10 Benefits of Accounting Automation for Your Business

Jasmine Black
|
5 min read
10 Benefits of Accounting Automation for Your Business

In the last year, 57% of businesses made intentional efforts to cut costs, targeting inefficiencies in procedures, risk management, and time utilization.

If you're in this cost-cutting camp but have yet to consider accounting automation, a significant savings source awaits you.

There are several ways your company can benefit from accounting automation. Keep reading to learn how automation can cut waste and better prepare your business for the days ahead.

What Is Automated Accounting?

Automated accounting is when computers use machine learning to handle bookkeeping tasks. 

This type of software, powered by artificial intelligence, mimics human actions and automates basic data entry processes that would usually need human input.

10 Advantages of Accounting Automation for Your Business

1. Streamlined Financial Processes

Waste cuts into your company's bottom line, and inefficiency is a significant source of waste. Automated accounting reduces the need for human data entry.

For instance, you can save valuable time through accounts receivable automation. Traditional accounting may require a multi-department process for processing invoices. Through automation, your company can experience greater efficiency through collaboration. 

When different members or finance teams contribute to the accounting process at various stages, it streamlines the process, saving your business time and money.

2. Enhanced Accuracy and Reliability

When you look at balance sheets, you don't want to wonder if they're accurate. Even the best human agents will have typos and mistakes, which can throw the numbers off. 

Eye strain, fatigue, and a host of all-too-human factors slow processes. Automated accounting does not share these limitations.

When you reduce the need for human data input, it reduces human errors. This increases the accuracy and reliability of financial data. Financial automation ensures your financial reporting is audit-ready and aligns with all applicable laws. Likewise, automated accounts can help ensure your bank accounts remain reconciled.

3. Enhanced Visibility Through Real-Time Financial Insights

Old or out-of-date financial records do not provide the best insights. Accounting automation tools provide up-to-date snapshots of your company's financial health. Traditional accounting lacks the ability to make these financial reports available in real-time, leading to delays.

With automated accounting processes, you no longer have to wait for the end-of-quarter report to get a snapshot of your finances. You can immediately access your financial statements at any time. Quick access to key performance indicators allows you to access relevant data quickly and make necessary changes, rather than waiting for quarterly reports when some decisions may be more reactive than proactive.

4. Enhanced Budget Management and Control

Automated accounting procedures help you better manage and control your greatest planning tool: your budget. You may sometimes feel "budget stuck" because you are waiting on the data to decide if a purchase is feasible. This lost time only adds to the inefficiencies that drain resources. Automated accounting offers better budget management and control by keeping the data up-to-date.

For instance, traditional accounting can leave you in the lurch, waiting on reports to know if you can afford to purchase that newly needed item. On the other hand, accounts payable automation cuts time down, especially when aligned with payment processing. This change can give your accounting department immediate insight into your remaining purchasing power.

5. Enhanced Management for Growing Businesses

Accounting automation also gives you superior management of your business as it grows. It does this in several ways. First, reducing repetitive tasks frees you up to focus on higher-level issues. Second, immediate access to financial data enables you to make the best real-time decisions. 

Many automated accounting platforms offer an easy-to-use dashboard that lets you view a snapshot of the company's financials. When you are freed up from repetitive tasks and armed with reliable data, you can best manage your growing business in a changing climate.  

Finally, automated accounting provides a superior accounting tool in predictive financial analysis. AI-driven accounting platforms can analyze trends and make detailed predictions about future market trends, inventory needs, etc.

6. Improved Compliance and Risk Management

In this context, compliance refers to your company's adherence to all local, state, and federal laws, industry standards, and best practices. Automated accounting services ensure that relevant financial data is accurate and up to date to reduce compliance issues.

Similarly, automated accounting helps business leaders better manage risks. Risks come in many forms, including shifting markets, accumulating debt, fraud, or limited liquidity. Through its collection and presentation of accurate, real-time data, automated accounting can note patterns or irregularities. This helps you catch misreporting or fraud issues before they spiral out of control. Automated accounting provides leaders with the financial tools needed to best manage risk in a host of areas.

7. Improved Decision Making

The best decisions are made using the best data. Automated accounting provides the highest quality data to make the most informed decision. The modern world is fast-paced, so leaders often have to make decisions sooner than they might like. 

Without the relevant financial data, you could be flying blind in a turbulent atmosphere. Automated accounting provides instruments that can help you ascend above the clouds to gain clarity and insight into the right course for your company.

8. Enhanced Collaboration and Accessibility

Automated accounting can help businesses develop greater internal collaboration and grant you greater accessibility to financial records. This dramatically enhances your company's accounting workflow. Accounting automation allows different accounting team members to contribute to the accounting process, which can significantly improve cross-department collaboration. Especially in larger companies, tasks like invoicing may require input from multiple departments.

Likewise, automating your accounting systems grants you easier real-time access to your company's financial statements and records. Many automated accounting platforms are cloud-based, meaning you can access your data anywhere, including your smartphone. This increased accessibility to accurate and reliable data enables you to track financial realities and make the best decisions.

9. Increased Time Savings for Core Tasks

Recently, 42% of business owners said they felt "burned out," due at least in part to the continued stress of running a small business in the day-to-day operations. Startup finances and time are often stretched equally thin. Recent data revealed that more than 8 out of 10 small businesses have no employees.

Whether this is the case for your company or not, you may lose productivity when humans input data, process invoices, or do other repetitive, manual tasks that could be automated. 

This is where automated accounting makes a significant contribution: freeing you and your team from repetitive data entry to do more important things. Whether you're part of a team or flying solo, automated accounting can free you up for higher-level strategic planning, collaboration, and conversations.

10. Enhanced Integration With Other Business Systems

Automating accounting systems can also easily integrate with other business systems. This makes other areas of your business more efficient and easy to navigate. These may include e-commerce platforms, supply chain management systems, or human resources management.

Integrate automated accounting with e-commerce platforms to simplify the paper trail for your online sales and eliminate the need for manual bookkeeping. Combine automated accounting with supply chain management systems to closely monitor real-time inventory and make managing your stock a breeze. This allows you to order more accurately based on market trends, previous year's sales, and a host of other factors. 

Finally, link your automated accounting system with human resource management to alleviate the stress of payroll, benefit management, and data entry.

Leverage Accounting Automation for Your Business

It's never too late to learn. Most startup businesses can benefit from automated accounting processes. Automated accounting leverages artificial intelligence to mimic human behavior, imitating the human ability to input data without many of the same limitations. This means your accounting team is freed from menial tasks to consider more high-level strategies or other work. 

Likewise, you can be confident that the data you receive from automated accounting is accurate, reliable, and up-to-date, which allows you to have real-time access to the data you need to make the best decisions for your company's future. Best next step? Find a platform that excels in automating your financials. 

Not sure if you’re ready to take the leap? Read 14 steps to implement automated accounting in your start-up

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