Last Updated on Mar 12, 2022 by James W
With spiking technological advancements, automation has become the talk of the town. After streamlining processes in the manufacturing sector, it is paving its way in the corporate world. Besides automating repetitive business functions, it is improving money-management practices. After all, the process of measuring and analyzing business finances can be pretty confusing and tedious if not done correctly. In fact, it also exhausts the company’s resources.
As a result, accountants are utilizing trivial number-related software to maintain records. Although these can adjust all changes automatically, they aren’t a full-stack solution for managing finances. At some point in time, accountants find it arduous to apprehend data from hundreds of columns and sheets. Therefore, it is high time that companies move towards accounting automation. It reduces human errors, redundancies and handles inefficiencies of incompetent financing practices.
Above all, automation can save a lot of money and allocate funds proportionately amongst every department, leading to better financial management. Are you ready to bid goodbye to old-school accounting practices? If yes, let us assist you in this endeavor, have a look below.
How to Automate Accounting Processes?
As a business leader, you should keep looking for ways to enhance financial intelligence. Indeed, automation tools and applications can improve accounting processes, but any idea, how to manage them? Accounting software and applications can be tricky, especially if you don’t know much about numbers and finances. Thus, before jumping to conclusions, ensure your employees have the expertise to operate the automated software.
You can either offer training programs or encourage employees to pursue higher education. With e-learning opportunities, people can pursue a masters in accounting online and strengthen their grip on accounting fundamentals and processes. They will get to learn about Fin-tech and other modern-day applications that foster automation. Once you have a competent team of accountants, feel free to integrate technology. Here we are listing five tips to automate the accounting process without disrupting the company’s existing financial operations.
1. Track invoices digitally
Undoubtedly, paperwork can be pretty hectic. Accountants have to search through piles of documents to find invoices and ensure timely payments. Fortunately, online invoicing systems can save you from this hassle. It can track all invoices in one-go, informing which client’s bills are due in the coming week and month. Hence, you can set automated alerts to remind clients regarding their payments. As soon as the customers clear their bills, the software will automatically update all financials.
Additionally, automated invoice systems can also offer payment solutions. Clients can clear their pending bills using their debit or credit cards, eliminating the cheque clearance problems. In turn, the money would get deposited into your account right away.
Moreover, accountants can adjust the software as per their cash requirements. In case cash flows are running in the negative, the software can be programmed to offer discounts to clients if they make early payments.
2. Utilize smart stock purchasing
How incredible would it be if an accounting system helps entrepreneurs with stock purchases? In today’s tech-driven world, everything is possible. The inventory management systems can analyze the company’s stock history and provide more apt stock purchasing decisions. For instance, if your business has a lot of cash tied up in inventory, it can devise stock plans. Thus, making sure your current assets are as liquid as possible.
Similarly, the software will give you’re a clear-cut margin on how much to invest. The inventory management systems can feed accurate inventory add-ons to avoid order cancellations. They have built-in analytical tools that can anticipate upcoming demand and ensure your company is not understocked. These smart purchases can improve business efficiency, reduce order processing times, and boost profits.
3. Automate payroll management
No matter how loyal your employees are, they won’t mind putting you in hard yards if they don’t receive their paycheck on time. Similarly, they might even file a lawsuit if their pay isn’t right down to the last dollar.
Managing payroll can get tricky at times. There are different salary levels, remuneration plans, and you also have to account for holidays, taxes, and fringe benefits. Automating these processes can save you a considerable headache.
It can save details of payment processing in the correct account period. Likewise, it maintains a separate profile of every employee to calculate gross pay and adjust deductions accurately. If your company uses an RFID system, you can incorporate it with software to track employees’ entry and exit times. Moreover, automated tools can also update amounts tied to accrued wages and prepaid bonuses, closing doors for miscalculations.
4. Manage expenses online
In a bustling office environment, there are hundreds of expenses happening every day. And keeping a track record seems like an uphill battle. Sometimes, employees are holding onto receipts to file reports, while often, managers are reviewing them. As a result, processing expenses and reimbursements take forever. However, things are different when you manage costs online.
You can link expense tracking tools to other applications and bank accounts. Hence, whenever there is a deduction from the business account, the tracking tool will record the expense. Besides, accountants can also schedule payments for fixed costs. For instance, if the utility bills or office rent is due on the 5th of every month, they can schedule the payment before the due date. It would reduce the workload at their end while giving management an accurate picture of the company’s expenses at any time of the month.
5. Leverage automated reports
Analyzing tons of data and cross-checking details is super time-consuming. Usually, it takes weeks for accountants to prepare reports for the management. So, why not prepare automated reports? Accounting software has companies’ entire financial data such as income statements, customer information, payable details, etc. Thus, within a few clicks, it can generate automated reports. If you want to discuss income and expenses with the management, download the profitability report.
These automated tools leverage descriptive analytics, offering a visual representation of all financial data. Furthermore, it can also assist with consolidation. You can set up a consolidated reported system or implement an ERP system. Whether you have five subsidiary companies or ten, it will gather data and prepare consolidated reports. After a review, you can even publish these reports for public trading.
Automated accounting software can significantly improve productivity levels in the organization. Accountants no longer have to spend hours on bookkeeping or filing receipts, nor do they have to adjust paychecks manually. Intelligent accounting software can automate these tasks with minimal human intervention. In addition to streamlining processes, it reduces the likelihood of errors and improves accounting operations accuracy.