Can Accounting Be Automated?

Can Accounting Be Automated? Automation is changing the face of accounting. Automation in Accounting is here to stay, making accountants more productive and efficient.

Accounting can be automated. Accounting automation will make your processes that are manual more efficient. Automating your accounting department will save time, produce higher productivity levels throughout the organization, and will secure your data.

The topic of automation has become a hot topic amongst accountants because they believe this is, “the end of the accountant.” Others believe it is more of an evolution in the accountant profession. I believe in the latter, this will just evolve the accounting profession for a more accurate process when it comes to reporting financial statements. Modern accounting software(s) helps accountants become more impactful business partners. Such software can speed up tedious, time-consuming tasks and provide accurate data to teams so they may focus on the best strategies for growing their companies. Nevertheless, how you feel about automation in accounting just be aware they are here to make your work task(s) easier.

From my experience with dealing with accounting software which automates manual tasks. They can be very helpful to accountants by saving time, security, and having real time access to financials from any location.

‍What Is Accounting Automation About?

Automation in accounting saves time and effort by performing the most manual duties of an accountant’s job. With the help of accounting software(s) accountants are able to quickly post transactions and complete tasks with a click of a button.

The History Of Automation in Accounting Processes

• Paper ledgers were used by bookkeepers to record transactions.
• In 1881 the first adding machine was invented by William Borroughs.
• Herman Hollerith invented the punch-card machine. It is the first documented use of a computing device for data analysis. This census tabulator processed 100 cards per minute, making him one of the most well known computer pioneers in history.
• John Mauchly and J. Presper Eckert created UNIVAC - a computer that stored data on magnetic tape. Unlike Herman Hollerith punch-cards, it was faster to process than cards with holes in them. In 1955 General Electric started using this innovative technology for payroll processing.
• The first spreadsheet was launched by Viscalc in 1978.
• Peachtree launched its first accounting software for personal computers in 1978.
• In 1983, Quicken launched what would later be Quickbooks Accounting
• Microsoft Excel was created in 1987

The Benefit Of Automating Your Accounting

Automating tasks will make your accounting easier to maintain. The reasons are obvious to see and the added benefits of automation include: simplicity, reliability, accuracy and consistency in data processing for less time spent on manual work and more importantly higher quality output.

Time Saving

One of the benefits of automation is the saved time from doing manual work. Automation takes on tasks that would otherwise take up your day, so you can do other tasks that require more analysis. Accountants find automation most valuable during financial monthly closing.

For example, when a bill is entered and an invoice is attached to the transaction record anyone who opens the entry can see the actual invoice. Saving time by creating a file with a PDF of the invoice in the system. Storing the necessary documents in the accounting system.

Productivity throughout The Organization

Automation leads to improved productivity throughout the organization. For example, getting approval for an invoice, an accounts payable clerk and a purchaser must communicate. With automation a purchasing manager can go to the module and approve the invoice for payment.

Data Accuracy, Storage, And Security

The fascinating thing about automation, in regards to data accuracy. Errors are minimized. The modules provided by the accounting systems can record thousands of transactions in seconds and the data will not be jeopardized.

The accounting department of the past had to store documents in storage rooms. Sometimes these files could not be located. It’s now unbelievably easy to find any file due to the accounting system storing and securing this information.

Cloud Access From Anywhere

Moreover, cloud base servers give access to accounting software from anywhere in the world. It is convenient for employees because they can take their work with them anywhere. Previously you had to be at your office desk to complete tasks.

Real-Time Updates Across All Departments

Having an automated accounting system that can integrate between different departments in real-time is important for business communication. From my experience, when working with payroll it is integrated with the accounting system. Most companies use third party vendors to handle payroll. The business needs to build an integration between themselves and the vendor in order for this to take place.

Professional Development Of Employees

Performing manual work repetitively is a waste of time and should be automated. Doing this will free up time for Accountants to analyze reports more thoroughly. This can possibly present an opportunity for the accountant to grow from learning a new skill.

Computers do crash every once in a while so I believe an accountant will need to learn new skills to troubleshoot when a system goes down. Evolving the profession of being a bean counter.

Tasks To Automate In Your Accounting Department

We will go over some tasks that can help your Accounting department utilize their time better.

Purchasing Department

When purchasing items, there’s a lot of paperwork involved. There are purchase orders and contracts that need to be signed off. Purchase order automation can help make sure all necessary documents get accounted for and nothing is missed in the process.

Travel, Mileage, and Expense Reports

Automating travel, mileage, and expense report, employees can have their travel expenses prepaid. Accounting software like Concur can help you integrate expenses into account payable.

Accounts Payable

Companies that don't have efficient AP processes are at risk of losing business with important vendors, racking up expensive fees, or not receiving the goods and services they need when needed. Automation can help companies avoid these risks by making sure supplies get ordered on time and payments sent out to vendors in a timely manner.

Sales Order Process

During the sales order process companies can automate notes to appear when customers have request. Ensuring customer orders go out in time with all item(s) or service(s) with the correct pricing.

Payroll

Many companies find it difficult to handle payroll within the company. From my experience payroll is outsourced to companies like ADP. Companies like ADP integrate their system with other business accounting systems to pay employees.

Cash Flow

Mismanaging funds is one of the main reasons why any business can go bankrupt. It happens when accounting processes are unhealthy and a company cannot grow or expand because they are losing money.

More businesses are looking to outsource cash flow planning and decision making. This is opening a new market where businesses are leveraging cash flow with accounting automation.

Two of the most sought after accounting software Xero and Quickbooks have features in their application where they simulate bank balances for the next 30 days. Providing a plan and predicting cash flow projection.

These cash flow applications pull businesses financial data to automatically extrapolate the data yourself to build a cash flow forecast. As well it lets you forecast the income and expenses. This allows you to create a plan to pay payable and then have system trigger payment to vendors.  

How to Automate Accounting Process

Automating tasks can streamline any organization's operations. Building a workflow for your business is vital to start the automation planning process.  

Understanding the different tasks in each department will help you outline the steps in the workflow chart. Software like Microsoft Visio are used by businesses to create flowchart. It is a great tool to use. To gain maximum efficiency when automating a task you should track and optimize performance regularly.