Accounting Course of Automation: Learn how to Get Began and What to Take into account
By: Amita Jain on July 19, 2023
Accounting leaders able to introduce automation into their enterprise operations could also be hesitant to take action due to the overwhelming considered overhauling their common processes.
We have taken on a few of that burden for you with this automation information that breaks down the automation of accounting processes into six easy steps. This information is backed by Gartner analysis [1] and professional recommendation from Michelle Kvello [2], an Australia-based finance officer who helps small and midsize companies (SMBs) scale their operations.
What’s accounting automation?
Automation is when duties, say posting a journal entry for depreciation or sending a month-to-month efficiency report, occur with out your involvement. These duties are programmed, in order that they proceed even whenever you’re sleeping.
It may be so simple as utilizing accounting software program or as elaborate as leveraging automation instruments, similar to robotic course of automation , enterprise course of administration , low-code/no-code platforms , and AI software program , to streamline processes involving a number of software program techniques or individuals.
Numerous duties go into accounting, and for all, accuracy and accountability are paramount. This results in a cycle of extremely repetitive chores that comply with a transparent set of steps and outlined guidelines. refers to programming these every day, repeatable duties to make the workflow extra environment friendly. A research reveals that 89% of accounting operations are extremely automatable [3].
Automation not solely saves time and prices by eliminating repetitive duties however consolidates disconnected instruments, similar to invoicing and accounting software program, to make it simpler to maneuver knowledge round, giving better management and visibility over the information that actually matter for enterprise. Let’s be taught by an instance.
Say you need to automate payroll processing. You possibly can undertake payroll software program that mechanically calculates tax deductions, contributions, and web pay for every worker. This can be a easy manner to make use of know-how to make your processes quicker and extra correct. However, there should still stay some guide processes that take up your time, similar to reimbursing staff for enterprise bills or calculating extra time. Automation instruments can be utilized right here to extract expense knowledge from digital receipts or pull in hours from time-tracking software program to feed the whole lot into your payroll system, all with out you having to elevate a finger.
6 steps to automate accounting
Step #1. Doc the “why” and “how” behind your accounting practices
Begin by learning your present workflow completely. It’s vital in bettering your processes.
Kvello factors out {that a} widespread problem companies face in accounting is outdated processes, which have been adopted for thus lengthy that nobody questions their want or validity anymore. That worsens when workflows aren’t documented and depend on verbal instructions from one particular person.
“An efficient technique to map your present workflows is thru interviews with your corporation and finance employees. It’ll assist who’s concerned at each level and perceive who advantages from the outcomes. This could be a revealing second, because it may very well be the primary time you are deliberately reflecting on how applicable your processes are to your wants.” Michelle Kvello Founder and CFO at Lantern Companions
Professional tip Hint the whole lot when documenting workflows: from a single job, similar to pulling knowledge from an bill that landed in your e mail and recording it in your accounting system, to a whole organizational course of that covers completely different techniques and enterprise domains and requires guidelines for routing selections, say bill processing for cost .
Step #2: Establish alternatives for automation
Now that you just perceive your present accounting workflow, select the processes which might be prime candidates for automation. Search for duties that take up loads of your time and don’t want a lot of a human contact. Some cues to identify them:
Repetitive duties: You do these duties repeatedly, similar to getting into monetary knowledge right into a spreadsheet or sending out invoices. If you end up pondering, “I’ve finished this a thousand occasions earlier than,” there’s a superb likelihood it may be automated.
Time-consuming duties: If a job is rule-based and takes a very long time to finish, it might be an excellent candidate for automation. As an example, matching your monetary data and financial institution statements to identify discrepancies or month-to-month closing course of main as much as monetary report technology.
Duties with excessive error charges: Accountants dread errors, usually double- and triple-checking their work. Hand over duties with excessive error charges to a pc for constant, correct outcomes. These might embrace calculating taxes or payroll deductions.
