Not for the first time in the last half hour, you hear your phone go off from under the pile of papers on your desk. You look at the wall and see the clock has struck 9. Your family finished dinner an hour ago. Luna is waiting by the door for the walk you promised yesterday.
You groan.
Despite starting your day early, there are still accounts to reconcile, reports to prepare. You catch yourself before slipping into an angry rant. Adjusting in your seat, you prepare to crunch numbers again. Your phone falls silent.
This scenario is all too common in the accounting world. Despite best efforts, accountants find themselves toiling away at slow, manual accounting processes.
In fact, a survey by the Institute of Management Accountants and Deloitte found that 75.7% of practitioners work on accounting tasks that are largely or considerably manual. This highlights a clear opportunity for firms to use automated accounting systems for greater efficiency.
What is Accounting Automation?
Accounting automation uses technology to complete accounting tasks traditionally done manually. This enables accountants to focus on higher-value activities. Think financial analysis, strategic planning, and advising. By streamlining each accounting process from start to finish, firms maintain accuracy and consistency in their financial records.
Put simply, automation in accounting promises productivity gains that firms can use to gain a competitive advantage.
But does this promise come at a price? Ash Mehta, Senior Director Analyst at Gartner Finance, doesn’t seem to think so:
Specific accounting tasks might be ripe for automation, but the profession as a whole requires human expertise. The successful accountant will be one who can integrate automated tools into their workflow while continuing to provide the uniquely human elements of insight, strategy, and trust.
Ultimately, by leveraging human and machine strengths, accounting firms can build processes that enhance both business performance and employee experience.
The Benefits of an Automated Accounting System vs the Challenges of Manual Accounting
Here are five key areas where automation, either wholly or in part, addresses the pitfalls of manual accounting:
In an industry where the threshold for accuracy is higher, manual accounting is painstaking, risky work. Add pressure from clients and ever-changing regulatory requirements to the mix, and the margin for error becomes even smaller.
Automation in accounting might not be the single best way forward—the verdict is still out on this one—but it certainly seems easier and more efficient.
Accounting Tasks You Should Stop Doing Manually
To fully enjoy the benefits associated with automation, firms must understand what kinds of activities can and should be automated. Below, we list seven.
1. Data Entry
Data entry is a vital part of accounting but is the most repetitive and error-prone. Automating software with optical character recognition (OCR) technology and smart integration capabilities can reduce the time usually spent on this task.
To extract data, OCR technology tools can automatically scan invoices, receipts, and other financial records. This information is then directly fed into your accounting software, eliminating the need for manual data entry.
Remember to regularly audit automated entries to ensure accuracy, especially during the initial setup.
SUGGESTED SOLUTION
Made by accountants for accountants, FuseWorks brings versatility to your data automation strategy. Through its flagship products, FuseDocs and FuseSign, you can automate and digitize document compilation, formatting, sharing, and signing.
No matter the size of your practice, FuseWorks transforms complex document processes into simple,
automated tasks.
2. Accounts Payable and Receivable
Managing payables and receivables manually involves many paper-based tasks, which can be slow and inefficient.
Automation in accounts payable streamlines invoice processing, approval workflows, and payment scheduling. On the receivables side, it ensures consistent invoicing, automates payment collection, and schedules follow-ups for overdue accounts.
When choosing accounting software, go for the one that supports integration with your ERP system to streamline data flow.
SUGGESTED SOLUTION
Ignition is a comprehensive solution that automates the financial relationship lifecycle—from initial engagement to final payment processing. With better visibility into incoming and outgoing payments, the platform’s detailed analytics help you maintain a healthy cash flow.
Ignition’s multi-currency support and flexible payment terms are a plus for firms with international partner vendors.
3. Expense Management and Bank Reconciliation
While expense management ensures all business spending is captured and categorized properly, bank reconciliation validates these transactions against bank records. When handled manually, these accounting tasks consume valuable hours and introduce unnecessary risks.
