A hundred years ago when someone said “computer,” the word meant a human whose job involved crunching numbers. In the 21st century, computers and software can do more with numbers than a human ever could, and do it faster. When you automate accounting with software such as Accounting Seed, routine accounting tasks get done faster and more accurately. That frees up human accountants for higher-level analysis.
What is Accounting Automation?
Accounting automation software takes over routine accounting tasks from human bookkeepers such as manual data entry, bank statement reconciliation, and financial reports. By handling tedious, time-consuming tasks, automation frees up accountants to provide financial advice, projections and analysis.
The Uses of Financial Automation
If you’ve wondered, “can accounting be automated?” the answer has been “yes” for a long time. Given the masses of figures CPAs deal with every day, it’s no surprise that accounting has always been on tech’s cutting edge.
In the 1800s bookkeepers embraced the mechanical adding machine, the pocket calculator of its day. In the 1950s, General Electric became the first company to do its payroll on a computer. Accounting professor Richard Mattesich worked out the principles of spreadsheets in the 1960s, though it would be more than a decade before computer improvements made them practical.
These early programs didn’t automate anything. Humans had to enter data in spreadsheets and computerized account books. Modern software such as Accounting Seed — sometimes called robotic process automation (RPA) — automates repetitive rule-based accounting tasks.
If, say, you sell raw materials to a manufacturer, Accounting Seed and similar software can track and record the purchase, check for missing information, and generate an invoice. It logs the sale in accounts receivable, then in cash when the customer pays.
What You Need to Automate Your Accounting
If you’ve made the decision to automate, think both about what you need from automation now and what you might need in the future. Some specialist programs can do a good job for you now but may not scale up as you grow. Your company may have specific needs that require you to automate accounting with a flexible software that can adapt to your company, rather than a one-size-fits-all solution.
You also need to consider how you want automation to interact with other IT tools. If, say, you’re still calculating payroll on your phone’s calculator and writing hard-copy paychecks, that information has to be hand-entered into your accounting automation software.
Salesforce and Accounting Automation
The more you computerize your processes, the more automating accounting can help you. That’s why it makes sense to integrate your various accounting automation tools into a single platform, such as Salesforce. Salesforce guarantees smooth interactions between the different apps and programs, so it’s easy to transfer data from one function to another.
Once you know what you want from an automated accounting setup, it’s just a matter of setting up the Salesforce accounting software. There will be a learning curve while you and your team master the new system. Look for a tool that’s relatively simple to install and integrate and won’t be needlessly complex, making the transition harder. For example, an intuitive interface that presents functions and tools in a way that’s easy to grasp, like Accounting Seed, will make the training period go by faster.
The Benefits of Automating Accounting
So why isn’t accounting automated at your company already? If you’re on the fence about whether to automate accounting, consider some of the benefits you’ll enjoy:
1. Easier to Extract Data
Once you have the system set up, it’s easy to extract information from your files and ledger. Whether you have a question about payroll or the income statement, it’s quicker to get answers with automated accounting.
2. Faster Data Transfer
Financial automation lets your company access and transfer data without it being touched by human hands. There’s less chance of an internal actor manipulating confidential data or sharing it with outsiders. Accounting automation is a cybersecurity asset.
3. Cloud Storage
Storing accounting data in the cloud makes it potentially accessible wherever you go. Automated accounting software is equally accessible, making it simple to, for example, cut a check when you’re miles from the office. Plus, cloud-based accounting software is cyber secure, meaning your data security will be much better than if you were using physical in-house servers.
4. Saves Time
The automation of accounting saves you and your team time. It takes less time to enter information, check calculations and run reports. Reconciling information is quick because all the data is already in the system. In-house accountants are more productive; external accountants require fewer billable hours to do the work.
5. Handy Dashboards
Automated accounting makes it easy to create a financial dashboard. Like a car dashboard, it’s a display that collects key financial metrics and presents them in an easy-to-see display. You can see profit, overhead, operating costs or whatever data you’re concerned about. Accounting Seed can automatically populate your dashboard with the specific data you want.
Good software is flexible. If you develop new income streams or non-operating expenses down the road, it should be simple to adjust the general ledger, your accounts payable, and other modules within your accounting dashboard.
