Accounting Process Automation: 14 Steps To Get Started

Bethany Mullinix
5 min read
Accounting Process Automation: 14 Steps To Get Started

Startup founders must count on making their accounting process as efficient as possible as they juggle deadlines, strategy, employee management, meetings, and more. 

An inefficient accounting process can set you behind on invoicing, receiving payments, or paying bills. Even the best traditional accounting processes may leave you working late into the night to accomplish relatively basic tasks.

A recent study shows 82% of accounting professionals agree that automation is making a significant impact on the industry. They predict automation software and modern finance solutions will be the future of accounting. 

Ready to get on board? Read on to discover how to automate accounting processes for better business results.

Benefits Of Implementing Accounting Process Automation For Your Startup

Accounting process automation reduces the amount of grunt work you have while improving your accounting system as a whole. Some of the specific benefits you can get from accounting automation include:

  • Streamlined processes and increased productivity: With automation, you no longer need to manually input data. These tools can also integrate activities across your other systems to process and track invoices, reconcile with bank accounts, and more.
  • Reduced errors: Accounting automation tools help you avoid issues and discrepancies caused by human errors in data entry. They can also identify compliance issues that you need to address.
  • Time and cost savings: Because automation software performs repetitive tasks for you, you can focus on more strategy and business growth. You'll also lower your operating expenses by reducing labor costs and fees from compliance issues.
  • Better data insights: Automation tools can give you real-time insights and reports about your startup's financial data. With these analytics, you'll be able to make data-driven decisions more quickly and easily.
  • Improved cash flow: With more analytics and fewer errors, you'll be able to better track and manage your cash flow. Then, you can more quickly identify financial problems and growth opportunities.

Steps To Get Started With Accounting Automation

This section offers a roadmap to automating your accounting process. Because there's no one-size-fits-all approach, you will need to take an active role in implementing the system in your own setting. After studying your current accounting system, you'll need to create a plan for the transition. Finally, you must test and continually monitor your accounting automation or best results.

1. Identify Your Pain Points

Your first step should be recognizing any problems in your existing financial data systems. Within accounting workflow sequences, data entry, reconciling account discrepancies, and preparing invoices are familiar sources of frustration. 

Data entry is especially problematic because it is both tedious and prone to human error. If you do make an error, it can be tough to identify — trying to spot a discrepancy in your books can feel like searching for a needle in North America.

Pain points will be specific to your system and team, so you will need to assess your own specific needs. Consider including your entire accounting department in the conversation. Those who work most closely with certain aspects of your accounting process may have useful insights into its strengths and weaknesses.

2. Assess Your Current Processes

The next step is looking at your workflows so you can identify where you can benefit from and integrate automation tools.

Analyzing your financial statements may be routine, but assessing the system itself can be daunting. Start by keeping detailed data about your workflows. Document how your data moves from one step to the next, and note any obstacles. 

For example, each time a bill goes to accounts receivable or an invoice isn't processed properly, carefully note when and where the breakdown happened. You should also note who is responsible for each step.

Then, consider performing a SWOT analysis, identifying strengths, weaknesses, opportunities, and threats.  

3. Research Automation Solutions

Would you hire a contractor to remodel your house without researching and reading reviews about your options? Probably not. 

Likewise, you should vet accounting automation software before committing. That way, you'll find a solution that won't risk the integrity of your financial systems. Instead, look for features that address your specific pain points and meet your needs. 

For instance, if invoicing is one of your pain points, seek an automation platform that does well at automating invoices and accounts payable.

Pay attention to customer reviews, pricing, and user experience, as well. Customer reviews can give you a sense of what the automation system does well or what issues may arise.

4. Set Clear Goals

Failing to set clear goals for your automation rollout is like getting in the car and turning on the GPS but giving it no destination.

Once you've assessed your needs, you should clearly articulate the goals you hope to achieve by using a new automated system. Good goals are SMART, meaning they are specific, measurable, achievable, realistic, and time-sensitive.

For instance, your goal may be to cut the time you spend doing manual data entry by 50% within three months.

5. Get Buy-In From Stakeholders

Setting clear goals also provides a vision to your stakeholders, including executives, employees, customers, and investors, can buy into. Automation can be scary for those used to traditional methods, so explain how automation will help your organization meet its accounting goals. Solicit questions or concerns throughout the transition and beyond.

Making the people your company depends on feel included in the automation process will make them more likely to support its development. Similarly, including their opinions or expertise can help ease any fears about the new system.  

