Do you know 83% of accountants believe investing in digitization can help accounting firms keep up with the market trends? Indulging the heap of paperwork isn’t what the market demands these days. Automation and optimization of resources are leading the race. A study by IBM shows that among cross-industry business process categories, managing financial resources is the most automatable category. This includes automating the payroll, revenue accounting, accounts payable and expense, and audits, etc. In case you’re wondering, automated bookkeeping is the process of getting the finance work done using artificial intelligence and machine learning technologies – mimicking human data entry.
Let’s dive in to know why automating bookkeeping is crucial for business and how it leads to a way to streamline financial records, effortlessly.
Significance of Automated Bookkeeping – A Quick Glance
In an era of technology where machines are taking the burden off of human shoulders, investing in digitization is the right approach for financial businesses. The redundant tasks that a machine can do let employees focus on more productive tasks resulting in cost reduction and resource optimization. According to research by Airbase, 38% of employees spend more than one-fourth of their productive hours on manual accounting tasks.
Let’s take a look at the benefits of effortless bookkeeping and accounting operations.
Automated bookkeeping and accounting reduce the time spent on routine tasks that don’t require much technical skills. Instead of spending productive hours on manual data entry, the team can concentrate on the more practical tasks that require human expertise such as data analysis, strategic decision-making, process improvement, etc.
With an automated bookkeeping process in place, there’s no need to wait until the team updates the record in the system. Digital bookkeeping keeps the records and data up to date, leveraging accountants and businesses to work with real-time insights.
With manual data entry and record updating comes the chances of error. Automated accounting and bookkeeping are less error-prone and businesses are less likely to have wrong, duplicate, or missing records.
According to research by Airbase, 11% of the teams report spending almost 50% of their billable hours on manual bookkeeping tasks. Automating the bookkeeping process saves much of the employee’s time and lets them focus on non-menial work, hence saving operations costs.
Unlike paper records or simple desktop files, automated bookkeeping platforms guarantee robust data security and privacy. It restricts public access to records and lets only authorized people have hands-on crucial data by incorporating reliable security protocols such as encryption, multi-factor authentication, etc.
7 Financial Operations Automated Bookkeeping Is Streamlining
Incorporating digitization in the firm helps businesses to streamline and automate accounting tasks. Intelligent automation improves efficiency, reduces cost, and aids organizations in making informed financial decisions.
Calculating and tracking a company’s payroll manually can be nerve-wracking and error-prone. Moreover, in many regions, there are laws and regulations to follow and in case of negligence, there can be significant penalties. Automating the payroll system not only lets you comply with these regulations but makes the process flawless eliminating the risk of human error. Through automated bookkeeping, the payroll feature tracks employees’ workable hours and calculates their salary by taking their leaves, deductions, and bonuses into consideration. Moreover, the payroll tax amount is calculated automatically along with generating paychecks.
Invoicing in finance firms is a cumbersome and time-consuming process, especially if the organization is still relying on manual data entry and paper invoices. 66% of businesses claim that with so many invoices coming in and out, processing them takes at least up to five days per month. Automated bookkeeping saves labor costs and time by minimizing administrative tasks. With intelligent OCR in place, businesses can digitize their records in just one click. This makes the entire invoicing process effortless and increases the system’s accuracy.
As per PYMNTS.com, 87% of the organizations with automated tasks reporting have shorter processing time, and 79% state that automated accounts payable facilitated them in increased team productivity. With automation in place, organizations can take advantage of early payment discounts, speeding up the process and hence improving cash flow.
Traditionally, when suppliers send invoices electronically, the bookkeeping team has to manually get approval from the manager along with adding them under accounting records and filing for audit purposes. With automated accounts payable processes in place, the system automatically applies the correct category code and assigns it to the relevant person in the approval workflow. This practice not only saves time but also reduces the chances of fraud and data breaches, keeping confidentiality intact.
Customer satisfaction is the core of any business and achieving the maximum customer happiness score is the ultimate goal. Automation of accounts receivable streamlines the data collection and retrieval processes improving customer relationships. With automated bookkeeping in place, companies can automate statement issuing, payment posting, and report generation. This lets the employees focus on more strategic tasks along with making the finance process efficient.
Sorting transactions is one of the primary tasks of the accounting firm. Automated Bookkeeping platforms leveraging machine learning technology can automatically categorize transactions into relevant groups. For instance, if a firm pays subscription fees for a CRM and some utility bills, the bookkeeping platform will instantly put them under the software expense and office expense categories, respectively. Manually doing so is not only time-consuming but there’s a high possibility of errors. Moreover, with just a few clicks, businesses can have customized reports with real-time and up-to-date data.
Reporting is a crucial aspect of any business, financial or not. The key objective is to provide a transparent and comprehensive view of company finances for informed decision-making. Automation allows businesses to prepare financial statements within a few clicks over a specific time period.
Traditional Bookkeeping vs Cloud-based platforms – What to choose?
Traditionally, many organizations have in-house accounting and bookkeeping software that is as good as simple Excel sheets and documents. In addition, access to documents is time-bound and requires manual data entry which is time-consuming. On the other hand, automated cloud bookkeeping platforms offer streamlined processes with AI-powered OCR data extraction and the ability to access from anywhere after authorization with proper data security protocols in place.
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