Most business owners are taking full advantage of automation capabilities, with advancements in the accounting industry being no exception. From quicker payment processing times to up-to-date accounting reports, tasks that were time consuming and considered complex can now be done in a matter of minutes.
Implementing automation technologies alongside your accounting practices can free up resources and give your company a competitive advantage. In this article we cover the basics of accounting automation including the benefits, the importance, and the steps to get started.
Why Should You Overhaul Traditional Processes?
Accounting was traditionally a tedious and time-intensive process, with the need to manually update spreadsheets and input data into the ledgers. Today, many tasks found within your accounting department can be automated through accounting software and interface connections.
Moving away from traditional processes gives your organization the ability to lean out, while still improving efficiency and accuracy. You no longer need to worry about erroneously entering a purchase invoice or duplicating payments.
Furthermore, the next generation of accounting and finance professionals do not want to spend hours entering transactions or manually updating complicated excel spreadsheets. They want to be able to break down large volumes of data, into more digestible pieces that help your organization reach its strategic goals, which is why overhauling traditional processes is so important.
The Importance of Automation for a Global Team
As a global organization, automating your accounting processes has become an essential factor for success. Many global companies struggle with operational silos, which result in poor communication between departments, offices and the headquarters. Often this may lead to complications or the necessity of internal audits, which results in delays and/or additional costs.
By using an efficient system, such as an ERP system, your team can seamlessly communicate through cloud-based programs, ensuring everyone is on the same page at all times. Your organization does not need to worry about data lags or poor communication, as all foreign accounting practices align with the directive of the headquarters.
Automation provides your business with a strong foundation to expand and open foreign offices without compromising your procedures and processes. Not to mention that automation supports a remote workforce. Your team does not need to be connected to a hard drive in a central office location. Instead, they can utilize the cloud and access your accounting system on demand and from any location.
The Benefits of Software Implementation
Software implementation, such as the use of our dynamic ERP System, that effectively leverages automation, yields various benefits for your organization. First, you ensure increased accuracy, from recording customer payments to generating financial reports. Many software programs have duplicate detection and access controls that minimize the risks of errors and asset misappropriation.
Another benefit is speed. Software implementation gives you access to real-time data, with your bank account communicating with your software when transactions occur. This saves your accounting department hours of manual data entry. You can simply review the transactions imported from your bank and make sure they have the proper categorization.
Software implementation can also save your business money. The cost of software subscriptions can vary based on your business needs. For example, if you choose a system that tracks inventory, you can expect to pay more compared to a standard software program for small businesses. Despite the upfront cost, your business can save thousands from reduced errors, stronger compliance with regulatory agencies, and higher productivity margins.
What Accounting Tasks Can be Automated?
There are numerous accounting tasks that can be automated, depending on your organization’s needs. Here are four main areas you can automate in your accounting functions:
Automating your AP function makes it easy for your accounting team to track due dates, leverage early payment discounts, and detect fraudulent invoices.
Automation can help you manage your cash flow through quicker invoicing and payment collection. In addition, your software can match up payments with customers’ accounts, giving you accurate aging schedules.
After the month ends, accounting departments usually scramble to review the prior month’s transactions for accuracy and generate timely reports. Automation alleviates a significant portion of the month-end close burden, flowing data in for quick reconciliations.
Payroll in China can be a draining process, especially if you are still using manual timesheet tracking. There are systems, such as our efficient payroll system, that connect with your accounting software to import hours right when the period ends. Your accounting department does not need to track down missing timesheets anymore.
5 Steps to Automate Accounting
The steps your business needs to take to automate your accounting function depend on a variety of factors, including your existing controls and your goals. However, here are a few baseline steps you can expect to take:
#1: Understand Your Current Processes
Although you can automate many of your accounting controls, not all tasks are completely effective. The tasks that are best for automation remain the ones that are repetitive, data-centered, and take little to no creativity or critical thinking skills. You want to know which controls you can automate to help your employees’ workload, not eliminate their positions altogether.
#2: Review Existing Technologies
Accounting process automation relies on having the right software program facilitating data and communication between all of your technologies. Evaluate whether your existing technology speaks to each other. This could be your inventory program communicating with your billing technology or moving your bank transactions into your accounting software. Finding inefficiencies pinpoints areas that need to be changed.
#3: Choose a Team Lead
When you are going through the automation process, it is important that you have someone appointed as the main representative or team lead who is responsible for answering all questions. This gives your employees or headquarter managers someone to turn to with any questions and helps streamline the entire process. Your team lead will be on the front lines testing the automation before the processes are distributed throughout your organization.
#4: Outline New Processes
Once your due diligence is complete, it is time to evaluate how and where your business is looking to implement automation. Break down your workflow to a granular level to uncover where your business needs to allocate resources or can improve its processes. Once determined, you can create an action plan, purchase the necessary technology, and train your staff. The earlier a new process is implemented the faster your staff can adjust, and the process can begin working to the benefit of the organization.
#5: Automate and Review
Once you have implemented the new automation processes, it is important to continuously host training on updates and tweak existing processes based on feedback from your team.
Automating your accounting processes is essential to future-proof your organization, improve productivity, and enhance accuracy. If want to know exactly what automation looks like for your organization, reach out to us today to set up a consultation with one of our team members. We want to help you take your accounting department to the next level with our ERP and Payroll solutions.
Disclaimer: all articles and its related content are the property of Moore Stephens Consulting Company Limited and may not be reproduced either in part or in full without prior consent.
Stay up-to-date with relevent issues in China.
Subscribe for the Moore - MS Advisory newsletter!