The use of software to complete common bookkeeping tasks is known as automated bookkeeping.
If you’re one of the millions of people who don’t enjoy manually entering all your business transactions into your accounting software, you can hand those repetitive bookkeeping tasks over to a bookkeeping automation solution.
Bookkeeping automation makes the process of recording financial transactions (through data entry) much faster, easier, and less prone to human error. According to the PwC Finance Benchmarking Report 2019, finance teams can save up to 30-40% of their time with finance automation.
In this article, we help you understand how bookkeeping automation works to help you understand why it presents an opportunity, not a threat.
How Does Bookkeeping Automation Work?
High-quality bookkeeping automation tools work by extracting the important data from your receipts, invoices, and other financial documents.
They then use this data to maintain your accounts, and keep an accurate record of all the money coming into and going out of your business.
This helps business owners and managers like you avoid spending time on mundane tasks like data entry and account maintenance. Automated bookkeeping is also more efficient and accurate than manual bookkeeping and allows little opportunity for human error.
An increasing number of business owners across various industries are now adopting bookkeeping automation tools. So, let’s take a look at how these tools typically work.
1. Scan Your Invoices
To start the process of bookkeeping automation, you simply need to scan your invoice or receipt using a mobile app. Taking a photo of the receipt would also work, as long as the image was clear and sharp.
Once you’ve scanned or photographed all your receipts, you need to prepare soft copies of them. Most bookkeeping automation tools support file formats like jpg, png, jpeg, and pdf. If your business usually works with digital invoices to begin with, then this process will be even easier for you.
2. Send an Email
Most bookkeeping automation tools will provide you with an email address customized especially for your business or company.
Once you’ve created soft copies of all your receipts and invoices in the appropriate file formats, you simply have to attach the files to an email and send it to this customized email address.
The best bookkeeping automation tools will ensure that your data is completely secure within their system.
By sending this one email, you’ll be able to quickly enter all your transactions into the bookkeeping automation tool. The tool will now extract all the details of each transaction from your digital receipts and invoices, entering the data into the appropriate fields of your accounting software automatically.
3. Integrate with Your Finance Software
The best bookkeeping automation tools support integration with a number of popular accounting and finance software.
Simple and quick integration with accounting software is an important feature that you should look for when choosing a bookkeeping automation tool for your business.
After the integration process, you’ll be able to quickly send the automatically extracted transaction data to your accounting software. As a result, maintaining your accounts and calculating your taxes will become easier than ever before.
4. Manage Your Documents
Once your receipts, invoices and other financial documents have been entered into the bookkeeping automation tool, you’ll be able to manage them easily and keep them in order for future reference.
You can store the financial documents in different folders within the tool, separated by date or category. You can also extract the relevant data from these documents and then export it as a CSV file for record-keeping, filing taxes, or creating profit and loss statements.
Is Bookkeeping Automation a Threat or an Opportunity?
Accountants may perceive bookkeeping automation as a threat given the speed, efficiency, and ease-of-use that bookkeeping automation tools offer.
However, it’s important to understand that automation is meant to empower, not replace the accountants.
Bookkeeping automation tools make an accountant’s job easier. It allows them to work more efficiently by focusing on tasks that require human touch, such as strategic planning.
Below, we discuss how these tools can benefit all the stakeholders involved in the bookkeeping process.
How Bookkeeping Automation Helps Accounting Professionals
Bookkeeping automation tools like ASSIST help accounting professionals by dealing with most of the grunt work involved in the bookkeeping process.
For instance, some of the best tools in this category will simplify or automate tedious and mundane tasks like gathering receipts, downloading transactions, extracting data from invoices, and sending reports.
Since these mundane and time-consuming tasks are taken care of by the bookkeeping software, accounting professionals are left with more time to provide their clients with premium advisory services rather than performing just the basic compliance tasks.
And because they now have the time to provide higher-value tax advisory and consultancy services, accounting professionals will also be able to increase their income by charging more for their work.
Alternatively, accounting professionals can take the extra free time created by bookkeeping automation and take on more clients at lower prices. A good way to do this is to switch to packaged, flat-fee services that are easy to scale up.
With most of the mindless, time-consuming tasks taken care of, accounting professionals using this model will be able to take on many more clients than they would’ve had the bandwidth for, without the automation tools at their disposal.
How Bookkeeping Automation Helps Business Owners
Automation tools make basic bookkeeping faster and cheaper for business owners, while also reducing the risk of errors.
Low-cost bookkeeping automation tools allow small business owners to reduce their overhead costs and redirect those funds towards business growth.
For example, you could spend this money on tasks that can’t be automated such as tax consultations.
Bookkeeping automation tools also provide business owners access to real-time data. These tools will automatically update your records as soon as a transaction takes place. So you no longer need to wait for your bookkeeper to provide you with a report to know how the business is faring financially.
Automated bookkeeping also reduces common accounting errors like duplicate entries, missing records, etc.
The Future of Bookkeeping
Bookkeeping automation can earn accountants and business owners plenty of hours back each week they’d otherwise spend on repetitive tasks. Accountants can focus on providing high-value services such as consulting rather than entering data manually, while business owners can focus on other strategic aspects of their business.
Our bookkeeping automation tool ASSIST helps you take the lead in implementing best-in-class accounting technology for your company. If that sounds interesting, why not try ASSIST?
Recent Comments