Automation in accounting is an overused concept but isn’t that also the point of it? Automate repetitive, time-consuming, and data-heavy accounting tasks that computers can do faster, cleaner, and to scale. Automation has been changing accounting processes for decades. Now, the pace of progress in accounting technology is hastening change in how business is done.
Would it surprise you to learn that entrepreneurs and small business owners are catching up on the benefits of automating accounting?
Why is this happening? My bet would be time and money. The very same precious resources that you create with automation are keeping you from looking into the benefits of automation in accounting in the first place.
In this lucky month of March 2021, here are 5 easy-to-remember benefits of automation in accounting.
Warning: the following is adage, motto, and slogan heavy.
1. “Work smarter, not harder” by automating accounting
Accounting technology prevents wasted time and money on essential accounting tasks such as
- Identifying and categorizing transactions,
- Tracking expenses,
- Journal entry,
- Generate financial statements (income, cash flow statement, and balance sheet),
- Document management, and
- Closing the books.
Automation reduces hours spent on those activities, redirects talent toward more profitable activities, shrinks human error and clean-up time. Automated bookkeeping and accounting ensure your team and technology work smart.
2. Accounting technology helps you to avoid being “penny wise and pound foolish”
Business owners are often “penny wise and pound foolish” because they’re in the weeds of their company’s financials. With the efficiencies gained and time saved by automating recording transactions, reporting, and updating the general ledger, your accounting team won’t be chasing after pennies at the expense of, say, revenue management.
Consider the following two scenarios before you invest in new technology.
Scenario A: Your top choice is a top-rated enterprise resource planning (ERP) software that will handle accounting, inventory management, sales, and human resources. It’s an investment, but you need something as healthy as your profits. In a year, your finance chief discovers that the accounting team has not taken full advantage of the tool, and a consultant is needed.
Scenario B: You decide on an economical software solution that will go a long way to automate bookkeeping, make financial reports more manageable, and give you on-the-go updates with a customizable dashboard you can access from your phone. You still need the services of a third-party tax advisor. Then, your head of finance shares that your chosen software doesn’t integrate with the payment application you currently use. You find an AP application that will work, but it requires changes to make it work.
You can avoid overspending to automate your company’s accounting by assessing your current processes, technology, and skill level to identify what is needed to achieve your business goals. When it comes to choosing accounting software, the same lesson applies. Spending too much is not advisable, neither is spending too little to be useful.
3. Automate accounting “because you’re worth it”
When you consider adopting new-to-you technology, diverting human resources to implement and train, and hiring outside consultants to save you time and money on accounting tasks, you’re going to want to know the return on investment. You’re going to want to know, is automating accounting worth it?
Calculating the ROI for automating accounting tasks is straightforward. For example, it takes six days to close your monthly books. Your bookkeeper’s pay is $900 per week (my bookkeeper is living and working in Chicago, IL). Every month it costs $1,080 in wages to close your books. You could find a less expensive bookkeeper or give your bookkeeper higher-level tasks that require analysis, trouble-shooting, and communication skills and automate expense tracking, accounts payable, and accounts receivable.
How do you calculate the value of peace of mind, your bookkeeper’s job satisfaction, or improved customer service? That’s the powerful ROI gained by automated accounting “because you’re worth it.”
4. “Set it and forget it” automation for your accounting
Remember the Ronco Rotisserie chicken slogan, “Set it and forget it”? The enduring ad slogan happens to be a catchy way to think about a truly remarkable benefit of automating accounting: the hands-off nature of technology.
Your accounting tech stack (the group or “stack” of software and add-on applications) comprises computer software programs designed to store, categorize, recognize patterns, and calculate faster and without fail, unlike humans. So, once you have a tech stack, you can set it (to a task) and forget it.
An accounting tech stack’s beauty is that it can scale with your company to handle more complexity, such as greater volumes of transactions, multiple currencies, multi-site inventory, and more complex payroll. We all love that technology enables a higher efficiency level while also reducing errors, redundancy (saving time), and risk (saving money).
5. Automate accounting so you can “just do it”
- It saves you time (and money).
- Automation enables finance to prioritize revenue generation.
- The valuable ROI.
- Automate enables your core competency.
When you automate accounting, you get powerful business insights anytime, anywhere. That means you don’t miss opportunities because you have to “crunch the numbers.” Instead, you can just do it.
If you are not reaping the benefits of automation in accounting, you need a better accounting system. inDinero is here to help you grow your pot of gold.
You don’t find a Pot of Gold—it’s hard-won. You need the tech with the talent to protect your profits. Schedule a call with inDinero today.
Quick Note: This article is provided for informational purposes only, and is not legal, financial, accounting, or tax advice. You should consult appropriate professionals for advice on your specific situation. inDinero assumes no liability for actions taken in reliance upon the information contained herein.