Take a look around and you’ll likely see self-driving Tesla’s and computerized cashiers in grocery stores. If you need to ask, “Will accounting be automated?” The answer is - it already is. Accounting automation continues to transform the lives of individuals and businesses in the realm of finance.
Every organisation shares the need for accounting, and with automated accounting, organisations are revelling in cost savings, efficiency, data analytics and enhanced accuracy.
By understanding how accounting automation works and its benefits, you can be better equipped to choose the software solutions that are designed to meet your needs.
What is Accounting Automation?
Accounting automation uses computer software, RPA and programming to conduct the manual tasks of accountants and finance teams. Accounting automation software can crunch numbers, track transactions, manage processes, transform data and share information to necessary parties.
Rather than being bogged down by spreadsheets, the automation tools can pull data from various sources, integrate it all into a centralised location and transform it into insights. While accounting automation software isn’t something new, it once required much more manual intervention than it now requires.
It’s led to a digital age where finance teams can now spend more time being partners and advisors to help make big business decisions.
In an effort to best understand how automation technologies work and have evolved, it’s helpful to know these key terms:
Robotic Process Automation (RPA): Robotic process automation emulates human actions and is most commonly used for repetitive tasks. It’s best implemented for tasks that have the same expected outcome for various inputs. For example, RPA can alleviate the time-consuming and once manual task of processing invoices.
Machine Learning (ML): Machine learning refers to the ability for computers to learn from its own experience and actions. With more data inputs, the system becomes better at carrying out automated processes, even when the task is no longer within a rules-based system.
Artificial Intelligence (AI): Artificial intelligence is the term used to describe how technology can mirror human intelligence by approaching and solving problems with logic.
Commonly, these three technologies will be working simultaneously to carry out accounting automation processes.
History of Accounting Automation
Automation tools continue to push past their own boundaries, both with and without humans taking any action.
So, how did we get to this accelerated point?
Let’s take a quick look at some big milestones in the history of accounting automation:
The field of accounting begins with bookkeepers using paper ledgers
In the 1880s, William Burroughs invented the adding machine
In 1955, General Electric used UNIVAC (the Universal Automation Computer) to become the first business to use computerised accounting
1978 saw the introduction of spreadsheet software from Visicalc and Peachtree (for PCs)
Microsoft Excel launched in 1987, which is still to this day one of the most important software tools for accountants and financial professionals
What are the Benefits of Automated Accounting Software?
Every financial team already uses at least one form of automated accounting software, and that’s very likely to be at least an Excel spreadsheet. But, when you take your automation a step further with specific finance automation tools, you can easily maximise your team’s productivity.
By deploying a human analytical finance automation software, likeSolveXia, your organisation will undoubtedly experience many benefits. Here’s a look at some biggest reasons why automation accounting software should be considered a necessity rather than an option:
Save time: Time is an easily quantifiable metric. As such, when you implement an automated accounting software to manage tedious and time-consuming tasks, the time saved is immediately apparent.
For example, consider the massive amount of work and time it takes to complete the financial close processat the end of each month. This time could be much better spent focusing on business objectives and strategies. With automation tools, repetitive tasks no longer require manual effort.
Boost productivity: Automation isn’t meant to replace humans within a financial team. Instead, it augments human productivity and frees the headspace and time to focus on high-level tasks. In this way, the time savings translates to being able to do more in the same period of time. Productivity has the ability to skyrocket.
Data accuracy: Every transaction and happening within the business world is replete with data. The more data there is, the higher the likelihood that a person can make a simple mistake that can have detrimental consequences, especially within the world of finance. But, with automation tools, the risk of mishandled data falls by the wayside. The system can collect, store, share and transform data with high accuracy.
Transparency and connectivity: On the topic of data, it helps to have data handy when it’s needed. Rather than having to sift through massive amounts of paperwork, any internal or external stakeholder can be granted access to the data as they need it. With the ability to find the data you’re looking for in seconds, you help business remain agile and proactive, rather than reactive.
Compliance and governance: Similarly, finance teams have to comply with government regulations and accounting standards. This can best be done when processes are neatly outlined and standardised organisation-wide. Through accounting automation, you can rest assured that processes are carried out as they are designed to be, and that there’s less risk of errors so compliance can be carefully controlled.
