What is Accounting Automation And What This Means for Accountants?
Automation has been a trending topic for over a decade, as it has touched every existing industry and made things better for people. From retail to the fashion industry, automation has improved things in every industry. The majority of the industry has embraced the advent of accounting automation, but skepticism can still be traced within the minds of accountants that fear being replaced by automation tools. There's significantly less information that suggests this possibility than the information that denies the same. However, let us dive deeper into this topic and understand whether this statement holds any weight, or not.
What is accounting automation?
Accounting automation information automatically carries out the manual processes that accountants earlier handled. Most general accounting processes have been automated, making things easier for accountants and companies needing accounting and bookkeeping services. It is optional for the accountant to build several ledger files and fill them manually by sifting through tons of data. Automated tools can do this in a matter of seconds, as several vital codes are built into them, allowing them to create ledgers and present reports with a few clicks of the mouse! However, one can state that automation is familiar to the industry, as accountants have used tools like Excel to automate multiple tasks. One can also state that the available tools in the market have taken automation to a new level.
Why are some accountants afraid of automation?
Tools like AI and Robotic process automation can carry out most of the processes handled by accountants, which raises some eyebrows. There is skepticism regarding the possibility of Automated accounting tools replacing humans in the accounting industry. However, this is far from the truth. The possibility of complete dependency on technology, therefore deeming accountants redundant, should not be taken seriously. On the contrary, it has been observed that there has been a constant growth in the availability of jobs related to accounting, and it is expected to grow steadily at a rate of 6% per year by 2028. An industry that is threatened by automation would not show these signs. The requirement for accountants is never expected to go down because of automation. This is because situations in the real world are only sometimes ideal, and however advanced an AI might be, it would never match the adaptability and creativity of the human mind. Accounting automation has made things easier for accountants by removing repetitive tasks requiring much effort and time. With these burdens gone for good, accountants can now focus on tasks that require creativity and balance their responsibilities better. It is therefore suggested that accounting and bookkeeping professionals embrace the advent of newer technologies and utilize these tools in their favor.
Benefits of automated accounting
The benefits of automated accounting include eliminating errors, saving time, and increasing productivity. Let us delve deeper into the benefits of computerized accounting and find out how you can benefit from the same!
- Save time: Automation allows accountants to avoid most of the manual work they would have to do if automated accounting was not in the picture. During financial closings, accountants save a lot of time by not having to reconcile accounts, as the automated accounting tool automatically checks and copies all the transactions made by a business to their dedicated accounts. Take, for example, the process of listing out all the company's expenses, which can be done in a matter of seconds, as automated accounting tools keep accurate track of all the ins and outs of a bank account!
- No risk of error or mishandling of data: Processes carried out by human beings are prone to error, and there is always a possibility that computing errors can throw accounting processes off by a significant margin. Machines and tools eliminate the chances of computational errors. They can create loads of ledger entries instantly, which implies that the risk of data manhandling is lower when processes are automated.
- Quicker access to data: Whether you store your data physically or on essential accounting tools like Excel, finding a specific data set can take a lot of time. However, with the advent of Automated accounting, finding data has become more accessible, as it categorizes and stores data safely and optimally, allowing it to be accessed in seconds.
- Cloud access: Cloud programs have revolutionized how work is done in every industry, including the accounting and bookkeeping sectors. Accountants are no longer needed to come down to a storage facility or an office to access accounts data, as cloud applications allow users to process, access, and carry all the information they can store wherever they go. This has also proved beneficial for businesses, as this eliminates the requirement of physical data storage, which costs a lot of money. Accountants can now process a payment or go through a specific document from the comfort of their homes rather than traveling to access a particular desk or a pile of papers.
- Ability to detect/avoid frauds: Industries use blockchains to store their information, as they are immutable and minimize the risk of data tampering. This implies that changes cannot be made to earlier data fed onto the network. Modification of data is recorded on new blocks, which provides businesses with a quality audit trail, allowing companies to save money on annual audits.
