How to Automate Accounting Processes in 5 Easy Ways
Tired of the old, slow-moving accounting processes? Automation comes to your rescue. Learn how to automate accounting processes so you could speed things up in your business.
Speed is a requisite in business, whether you’re making a decision, fulfilling orders, or processing your finances. But some tasks become too repetitive and time-consuming. Good thing, automation can help you complete these kinds of tasks in a fast, efficient, and accurate manner.
Automation in accounting allows you to manage, measure, and analyse business finances faster. This capability enables you to track in real-time the movement of your cash flow — letting you determine where you need to allocate more resources.
For instance, if the reports show that your net profit margin is negative, you can find ways to immediately identify its causes and take the necessary actions to resolve this concern.
By staying on top of your finances, you can lead your business into the path of success.
Accounting tasks you can automate
Below are some of the accounting tasks you can start automating today:
- Payment alerts and reminders
- Accounts payable
- Tax compliance and reporting (directly send reports to HMRC)
- And anything repetitive in nature
Aside from saving time, automating also minimizes errors caused by manual data entry.
How to automate accounting processes
Ready to automate your accounting? Follow these steps:
Evaluate your existing processes
When is the best time to automate? Consider these questions:
- What tools are you using to perform your accounting tasks?
- How much time do you spend on each task?
- Are you doing most of the accounting tasks on a repetitive and frequent basis?
- Do these tasks require a high level of human interaction, creativity, or mental energy?
- Do you often spot errors in your data?
If you’re spending most of your time on repetitive tasks that don’t require a lot of human interaction and mental energy, and if you’re often making errors, then it’s time for you to invest in automation.
Select the right cloud accounting software
Choose the right cloud accounting software based on the following:
- features you need,
- your budget,
- your long-term needs, and
- the other applications you’re using.
In the UK, VAT-registered businesses with a taxable turnover above £85,000 must follow the Making Tax Digital (MTD) rules in submitting their VAT returns. So when selecting a cloud accounting software, you should also check if it’s MTD ready. Even if you don’t meet the required threshold yet, choosing a software with a wide range of features will let you upgrade easily.
Read next: Best Accounting Software for Small Businesses in the UK 2021
Move relevant data into your chosen software
To ensure a successful data migration, create a plan on the data you need to transfer and the old information you must archive.
You can also ask your software provider if they can assist you in migrating your data. Asking for the help of an accountant who has experience in using cloud accounting software can also guarantee you a smooth transition.
Start automating your accounting
Once your data is ready, you can now start automating your accounting processes. You can begin with these activities:
- Customising pre-build reports
- Linking your credit cards, bank accounts, and supplier accounts to make reconciliation easier and faster
- Integrating/Syncing relevant tools such as your CRM, billing and payment apps, and customer support software
Hire a reliable accountant
Another way to take accounting off your hands is by hiring a trusted accountant. Armed with the right technology, an accountant with a wide knowledge of your industry and processes can manage your finances well. Through this, you can have more time to focus on the other income-generating activities of your business.
Automating your accounting is taking another step toward business growth. When your current accounting processes don’t work anymore, then it’s time to adapt to the developments of technology.