Accounting Workflow – How to Create an Efficient and Automated Workflow
Canva/ Sasirin Pamai
Traditionally, an accounting firm does all the bookkeeping and accounts filing by hand. Writing in ledgers with a ruler to make sure all the figures are correct and the boxes filled up correctly. For an accountant or a bookkeeper, this spells out a nightmare.
Automation has been at the forefront of today’s digital acceleration. (1) Accounting teams move towards the path of increasing efficiency to improve productivity and performance.
They are now verifying, approving, and tracking workflows that make up the accounting process with the help of suitable workflow management software.
Are we really required to automate our workflows? Is it really possible for our accounting firm to automate? And how can I get from here to there?
This guide will show you how to create an efficient and automated workflow as you transition from manual accounting to optimizing your current processes.
What is an automated accounting workflow?
An automated accounting workflow is, as its name suggests, automating your current manual processes like handwritten journal entries, ledger record-keeping, and even accounting spreadsheets.
It involves replacing manual tasks with the use of accounting workflow management software and doing them faster and more accurately, at a more reasonable cost.
Some may think of automation as the process of removing humans and placing AI-powered robots to do the job, which is not the case.
Automation transforms how accounting firms’ processes work. It aids accountants, bookkeepers, and business owners to grow and scale.
Benefits of an efficient and automated workflow
With the right workflow software, accounting firms can take advantage of automation
To save time and money
With more than 50% of manual accounting tasks can be automated, (2) it also means there is more than half a chance to achieve faster task completion and eliminate recurring tasks.
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Lesser human intervention in what used to be manual processes reduces operational costs and frees up more of your accounting team’s time.
To improve the quality of accounting processes
Decreasing if not totally removing human error leads to higher integrity when doing accounting processes. It improves the overall quality of work produced and efficiency in the delivery of financial reports. This results in client satisfaction which increases client retention too.
To increase the accessibility of data
Traditional accounting practices are limited due to paperwork and other forms of physical documentation. With automated workflows, record-keeping and file storage become available online and more accessible to more people.
Cloud-based databases can also make new clients’ information and related documents more searchable.
To help establish legal compliance
The accounting industry is heavily connected with tax preparation and compliance and by automating these processes, accounting statements become aligned with tax document standards and conformed with local regulations.
Workflows in accounting that you can automate
There are accounting firms that handle more AP and invoice management compared to the others while some have more extensive sales processes.
Knowing what accounting tasks your team has the most volume of manual work allows you to choose which workflows you will automate first.
Data entry and categorization workflow
Data entry may be one of the most time-consuming accounting tasks that slow down your accounting team’s productivity.
With the added burden of sorting these entries, it will be more prone to errors, missing values, duplicates, and incorrect classification of accounting data.
- Expense workflow – Receipts, bills, reimbursement forms, and other types of expense paperwork fall under this task, which results in piles, paperclips, and enveloped documents.
Some teams may still be using the traditional accounting practice workflow of printing expense spreadsheets and attaching original receipts to the reports.
Procurement and sales workflow
When it comes to supplier and sales processes, documents like requests for proposals, information and quotation, purchase, and sales orders are essential. Without the proper record, customer and supplier relationships, service delivery timelines, and audit trails will be highly affected.
Credit card and bank statements reconciling is one of the most tedious accounting tasks especially when handling multiple accounts.
A reconciliation workflow that is not yet automated may mean manually encoding each transaction to create journal entries which can be lengthy and takes a lot of your team’s time.
Month-end reporting workflow
Month-end reports are accounting processes that require speed and precision. Rushed monthly closing of books, especially when manually done, is often subject to mistakes and can result in higher inaccuracy.
8 simple ways how to create an efficient and automated accounting workflow
Here are our top tips to prevent adding risks and bottlenecks, and make sure you are optimizing your accounting workflows:
1. Check your current accounting workflow processes
Do your workflow processes provide firm-wide visibility? Does my current workflow promote efficiency? Will automation affect the quality, time, and cost of my accounting services?
By understanding what you have, you give a more objective perspective to decision-making and become more aware of what you need to work on to improve your workflow process.
Say, for example, an accounting firm needs help with invoice management. Their accounting team spends more time on the invoicing process than all the other tasks combined.