Duties that require a number of approvals: If a job requires thumbs up from a number of individuals earlier than it may well transfer ahead, automation is usually a game-changer. Say, buy orders that have to be accepted by completely different departments or expense reviews requiring a number of signatures. Plus, it’ll free your monetary brains to focus extra on analytical than administrative duties.
In accordance with Software program Recommendation’s survey, payroll is often the primary accounting perform companies automate*.
Professional tip When selecting what to automate, Gartner suggests choosing a job that’s extremely guide and intently scrutinized, similar to creating journal entries. It’ll construct your crew’s confidence in automation. As soon as they see the advantages in motion, they’ll be extra open to adopting automation in different areas of accounting [4].
Step #3: Choose the suitable automation instruments
Completely different automation applied sciences cater to completely different wants, and infrequently a mixture of them is required [1]. Your aim is to determine one of the best match in your use case.
RPA: RPA platforms are greatest used to automate repetitive duties with clear steps, similar to inputting bill particulars to your accounting system, requiring little to no decision-making. RPA doesn’t alter the method however mechanizes it for accuracy and pace. Do you know one-third of accounting duties are appropriate for RPA [3]?
Instance of course of automation with state of affairs builder ( Supply )
Scripting: Scripting is a decades-old and extra prolific technique of automation that requires programming languages similar to Python or JavaScript. It’s greatest used when you’ve got a coder in your crew and must combine two broadly used techniques, similar to accounting and payroll, seamlessly whereas retaining flexibility.
Constructed-in-workflow: These are options accessible in your software program to create customized course of flows. Any such automation is very dependable because it’s finished throughout the software program. As an example, utilizing a built-in workflow in an invoicing resolution to mechanically ship reminders for overdue funds.
Instance of software program to schedule an auto-reminder for bill cost ( Supply )
Low-code utility platforms (LCAPs): Low-code or platforms are greatest when it’s worthwhile to automate new processes that require “new,” user-friendly, and enticing person interfaces (UIs). A easy instance is making a customized dashboard for monetary reporting that populates knowledge from completely different locations.
Low-code accounting automation software instance to edit and automate workflow ( Supply )
Integration platforms: Integration-Platform-as-a-Service (IPaaS) instruments simplify integration by linking a number of techniques by API abstractions, flow-control logic, and knowledge mapping instruments. They’re helpful when automating a course of that requires little to no human enter throughout purposes. For instance, integrating CRM software program knowledge with accounting software program to enter gross sales transactions.
Instance of integrating purposes in an automated workflow ( Supply )
Enterprise course of administration (BPM): BPM options digitize processes throughout the enterprise. It makes use of IT to automate end-to-end processes involving a number of techniques and folks. For instance, automating accounts payable (AP) processes , from producing PO to creating the cost and including it to your books. Although the demand for AP automation has led to sturdy options within the area, BPM options will also be used to combine such processes.
Instance of automated routing of requests all through an organization ( Supply )
Kvello emphasizes that selecting an automation software usually requires some adjustment to your present processes to greatest make the most of the know-how.
“Automation instruments are designed for scalability and shouldn’t be overly personalized to suit particular person enterprise wants. Companies usually go flawed once they attempt to pressure these instruments to imitate their guide processes totally. This strategy can result in undesirable or incorrect outcomes.” Michelle Kvello
Professional tip Change to cloud-based software program. That can make automating your corporation processes a lot simpler. Cloud techniques are constructed to make it handy to work and collaborate with groups and shoppers anytime, from anyplace, with out compromising on knowledge security.
Step #4: Consider your crew’s expertise and capability
Now that what and tips on how to automate, ask your self what can feasibly be automated given your crew’s expertise, platform capabilities, and supposed outcomes [1]. Kvello additionally advises contemplating the administration of the system post-implementation. “Consider: Who would be the go-to professional for any troubles? How will an automatic system evolve with the enterprise?”
The extent of expertise you will want will change with the automation software program you employ. Some instruments are designed for “citizen builders,” i.e., enterprise customers with primary technical information and minimal to no coding expertise however good course of know-how.
