How to Automate Your Bookkeeping – An Actionable Guide
Let’s face it. Bookkeeping isn’t the most exciting task on our to-do lists.
But business owners must get it right. Otherwise, they’ll be dead in the water before they’ve even had a chance to get started.
There is good news, though! With accounting automation, business owners can breathe a sigh of relief and rest assured that their books are in good hands – without manually doing any of the hard work.
This actionable guide will show you everything you need to know about accounting automation – from basics like what it is and how it works, to more advanced topics, like choosing the right accounting software for your business.
By the end of this guide, you’ll be an expert on accounting automation and ready to take your bookkeeping game to the next level! So whether you’re just getting started or looking for ways to improve your existing system, this guide has something for you!
What is accounting automation?
There has been a big push for businesses to automate as many tasks as possible.
And accounting is no exception. Accounting automation refers to software and technology that streamlines and automates bookkeeping services.
This can include invoicing and expense tracking, preparing financial statements and running payroll.
Essentially, accounting automation takes the tedious and time-consuming tasks out of accounting so that business owners can focus on more important things – like growing their business!
How does accounting automation work?
New accounting automation programs can be integrated with your existing software.
For example, if you use QuickBooks Online, several bookkeeping tools can integrate with QuickBooks and automate tasks like invoicing, expense tracking, and payroll.
What’s more, the tool will automatically pull in the data it needs to do its job.
Take, for instance, Envoice. This smart capture tool uses OCR to automatically extract data from invoices and populate it in QuickBooks Online and other accounting software.
This means that you no longer have to enter data from each invoice into QuickBooks manually! All you need to do is scan or upload your invoices into Envoice, and the tool will take care of the rest.
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Benefits of accounting automation software
For as long as finance professionals can remember, manual data entry has been a necessary evil of accounting. But in recent years, accounting automation tools have made it possible to say goodbye to manual data entry for good!
Accurate data entry
To err is human, so they say, but mistakes can be costly in accounting!
When manually entering data, it’s easy to make mistakes. One wrong keystroke can result in an incorrect invoice sent to a client or an employee not getting paid on time.
A study by BlackLine, Inc. shows that over 55% of C-suite executives and finance professionals are not sure if they can identify inaccuracies in financial data before reporting.
As if that’s not enough, over 70% of the C-suite and finance professionals surveyed said they had made decisions based on inaccurate financial data. (1)
If you’re not able to find inaccuracies in your financial reports, it can lead to costly mistakes. Erroneous data can lead to companies and business owners making bad decisions. These errors can not only cause financial harm but can also damage your reputation.
Accounting automation tools eliminate the chance of human error by automatically extracting data from invoices, receipts, and other financial documents.
Most automated accounting software will also offer communication platforms that enable the entire team to collaborate on financial reporting. This way, businesses can avoid the accounting silos that often lead to miscommunication and errors.
Saves you time
If you manually enter data into your accounting software, it’s likely taking you away from more critical tasks.
Even when you hire data entry specialists or accounting clerks to do the job for you, it’s still a time-consuming and costly process.
Automation tools like Envoice can automatically extract data from invoices and receipts and post it in your accounting software – all with just a few clicks.
It frees you up to focus on other things
When you manually enter data into accounting software day in and day out, it’s only a matter of time before you start feeling burnt out. Worse, repetitive tasks increase your chances of suffering from Carpal tunnel syndrome. (2)
Bookkeeping automation takes the tedious and repetitive task of manual data entry off your plate so that you can focus on more exciting tasks, like developing new products, marketing your business, or growing your team.
Greater visibility and control
The whole accounting process involves lots of papers and documents.
When you’re manually entering data, it can be easy to lose track of where certain documents are or what stage of the accounting process they’re in. This lack of visibility and control can lead to errors and inefficiency in your accounting process.
Take the expense management process, for example. When manually processing expenses, it’s easy for employees to submit duplicate receipts or make mistakes in their expense reports. This can lead to delays in reimbursement and cause frustration for both employees and accounting staff.
With accounting automation tools like Envoice, you can gain visibility and control over the entire accounting process – from invoice to payment. With features like Envoice Archive, you can easily keep track of all your accounting documents in one place.
Envoice also offers real-time tracking of expenses, so you can quickly identify and resolve any issues that come up.
