Libeo: What is accounting automation and why is it useful?

WHAT IS ACCOUNTING AUTOMATION?

Accounting Automation is the process of using software to automate the processes and procedures of accounting. It is a way of improving efficiency and accuracy, while making sure that all aspects of the business are being looked after. Accounting automation can be used for:

• Records storage

• Invoice creation

• Invoice processing

• Invoice payouts

• Audit preparation

• Budgeting and forecasting

Accounting automation can be used in many different situations, from small businesses to large corporations and even government agencies. The main goal is to provide companies with a more efficient way of handling their finances, so that they can concentrate on other aspects of running their business.

SIX BENEFITS OF ACCOUNTING AUTOMATION

1/ ELIMINATING HUMAN ERROR

Accounting automation reduces human error because it can be programmed to follow strict protocols when performing any task. For instance, it can be used to automatically reconcile accounts by comparing current bank statements with prior statements, so you won't have to manually check every transaction each month or quarter.

It also reduces human error because it can be programmed to automatically enter the accounting entries from the invoices in the accounting software.

2/ IMPROVING DATA QUALITY

To understand how accounting automation improves data quality, it’s important to understand how much manual work goes into traditional bookkeeping. Accounting staff often spend hours each month manually entering data into different systems and matching up transactions that are made on paper checks against electronic ones.

The process can be tedious and prone to human error — especially when the time comes to reconcile accounts with bank statements or other third-party vendors. Accounting software helps eliminate these problems by automating both data entry and reconciliation processes.

3/ KEEPING YOU ORGANISED

An automated accounting software helps you stay organised by keeping all of your financial information in one place. This means that instead of having to sort through piles of paper receipts and invoices, you can keep everything in one place and easily access it whenever needed.

• Better record keeping – Automation keeps your records up to date, so you don't have to worry about missing any important transactions or tax deadlines.

• Easier bookkeeping – You can use accounting software to track all of your income and expenses, which makes it easier to fill out tax forms at the end of the year.

4/ ASSISTING WITH REGULATORY COMPLIANCE AND REPORTING

By providing you with accurate information at your fingertips, accounting automation provides you with an accurate view of your financial position so that you can easily manage your business. The software also allows you to create reports that meet regulatory requirements, while also helping you to save time on preparing them manually.

5/ ENSURING COMPLIANCE WITH INTERNAL CONTROLS

Accounting automation is used in all organisations to automate financial processes and improve efficiency in data handling. Accounts payable, accounts receivable, payrolls, fixed asset management, cash management and general ledger are some of the areas where accounting automation can considerably help reduce manual effort. It also helps speed up the entire process by ensuring accuracy at every stage of the process.

6/ COLLECTING INFORMATION AND PROMOTING COLLABORATION WITH OTHERS

Accounting automation enables organisations to transfer data between multiple systems, applications and software tools. Connecting accounting software with other systems in your organisation — including CRM, HR and eCommerce — allows you to share data more easily between them.

The biggest benefit of accounting automation is that it makes it easier for accountants and bookkeepers to review their clients’ financial data in real time.

This makes it easier for them to make informed decisions about tax planning, billing and other important aspects of running a business. It also helps you stay compliant with the law and reduces the amount of time it takes to complete certain tasks, such as reconciling accounts or producing reports.

HOW TO MOVE FORWARD WITH ACCOUNTING AUTOMATION

Accounting automation is a great string to your bow. It saves time, frees up your employees to focus on other tasks and gives you more control over your finances. If you're just starting out, you may not know exactly how your business will grow or how much work will be involved in keeping up with it. You also may not know what kind of accounting system would best suit your needs.

If you're looking for an automated accounting software, here are some tips:

1. Consider your needs. What do you want to automate? Do you want to automate invoicing and billing, or focus on accounts payable and receivable? Do you need accounting software to run an entire business, or are you just looking for a better way to manage your personal finances?

2. Know what features matter most. Some solutions offer everything from financial statements to inventory management to payroll services — all under one roof. Others specialise in just one area, so it's important to make sure you know what features are important for your business before shopping around.

3. Look for a system with an intuitive user interface that doesn't require extensive training on how to use it (or require you to train yourself!). Having an easy-to-use program ensures that all of your employees will be able to access their information quickly, when they need it most — and won't have to wait around while someone else figures out how to do it!

4. Think about your budget. You don't need to spend tonnes of money upfront in order to find the right solution, but there are many great options that cost a few hundreds per month — and they're well worth it if they help your business run more efficiently.

For example, if you're running a small business that requires only basic bookkeeping and invoicing, then a basic solution may be a good choice for you.

On the other hand, if your business grows into something bigger and more complex over time, but doesn't require specialised software, an advanced automated accounting software might work well, as it includes all the basic features needed by most small businesses at a reasonable price.