Through automation, you get access to a continuous flow of validated financial data that strengthens your firm’s reporting accuracy.
SUGGESTED SOLUTION
Airwallex enables global business growth with integrated financial management. Its features include real-time expense capture and automated receipt matching for compliance.
The platform’s advanced fraud protection spans both banking and expenses, while detailed spending analytics provide insights to enhance cash flow and financial decision-making.
4. Financial Reporting
Using accounting software, financial statements that once took days to prepare can now be generated automatically.
Financial reporting tools, in particular, pull data from various sources to generate custom reports based on your criteria. These tools can also deliver reports to stakeholders on a predetermined schedule.
Remember to consider your team’s data analysis skills when choosing accounting software for financial reporting. Some tools require more technical know-how, while others are designed for ease of use. Training your team to use these tools effectively can further enhance productivity.
SUGGESTED SOLUTION
Spotlight Reporting comprehensive suite of reporting tools transforms raw financial data into actionable insights. Its multi-entity consolidation and three-way forecasting capabilities have earned the accounting software its powerhouse status.
5. Payroll Processing
Manually processing payroll can be a nightmare combination of calculations, tax deductions, and compliance concerns. Not to mention, it’s time-consuming, repetitive, and highly susceptible to human error.
Payroll software simplifies this process by managing everything from salary calculations and tax deductions to direct deposits and reporting. These tools integrate with your accounting software, enabling automatic update records.
By automating payroll, you ensure that employees are paid accurately and on time while maintaining compliance with tax regulations. As a business owner, both should be top of mind to achieve sustainable success.
SUGGESTED SOLUTION
ADP brings decades of payroll expertise to the table with its robust processing system for multi-state calculations and tax filings. Its employee self-service portal reduces administrative burden by allowing staff to access their payroll information independently.
6. Audit Documentation
Audit processes demand detailed records and thorough documentation, which can become burdensome when managed manually. Automating audit documentation ensures that all data is organized, accessible, and compliant with regulations.
Audit management software can help collect, store, and organize financial documents, track changes, and generate audit-ready reports.
To protect sensitive information, choose an auditing accounting software that offers real-time data access and robust security features.
SUGGESTED SOLUTION
From Wolters Kluwer, TeamMate+ Audit is an end-to-end audit management platform trusted for its scalability and flexibility. Its features include workflows for audit planning, risk assessment, and integrated analytics.
Perhaps most impressive, TeamMate+ has a smart auditee portal that allows stakeholders to collaborate.
7. Month-End Reviews
Month-end reviews require reconciling accounts, reviewing financial statements, and closing the books. Without automation, these accounting tasks can stretch into days or even weeks, adding stress to your team.
Leveraging accounting automation software can streamline the dreaded month-end close process. In addition to speeding up task completion, it enhances accuracy and improves controls.
Remember to regularly review automated processes to ensure they align with your financial close procedures and comply with regulatory standards.
SUGGESTED SOLUTION
QuickBooks is a household name amongst accountants. Its Advanced version features a robust workflow automation engine for customized close checklists and automated task assignments.
Additionally, its advanced reporting tools support custom report building and real-time dashboards, offering detailed financial insights and visibility into the close progress.
Our clients at TOA Global have used and continue to use the solutions we suggested above to optimize their accounting system.
Boost Productivity with Smart Automation in Accounting
The accounting industry will always see a strong demand for efficiency and quality. Given the practical solutions it offers, embracing automation will set your firm up to respond better.
So, the next time you find yourself buried under a mountain of paperwork, consider how automation could help you get home in time for dinner—and maybe even that walk with Luna.
Automation is a powerful complement to human expertise. The most successful implementations will be those that strike the right balance, leveraging both automation and human capabilities.
Combining automation with offshore accounting services might just be the ultimate solution for your practice. At TOA Global, you gain access to specialized expertise that can transform your accounting operations alongside automation.
Sounds good? Schedule a call today