This will require prioritizing the automation of the AP workflow. By doing so, it will help track, process, pay, and manage invoices thoroughly at a much faster rate.
But before that, it is important to choose an accounting workflow solution first.
2. Select a suitable accounting workflow software
Check the accounting automation options available that will answer what type of automation you need. Weigh the benefits and disadvantages of using these automation solutions along with available online reviews and first-hand recommendations.
Focus on work management software that aligns with your business processes to support a scalable growth that lets your staff members handle all types of client work.
3. Plan and prepare your data and team
When you have chosen your workflow software, the next step is to have all of your accounting data in order. This will help in a more organized migration from one system to another ensuring a fast and smooth-sailing setup.
Bear in mind that before installing the new workflow, you need to educate the involved staff members and ensure all parties are on the same page. Do not forget to inform your vendors and clients as well.
4. Test out the new workflow with existing business operations
It is advisable to start automation with routine tasks which are important in the daily operations of an accounting firm. (3) This may include invoicing, reporting, recurring payments, and reconciling bank records, which are essential but takes a lot of time.
Workflows relating to these activities are the best test-run areas to make sure your migration activities will not create negative rippling effects on other accounting tasks during the first try.
Be sure to test the new workflow first with your IT and accounting specialists before disseminating it to the rest of the team. It will minimize risks and losses if things go sideways.
5. Ask for feedback while implementing workflows
When the rest of the team is already using the implemented workflows, be sure to note milestones so you can discuss observations and assess relevant productivity metrics.
Does the new workflow improve performance? Are clients more satisfied with your service delivery? Were the bottlenecks addressed?
Checking in on your team, clients, and vendors during the onboarding process can help you properly evaluate the success or failure of the new automated workflow.
6. Modify changes to the accounting workflow
Testing once does not guarantee immediate success and it is best to reiterate execution that takes feedback into account until it works out smoothly. The workflow system should be functional for them since they are the primary users of the new workflow.
Be sure to prioritize triggers and dependent actions especially when there is a third-party integration involved. This way, you know your new accounting workflow does its purpose and that intended results are consistently delivered
For example, an invoice captured should trigger a notification with your AP team and this action will prompt automatic conversion of format. The converted file will then be stored in a specified folder for proper documentation.
7. Add more automation features based on the new workflow system
After executing the new workflow wrinkle-free, you can start putting on features that will help make the accounting task more efficient.
If your new expense workflow involves scanning and sorting receipts, you can check if the accounting software allows you to work in bulk, specify additional details, and have flexible volume limits without breaking your budget.
Don’t forget to create task templates for new hires and include new workflows in the onboarding and operational database to make it more searchable and within everyone’s reach.
8. Supervise new accounting workflow management
Improve efficiency by constantly monitoring changes and how your team responds to the new accounting workflow. The new accounting workflow should be able to increase the productivity of each team member and collaborate as a whole
Be sure to carry out the necessary software updates and look into new automation solutions they offer if they will suit well with your organization’s accounting demands.
Is your business ready to take the leap?
Evaluate your existing processes and how it sits with your current business operations. Assess accounting workflow automation pros and cons with key stakeholders, IT, and your team members.
Deliberate on questions that will help you take the next steps in achieving more efficient workflows in your accounting system.
- How much time does it take for the current workflow to complete?
- Which steps in the workflow are essential and which ones are not?
- Do you encounter obstacles in your existing workflow? How do you handle them?
- Does your current accounting technology answer your accounting concerns? Will you be taking the same tech stack as you scale?
- What parts in your current workflow will benefit the most if automated?
You may experience challenges along the way like additional funding and resources, training staff members, giving updates to clients and vendors, establishing a change management system to address issues, and creating measures to quantify success and identify areas that need improvement.
Start your accounting automation with ENVOICE
With the help of an accounting automation software solution tailor-fitted to your accounting firm’s needs, you’ll be ready to automate your accounting workflows trouble-free.
Streamline your processes using Envoice. Make data collection a breeze with easy uploading, submitting, and storage.
Extract accounting data in seconds and save hours spent creating entries to work on more important matters. Manage your expenses securely, accurately, and more confidently with top-of-the-line AI technology.
Envoice’s advanced automation helps analyze trends and data patterns, categorize accounting entries, and generate reports to optimize any accounting workflow system. Get your free trial or request a demo today!
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