Citizen builders: In case your crew consists of citizen builders, your software choices will slim all the way down to RPA, LCAPs, and built-in workflows . Integration platforms may be manageable for barely superior citizen builders.
Skilled builders: When you have reasonable to superior builders or coders, you possibly can discover any automation software, which will provide you with extra customization and functionalities.
Exterior experience: In case your crew lacks the required expertise, think about outsourcing or hiring an skilled skilled who focuses on automating accounting processes. However regardless of that, think about coaching or hiring somebody in-house to take care of your techniques after undertaking completion.
Professional tricks to nurture citizen builders in your accounting crew Begin with low-code or no-code platforms (LCAPs). These platforms are glorious beginning factors for aspiring citizen builders as they allow creating purposes by intuitive drag-and-drop interfaces, sparking creativity.
Arrange workshops and coaching periods. Conduct studying and growth periods on using LCAPs and RPA instruments to offer help and encourage members to create their very own options.
Designate an IT level of contact. Assign an IT skilled to help your accounting crew. This creates a supportive group inside your corporation the place questions will be requested, and experiences will be shared to empower your citizen builders.
Step #5: Consider the prices and ROI
Many companies (39%) wrestle to seek out worth in automation on account of a scarcity of automation tradition and adherence to previous strategies*. Fight this by projecting the potential returns on funding (ROI) from automation. Kvello recommends a easy components to quantify worth derived from automation: divide the financial savings or worth gained by the price of instruments and expertise used.
Whereas prices are sometimes evident, she suggests calculating your financial savings by contemplating:
Headcount financial savings: Automating repetitive duties frees up employees for extra value-added, complicated work, saving on potential hiring prices for mundane knowledge entry jobs.
Error discount: Automation minimizes guide accounting errors that in any other case require detailed scrutiny by accountants. Save man hours and energy spent in rework.
Authorized value financial savings: Automated techniques precisely deal with duties similar to payroll, decreasing authorized prices that could be brought about on account of inaccuracies.
Improved money stream: Automation aids in accounts receivable and payable, protecting your money stream and provider relationships wholesome.
Deal with value-added actions: With automation dealing with routine duties, your crew can deal with growth-oriented actions.
Time financial savings for leaders: For small enterprise house owners juggling a number of roles, automating accounting frees up beneficial time.
Bear in mind, the aim isn’t simply to save lots of on prices but additionally to enhance effectivity, accuracy, and strategic focus.
Professional tip Increase your focus past conventional metrics. Take into account non-traditional metrics that will not be simply quantifiable however are important to attaining your corporation’s short-term and long-term goals.
Step #6: Appoint a undertaking supervisor
To stop your automation tasks from stalling, designate a undertaking supervisor. This particular person will create a roadmap, handle the undertaking, and guarantee easy execution, serving as the principle level of contact and coordinator for duties, sources, and timelines.
Ideally, they’ll have full information of accounting workflows alongside undertaking administration experience. You can begin by hiring internally, particularly from the accounting or IT crew. If essential, think about an exterior marketing consultant specializing in accounting automation.
Professional tip No undertaking goes precisely as deliberate. Permit your undertaking supervisor the pliability to regulate plans, rent or practice employees, and handle the price range as wanted.
Kickstart your automation journey now!
Automation isn’t about changing accountants. It makes their workload simpler and workflows extra environment friendly, permitting them to deal with what they do greatest: providing strategic recommendation, constructing relationships, and contributing to enterprise progress.
So, are you able to tackle an automation journey of your individual? It might appear daunting at first, however with cautious planning, you’ll reap its advantages. Let’s shortly recap what we’ve discovered.
For extra steering on what processes to automate and the instruments to pick out, schedule a name or click on right here to speak with a software program advisor. Or browse our software program purchaser’s guides for , , and different automation applied sciences .
Word: Particular software program merchandise referenced on this article are examples to indicate a characteristic in context and aren’t supposed as endorsements or suggestions.