Security: Most accountancy firms hold onto records for roughly 7-10 years. That’s a lot of paper and lockboxes! Software tools can digitally protect information and securely do so with a single entry in a ledger and a second entry as proof.
Additionally, you can remove the risk of employees storing sensitive files directly on their desktop, instead directing all information through the cloud or on-premise with encrypted systems that boast bank-grade security.
Cloud access: Your accountancy needs and access to the organisation's financial status gets to be as mobile as you are with cloud computing and access. In today’s world especially, it’s imperative that people can access their information wherever they go - whether it be working from home or on the road.
Real-time analytics and visualisation: Similar to organisms, organisations are constantly changing. A big sale will greatly impact the company’s bottom line; however, through manual processes, this may not be recognised until days or weeks later.
But, with automation tools, you can process such transactions automatically and expedite approvals. Then, you’ll be able to leverage the data and analytics through the software’s easy-to-read visualisation tools, like dashboards and charts. These insights inform business decisions.
Continuous improvement: Dashboards can be viewed at any time, and reports can be scheduled automatically and constantly. These offer a way to ensure that finance operations are running as smoothly as possible.
Should a report show otherwise, it can be a quick fix. You can leverage the software to test a new process or alteration and then roll it out across the organisation to drive forward the optimal solutions at every turn.
Professional development: While the linkage here may not be as obvious as the previously mentioned benefits, automation software leads to professional development in various ways. For starters, your employees have more time to spend focused high-level tasks and human interaction with clients and peers.
Additionally, this could even mean they have some extra time to attend workshops and/or learn new skills. But overall, automation tools can contribute to boosted employee satisfaction and unleash creativity/spur new ideas as employees are no longer stressed and overworked by manual tasks. This helps your team members grow as professionals and contribute more within the organisation.
Accounting Automation Examples
Ready to see automation in finance and accounting in action? Check out these common examples:
Automate Expense Processing: Manually entering expenses for review and approval is laborious and quite frankly, a total waste of time. With RPI and AI, automation tools can handle expense processing for you. You can take a picture of a receipt, let the application scan it and sync to your cloud software.
Payroll Automation: Payroll automation is perfectly fit for automation because it’s repetitive and predictable. Therefore, the software can be trained on what to do and when to do it, so that your team gets paid on time, every time.
Automated Accounts Receivable Services: Sick of following up with vendors and spending time writing customised messages to do so? Allow automation tools manage the process from start-to-finish for you.
Automated Financing Services: Automation services in financing are expanding outside of a finance department’s walls. There are tools that exist that can find you the best source of capital funding for your needs, with little human intervention.
How to Choose Accounting Automation Software?
As there is a long list of benefits from automation software, so is there a long list of options in the marketplace to choose from.
Take the following into consideration when finding the right tool for your organisation:
Meets your business objectives
Is within budget
Can be accessed on mobile
Is a scalable solution
Provides top-notch customer service
Has a wide range of integration options
3 Top Accounting Automation Tools
Still not sure what tool is right for you?
Here’s a look at three software tools that are worth learning more about:
SolveXia: Our human analytical software solution automates end-to-end processes and is carefully designed for financial professionals. Beyond transactional data, your finance team can drive forward performance by leveraging the tool’s powerful data analytics, collaboration, governance, bank-grade security, and scalability.
Quickbooks: Many small companies rely on Quickbooks as it can integrate with most major payment providers. With invoice tracking and receipt tracking, Quickbooks makes it easy to automate processes, even for individuals with little to no financial background.
Xero: Small businesses and accountants alike agree that Xero is a powerful software that works through a “plug and play” interface. This makes it easy to pull reports and manage day-to-day financial tasks.
Why Is Accounting Automation So Important?
Automation is becoming essential across industries, but accounting automation is of utmost importance because the mental load can quickly become exhausting for finance professionals. Getting stuck in numbers and data that can make and break a business’ entire existence is stress-inducing.
With the limited number of hours in a day, accounting automation makes it possible to get all the work done in a timely manner. This way, finance professionals can easily meet deadlines and use their time optimally to help drive business forward.
You’ve used Excel before, so you know the power that automation brings to the table (no pun intended). Advancements in technology with AI, ML, RPA and the like are helping to transform finance departments into powerhouses within organisations. As soon as you deploy an accounting automation tool like SolveXia, you will be able to witness your ROI. The best part is many of these automation solutions offer a free demo, so you can test them out without cost or risk.