Automated accounting: chances are you've heard this term before, otherwise you wouldn't have ended up here. Maybe you've already had some experience with it, maybe you're just wondering how you can use it and benefit from it. Automated accounting refers to processes that are necessary for accounting, but which are taken over by automated systems instead of humans. However, the term is also somewhat misleading, because accounting automation can also be the partial integration of individual tasks.  

Let's put this in perspective:

Some of the basic tasks of accountants include:  

Organise and update accounting records as required

Prepare and analyse reports on transactions

Forecasting revenue and analysing profit margins

Monitor the general ledger reconciliation and general ledger

Managing accounts payable and accounts receivable

Regular monitoring of accounting activities

But, how many of these tasks actually require human input?  

Which ones are more prone to errors, although they should be error-free?

How many could be done through automation?  

What about the myriad subtasks that occur in each of these main areas of work?

Automated accounting basically streamlines the work in accounting. This allows your employees to focus on valuable activities instead of manual routine tasks. In this post, we will show you how automated accounting can help you in your day-to-day business.  

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4 Advantages of automated accounting

Automating bookkeeping has many advantages for accountants and business owners. Here are the most important ones:

1. error-free processes

Even the most thorough, meticulous professional can miss a detail. A wrong amount or a missing decimal place can happen even to the best of us. The likelihood of such small errors increases especially when important data is copied from A to B and C and the correct ones have to be picked out from a multitude of invoices and documents. This is exactly where automated accounting helps: correct data across all processes, departments and applications is essential. Even more important for a process as exact as accounting. Automation can deliver that.  

2. faster turnaround  

Among the most obvious benefits of automation, time saving is at the top of the list: the less time you have to spend on accounting thanks to automation, the more time you have elsewhere: strategy development, business development, long-term planning.  

3. more overview

Instead of searching for documents in a messy folder or database, receipts, invoices and proofs can be automatically stored in a structured way. So you never have to dig through piles of digital paper again.  

4. comprehensive analytics

Reporting and evaluations are enormously important. A strategic role for accounting can bring decisive advantages for long-term (financial) planning. However, the preparation and quality of data and reports is crucial for this.  

Automation helps avoid the hassle of collecting and collating data. By connecting the right apps, you can automatically package KPIs and numbers into reports, charts and dashboards.

How to get started with automated accounting

Depending on various factors, such as the software you currently use, your business processes, your requirements and, of course, your budget, there are two paths that lead to automated accounting.  

1. integrated automation functions in your accounting software

Automation is a term that is also used by many accounting software providers. This is because most of these applications have some built-in automation features.  

Applications such as lexoffice, Fastbill or sevDesk offer functions that integrate your online banking with automatic payment reconciliation and thus automate parts of your accounting. Much of this is very practical, but it also quickly reaches its limits, especially when more complex workflows are to be automated.  

2. comprehensive automation platforms

Automation platforms like Make or Zapier make it possible to connect hundreds and thousands of different applications, offering more flexibility and scale. This means that processes are adapted to your needs, not the other way around. In concrete terms, this means that your accounting software is connected to other applications, such as emails, CRM, cloud storage or ERP, and data is transferred automatically.  

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Which accounting tasks can be automated?

Accounting not only has multiple tasks, but also many responsibilities that can sometimes be overwhelming. To stay on top of things, automation can help with some of them, empowering you to take on a more strategic role.  

Here are a few examples of tasks that can be automated.

Accounts receivable and accounts payable

In essence, accounts receivable and accounts payable are about:  

Follow-up of outstanding payments

Keep the relevant stakeholders up to date

Reminding everyone to pay on time  

These tasks are perfect for automation because they are based on clear conditions and do not require much interpretation or human input.

Examples of automation include:

Accounts Payable:  

Extract data from invoices

Storing this data in a database or spreadsheet

Forwarding information to relevant stakeholders for approval

Payments processing

Accounts Receivable:

Automatic sending of the first invoice

Sending payment reminders to customers

Deposit the money directly into your bank account

Expense management

Chasing employees and colleagues to collect receipts is not much fun. There are expense management tools, such as Expensify, that make it easier to collect, share and manage expenses. In it, team members can simply take a photo of their receipt. The tool then extracts the data and forwards it to your accounting software.  

Accounting, taxes and monthly financial statements

There are several challenges in correctly posting receipts:

Identifying and correcting errors

Transferring data from one app to another

Find missing invoices and receipts

Removing duplicate documents and items  

Identification of unknown payments  

There are often already native functions in your accounting software that support you in this. However, these can be extended by automated accounting: Relevant receipts can be automatically filed in the correct folder from your email inbox and transferred from there to the accounting software.  

Reporting and cash flow forecasts

The secondary goal of accounting is to provide insights to drive strategic business decisions. To do this, it is hugely important to collect, process and present data. Financial information should be available clearly and concisely, but this can be very time-consuming. Aggregating large amounts of data into reports requires time, a resource that most accounting teams can ill afford to spare.

However, the necessary data is usually already available: In the accounting software. They only need to be retrieved and structured. This is exactly what can be done by connecting different applications. For example, relevant KPIs can be automatically posted on a dashboard.  

Modern accounting software also offers reporting functions to forecast trends and challenges and even results.  

Conclusion

The transition to automated accounting can be seen as the next step after digitalisation, similar to the transition from paper to Excel. The manual, repetitive steps of accounting can thus be automated and enable accounting to take on a more strategic role: Expert:ers are needed to analyse, interpret and gain insights from data to make better business decisions. This is exactly what automated accounting promotes.

So why not use existing technology to make the work easier and more effective?

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