When dealing with many paper piles and accounting documents, it’s easy for things to get lost or stolen.
This lack of security can lead to severe consequences for your business – like fraud or identity theft. With the sensitivity of financial data, it’s essential to have proper security measures to protect your accounting documents.
When you automate your accounting, you can rest assured that your data is safe and secure. Envoice, for example, uses the latest security technology to keep your data safe, like 128-bit SSL encryption and bank-level security standards.
You can control who has access to your accounting data and what they can do with it.
How to automate your bookkeeping
The real challenge is to start automating your accounting processes without disrupting your business or adding more complexity.
Here’s a quick and easy guide on how to automate your bookkeeping:
Identify the areas that need automation
Start by closely examining your accounting process and identifying the areas that would benefit most from automation.
For instance, if you’re spending a lot of time on data entry or expense management, you could automate these tasks. Start with transactional accounting tasks like accounts payable and work your way up.
Choose the right accounting automation tools
There are many automation tools available on the market today. When choosing the right software for your business, it’s essential to consider your specific needs and requirements.
For instance, if you’re looking to automate your invoicing process, you’ll need bookkeeping software that offers features like online invoicing and payment reminders.
On the other hand, if you’re looking for a tool to automate your expense management process, you’ll need features like real-time expense tracking and receipt capture.
Some of the best accounting software for small businesses include QuickBooks, Xero, and Zoho Books. Add-ons like Envoice make the accounting software even better.
Assess the costs and benefits
Costs will vary depending on your chosen features and your business size.
Generally, accounting automation tools are affordable, making them an excellent investment for small businesses. Sure, you have to pay monthly subscription fees, but the cost is often offset by the time and money saved in the long run.
Additionally, when accounting processes are automated, businesses can save on the cost of hiring accounting staff. The software will work 24/seven, meaning companies don’t have to pay for overtime.
Involve the whole team
The biggest mistake you can make when automating your accounting is to try to do it all yourself.
Bookkeeping automation is a team effort and should involve the whole bookkeeping and finance team. This way, everyone will be on the same page, and you can avoid any disruptions to your business.
Let everyone know why you’re automating your accounting and what benefits it will bring. Then, get everyone’s input on the best way to go about it.
Start small and scale-up
As we mentioned earlier, the best way to start automating your accounting process is to start small. It will be tempting to implement everything at once – but fight the urge!
Begin by automating one or two transactional accounting tasks like accounts payable. Once you’ve mastered that, you can move to more complex accounting tasks like financial reporting.
As your business grows, you can scale up your accounting automation to meet the demand.
Don’t forget to test
It’s essential to test everything out before going live. This way, you can ensure that everything is working and that there are no disruptions to your business.
To test your accounting automation, start by running a few trial runs. For instance, most tools like Envoice will have a free trial period that you can use to test out the features.
After doing a few trial runs, you can go live with your accounting automation.
Monitor and adjust
Even after you’ve gone live, it’s crucial to monitor the process and ensure everything is working.
Be on the lookout for any errors or disruptions in the accounting process. If you find any, be sure to adjust accordingly.
Remember, there is no one-size-fits-all when it comes to bookkeeping automation. What works for one business might not work for another. The important thing is to find what works best for your business and to keep tweaking and adjusting until you get it right.
Do your research
Be sure to research the different automation tools available and choose one that fits your needs.
Check out consumer reviews before making a final decision. Most tools will even have success stories to help you understand what bookkeeping automation can do for your business.
Weigh the pros and cons
Last but not least, it’s crucial to weigh the pros and cons of accounting automation before making a decision.
On the one hand, it can save you time and money. On the other hand, a wrong tool is like a double-edged sword and can cause more harm than good.
So, carefully consider the pros and cons of accounting automation before deciding. This way, you can be sure that you’re making the best decision for your business.
The entire accounting process hangs on the accuracy of the data entered. No matter how experienced an accountant or bookkeeper is, human error will happen. The best way to avoid this is by automating your accounting.
This will reduce the chances of errors, but it will also save you a lot of time and money in the long run. Avoid making business decisions based on data susceptible to human error and trust the accuracy of software programs instead.
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- Don’t spend time on manual work
- Streamline processes
- Automate your invoice flow
- Integrate with the tools you rely on every day