If you’re like most small businesses, COVID-19 was probably a wake-up call to take accounting automation more seriously. Despite the challenging business environment that required you to adapt to the new normal, you still had to balance your books, pay your taxes, and create financial reports to submit to your investors.
But if other businesses have made the leap, so can you. It’s time to automate tedious accounting processes so that you can focus on the things that matter. In this ever-changing world, it’s important to be flexible and ready for all changes. That’s why accounting automation is so great: it uses technology to help you with your workflows with minimum human intervention.
3 Signs That Say It’s Time to Automate Your Accounting
1. Company is growing.
Growth puts a strain on an organization’s resources and workflows. Existing processes may no longer support the need for efficiencies and may no longer deliver the level of service your customers are accustomed to.
2. Company needs to expand quickly by hiring new employees.
Staff onboarding requires you to collect payroll information from new employees, which, traditionally, is a tedious manual process. Save time and resources by automating your company’s onboarding process.
3. Volume of accounting transactions has increased.
Accounting automation reduces routine and transactional tasks such as bookkeeping, data entry, and compliance requirements. The time you spend automating your accounting tasks will ensure you have more time to provide value-added services to your clients.
Benefits of Automating the Accounting Processes
If you can relate to the reasons above but are still on the fence about automating, learn more about the benefits below.
1. Simplifies your workflow and makes it more efficient.
Moving towards automation will force you to gain clarity on your workflow. Because you will have to map the process, you will see the gap between what you do now and what the end result should be. Once mapped, you can streamline the workflow to eliminate wasteful activities.
2. Saves time and boosts productivity.
Automation has the power to boost your company’s productivity. It can give your employees the time to focus on high-level tasks that need their creativity and innovativeness instead of tedious data entry tasks.
3. Offers more consistency and reduces discrepancies.
Automation reduces human errors while ensuring consistency and reliability. Competent employees will still do things a little differently. When this happens, discrepancies occur. But with automation, you predefine the steps. That way, the system performs consistently and reliably.
4. Uses a single cloud-based location.
A cloud-based accounting platform makes life simpler by giving you one centralized place to access all your files, software, and processes. For instance, you do not have to be at your desk to check a document or process a payment. You don’t have to waste time rifling through filing cabinets or shuffling papers on your desk.
How to Automate Accounting Processes
Automation of accounting processes helps with missed deadlines and errors. This savvy move will set your business up for success. If you are interested in automating some of your accounting processes, here are the steps.
1. Determine which ones can be automated.
You cannot automate all of your accounting tasks, so you have to determine which are qualified. Here are some of the criteria of the tasks that you can consider:
- Repetitive and frequent
- Does not require a lot of human involvement
- Does not require mental energy and creativity
- Not sensitive or confidential
- Not strategic or tactical
List the tasks and start with one. For instance, if your team sends reminder emails to your clients about overdue invoices, start automating these reminder emails using an accounting platform.
2. Choose the right automation tool.
Use the right tools to create workflows that achieve your business goals. When choosing the platform, make sure you can link it with your existing apps. Keep in mind that some accounting applications also have built-in automation features, so you don’t need separate software for your workflows.
3. Designate a stakeholder.
While automated processes can run independently with minimal human intervention, it’s important to have someone acting as a point person to ensure that everything runs smoothly. That way, if issues arise, there is someone responsible for fixing it.
4. Design a workflow.
After identifying the tasks, choosing the tool, and determining the person in charge, the next step is to set up the workflow. Setting up one requires you to determine the trigger, action, and results. Here’s a quick explanation of the elements:
- Trigger – Predetermined event that will jumpstart the automation (i.e., overdue invoice date)
- Action – Reaction to the trigger (i.e., send a reminder email to the client)
- Result – Expected process goal (i.e., client clicks the link in the email to pay the overdue balance)
An automated workflow can be more complex with several triggers, actions, or results.
5. Test your workflow.
The final step is to do a quick test to see if the workflow is functioning as expected. If there are issues, speak with the person in charge and request to make changes. Remember that businesses are living systems, so if there are any changes to the business model, you should also be able to change the workflow.
6. Accounting platforms to help you automate.
If you’re still doing your accounting the old-fashioned way with spreadsheets, data entry, and paper reports, consider switching to one of these accounting platforms to help you automate. These cloud-based systems are not only accessible anywhere, but they are also relatively affordable because they are subscription-based. Here’s a brief overview of the different platforms.
- QuickBooks Online – one of the most popular cloud-based accounting applications that can connect to various other business software platforms to further automate and integrate your workflows.
- Bill.com – a cloud-based end-to-end app for accounts payable and invoicing.
- Gusto – a cloud-based payroll and benefits software for handling payments to contractors and employees. The app also helps companies comply with labor and tax laws and charges a monthly fee per employee.
- Paycom – an online human resource technology and payroll provider. The company is known to be one of the first to offer a fully online payroll processing solution.
- ADP Run – a comprehensive, cloud-based human capital management (HCM) software with human resource, payroll, time, talent, benefits, and tax administration features.
- BambooHR – a single platform that consolidates all human resources and employment-related data to manage HR activities.
Why Talk to LTD
If you need help with your accounting processes automation plan, rely on LTD Global to help you. We have built trusted relationships with small businesses and non-profits since we started in 2003. Our experience and expertise in accounting, HR, recruitment, and administrative tasks can support your growing needs. Allow our talented team to automate your accounting procedures, so you can focus on what matters most – meeting your goals and mission. Drop us a note, and let’s talk!
Sources:
How to automate accounting processes, QuickBooks.com
Follow These 7 Steps to Automate your Accounting Process, TweakYourBiz.com