- Accountants can handle more creative and valuable operations: With repetitive, and time consuming tasks out of the way, accountants can take on roles that are capable of driving more value to a business. Businesses often drain plenty of resources on tasks that provide low, or no value at all. These processes can be identified, and optimized, when accountants take up advisory roles, therefore enhancing profits for the business.
- Small Businesses can avail of the same accounting services that are available to MNEs: Small businesses often fail to optimize their accounting processes because of limited availability of resources. Accounting automation limits the dependence of such businesses on extensive in-house teams by providing access to tools that can carry out daily accounting and bookkeeping activities automatically. It is therefore safe to state that accounting automation can help small businesses handle their finances as efficiently as bigger organizations.
- Instant generation of reports: Financial reports allow investors and shareholders to assess the financial health of a business. Creating a financial report can turn out to be hectic, if done manually. Accounting automation can help businesses generate these reports in a matter of seconds. It can therefore be stated that automating accounting processes can help businesses retain and attract new investors.
How can accounting automation be a game-changer for accounting firms?
Accounting firms have had to utilize the human resources available to accomplish repetitive but crucial tasks. Accounting automation can help these firms utilize their workforce more efficiently. As AIs can carry out most of the fundamental processes carried out by accountants, such as record keeping, preparation of reports, decision making based on available data, etc., firms can dedicate the workforce available to them to tasks that require higher skills and creativity. This can lead to enhanced performance of the firm. More clients can be dealt with without increasing workforce size. This is one of the many game-changing benefits of accounting automation. Moreover, the costs of these tools are relatively lesser than that of hiring a dedicated professional to carry out repetitive processes such as filing transactions, creating ledgers, and auditing. Therefore, the advent of accounting automation also allows accounting firms to save money.
Accounting processes that can be automated
Almost every basic accounting process can be automated. For example, accounts payable can be automated, simplifying payment processes. With the help of automation tools, accounting teams can track pending invoices and their due dates, which allows businesses to pay their vendors and service providers on time. Moreover, accounting process automation can help identify and flag suspicious invoices, avoiding fraudulent activities. The automation of Accounts receivable allows businesses to manage their cash flow and enhance the accuracy of invoices. Companies can use automated accounting processes to send scheduled invoices to their clients and collect payments past their due date, improving the company's financial health. When an accounting team handles payroll manually, they are observed to drain a lot of time and effort.
Moreover, growing companies stress their accounting team more when they hire new employees. However, automating the payroll processes allows businesses to avoid this and pay all their employees on time, without fail. Financial closing at the end of every month is a crucial business procedure. However, it tends to be a stressful process for the accounting team. The risk of faulty results sets in, which can be avoided if these processes are automated. The issues regarding the speed of these processes and data accuracy are handled accurately. Procuring raw materials or services from vendors requires paperwork and subsequent stakeholders' approval. However, when they are automated, a lot of time and procurement costs can be saved. Other processes, including expense reports and sales order processes, can also be automated to enhance the benefits enjoyed by businesses.
Setting up automated account processes can be hectic as it requires extensive research to identify the best automation tools for your business. Moreover, integrating all these tools into the infrastructure of your business and the optimal automatization of processes requires informed decision-making regarding the same. Doing it all alone can leave you feeling like you need help in the middle of the process. It is therefore suggested that you get in touch with accounting firms such as NSKT Global to automate your accounting and bookkeeping processes. The company has partnered with the best-automated accounting tools in the market.
Moreover, the workforce at NSKT Global is well-trained to understand your needs and help you fulfill them. With the help of the most efficient tools and well-experienced professionals, NSKT Global can help you establish an optimized and efficient infrastructure for your accounting needs. Account automation has never been more straightforward and accessible. Head over to the official website of NSKT Global, and schedule an appointment with a professional to find out why!