounting automation can eliminate the tedious, repetitive accounting tasks, and instead allow accountants to prioritize communication, management accounting and strategizing.
Ramp is a tool for finance teams that does just that. Ramp’s expense management software and corporate card can help you and your team get a handle on your business finances and bookkeeping with best-in-class integrations for more than 30 popular accounting tools, including QuickBooks, Xero, NetSuite and Sage Intacct.
And with Ramp, you get all of the perks, including best-in-class customer support, accounting integrations, and more for free.
Learn more about Ramp today.