7. Simpler Foreign Exchange Accounting
A streamlined accounting automation software solution such as Accounting Seed can automatically calculate exchange rates for foreign exchange accounting. Learn more in the guide to Foreign Exchange Accounting: Buying Goods & Services with International Currencies.
8. Automate Accounts Payable
Your system can automate receiving and paying invoices, making your outgoing payments process smoother and taking up less time. Vendor payment processes have worsened across the United States since the pandemic, meaning you’ll stand out from the crowd and build trust with vendors at a time where crucial supplies are limited due to supply chain issues. Learn more in the guide to Vendor Payment Processes.
9. Fast Data Retrieval
With automated accounting, data retrieval is instantaneous. It’s just as easy to get information about earnings or cash flow in the middle of an accounting period as when you make out the statement at the end of the quarter. To make things easier, transactions are automatically pulled into your financial dashboards, giving you intuitive, customized charts and graphs that can be helpful for making important business decisions.
10. Automatic Tax Record Keeping (& Sales Tax Inclusion)
The IRS advises keeping tax-related records for three years, sometimes more. In hard copy that requires filling up a lot of office space with file cabinets crammed with papers. With accounting automation you don’t have to clutter up your office. When you need information it’s easy to retrieve pertinent tax records.
Another benefit of accounting automation is the automatic inclusion of the relevant sales tax rate. If you’re buying and selling in various states, Accounting Seed will automatically calculate the relevant sales tax amount for the state at hand when a transaction occurs.
11. Easier Cash Flow Tracking
When you automate accounting, it’s easier to track cash flow. Call the relevant metrics and projections up on a financial dashboard and you can spot cash-flow problems faster.
12. Improved Employee Morale
Not only does automated data entry save time, it protects your staff from boredom. Data entry is tedious work; they’ll be much more engaged with their jobs if there’s more thinking and less routine.
13. Painless Tax Time
Paying taxes becomes much simpler once you automate accounting. All the time consuming record keeping and form filling can be handled automatically.
14. Recurring Tasks
An automated accounting system like Accounting Seed is particularly useful for handling work you know you’ll do over and over again. For example, its innate accounting workflow automation can take over the responsibility for recurring payables, recurring billing, and recurring journal entries.
15. Bank Account Management
Using an automated system like Accounting Seed, you can schedule an in-the-background download showing all the transactions for a given period. You can set up your accounting automation to run after hours or on the weekends. The bank direct connect feature automatically connects each bank record with a given transaction.
16. Revenue Recognition
The Accounting Seed software makes it easy to recognize revenue. The program is customizable so you can set it up to work with your company’s unique requirements and procedures for accounts receivable.
Automating Accounting Processes – In Conclusion
It’s understandable if accountants and bookkeepers get nervous about automation in the accounting industry. Robots, mechanization, and AI have eliminated thousands of jobs in recent decades. In reality, accounting automation software is less a job-killer for accountants and more a job improver, eliminating the dullest, most brain-deadening part of the work.
Accounting is much more than routine data-acquisition. If anything, automatic accounting frees up accountants to engage more in high-level analysis. A skilled accountant possesses financial judgment that AI won’t be able to approximate. Accountants can’t be automated, but software makes it so much easier to access key metrics that professionals can use the time created to develop new insights and deeper dives to help guide management and make critical decisions.
If you’re still weighing the pros and cons of automated accounting, you can ask Accounting Seed for a demo. We can show you how automating accounting can transform your business.
For more helpful accounting resources for your business, read on:
- Top 7 Issues Accountants Face Today
- Accounting Cybersecurity: How to Keep Financial Data Safe and Secure
- DCAA Compliant Accounting Software: What to Look For
- What are the International Accounting Standards (IAS)?
- Top 8 Reasons Why IT Implementations Fail
- What is Cash Disbursement in Accounting?
- Accrued Expenses: What Are They And How to Report Them?
- Intro to Accounts Payable and Purchase Order Accounting
A native Salesforce accounting app, Accounting Seed, provides a full 360-degree view of your business’ performance to help you and your team make the best decisions possible. Not on Salesforce? Our software can be customized to work with any system you have through a reliable connection.
Schedule a free demo today to explore how Accounting Seed helps you manage finances your way.