6. Create A Timeline And Budget

As you plan the transition to your new automated system, designing a timeline and budget will ensure the process goes smoothly.

Creating a timeline with specific deadlines will help you avoid delays and lost customers. Organize milestones within each of the three major phases: assessment, implementation, and reassessing.

When making your budget, you should account for both the initial startup costs, such as the prices of software and hardware upgrades, and the continuing costs of automation services, such as subscription fees.

7. Pilot Test The Solution

Pilot testing allows you to try out your new automation tools in real time. You'll run a test in a specific area of your accounting processes without implementing changes system-wide. Then, if there are issues you need to address, you'll know before they become significant.

First, decide which segment of your accounting process you hope to test. Next, run the test and assess results based on your goals and objectives. You can then decide whether it's ready to incorporate — or if you need to do some problem-solving.

8. Train Your Staff

Using the new system will require a staff training program so employees know how to use automation tools and navigate changes to their workflows.

Start by asking, "What skills or information will each employee need to do their job?" The answer to this question will provide a training profile. You can use one profile with multiple employees in the same position. Next, create assessments so you can check employees' understanding.

Some companies create online modules, while others may prefer a more hands-on approach.

9. Monitor And Evaluate Your Results

"Set it and forget it" is not an advisable strategy for implementing your new automation system. You'll need to develop a way to monitor and evaluate if the system is performing as it should.

Before you begin, get out your goals so you have benchmarks by which to measure your results. You should track key metrics including data accuracy, processing times, and cost savings.

Next, set your monitoring plan and schedule time to implement it. Finally, measure the results of your plan against the benchmarks you set, and evaluate whether the new solution is meeting your goals.

10. Make Adjustments As Needed

Monitoring the accounting automation software allows you to recognize the need for adjustments. If you identify a weak point in the system, you can develop a strategy to address it.

The adjustment step is also an excellent opportunity for your employees and stakeholders to provide valuable feedback. This will allow you to get a sense of the system from experts and people who are working with it on a daily basis.

11. Keep Your Software Up To Date

Maintaining the most up-to-date version of any accounting automation tool is exceedingly important. There are plenty of reasons to run the necessary updates, but these are the three most important:

  • Security: Your clients' sensitive information is your responsibility, and breaches can cost you relationships and money. In 2022, data breaches cost American companies an average of $9 million. So running the recommended updates for your software ensures you have the most recent protocols to deter would-be hackers from accessing your company's financial records.
  • Performance: Maintaining up-to-date software ensures your finance and accounting automation systems are as efficient as possible.
  • Bug fixes: Relatedly, updates routinely provide small patches or tweaks to programming or protocol. Updating your software can correct issues that have arisen within the software itself. If you don't keep the system updated, you're susceptible to costly crashes that can set your invoices back ages.

12. Back Up Your Data Regularly

Technical issues and emergencies, like devices breaking down or hacking incidents, can happen at any moment. Losing accurate financial reports, expense reports, or accounts receivable info can devastate an organization. Additionally, a company that cannot produce these records may be in defiance of both its own bylaws and external regulations.

That's why building regular data backup into your maintenance protocols is essential.

13. Stay Organized When Implementing Automation

An organized approach to implementing automation accounting software eases troubleshooting if you encounter problems and promotes cohesion and transparency across your teams. Document how your automated processes work, including how they're configured and who has access to its various features. Consider assigning specific areas of responsibility to different team leads. That way, you're not relying on a single person in case you need to make changes to the system or fix an issue.

Don't forget system maintenance either. Create a shared, digital calendar to provide your team regular reminders of necessary action items. Be sure to include software updates, data backup, and system reassessments.

14. Be Patient And Celebrate Your Results

Transitioning from an old accounting system to an automated one can be a long process. Celebrating the small steps forward at regular times can motivate you to stick to the plan without feeling the need to rush ahead or the guilt of lagging behind. Plus, celebrating together is another great way to increase the buy-in of your employees and stakeholders.

Consider setting goals that are increasingly more difficult. The first week you may want to celebrate every "first," such as the first processed invoice or first automated account reconciliation. A few weeks later, the goals you celebrate can become more complex. You may set a goal to use your automated system to solve an issue with your accounts payable statements.

Transform Your Startup's Accounting Efficiency With The Right Solution

By using automated accounting tools, you can reduce the amount of human intervention required for manual tasks in your company's financial operations. You can also improve your operations and move toward business growth with better data and insights.

With the help of a reliable accounting automation platform, you and your finance team can enjoy peace of mind knowing your data is accurate, accounts are reconciled, and invoices are processed.

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