Coming up with small business ideas and making them requires you to take action. There are a lot of thoughts that go into taking that call of making it happen. The success of your business is inversely proportional to the number of sales you crack every day. It involves a lot more than just trading goods for money. Emerging technologies have been remarkably helping businesses succeed, and it is high time to understand how to leverage accounting automation. As a business owner, you need to puzzle out product merchandising, stock control, market research, advertising and marketing, customer service, negotiation, and more. It doesn’t end there. You need to understand small business accounting; cash flow, taxes, payroll, tally, ledgers, purchase orders, and other accounting tasks need to be tracked carefully. You don’t want to let an entry slip away through the cracks. In simpler words, the key to running a successful business is to keep detailed records, and that is where accounting automation software can help. This article is a part of our comprehensive small business guides – here’s how you can leverage accounting process automation in 2021.
What Is Accounting Automation?
Manual processes consume most of an accountant’s workday. Accounting automation can complete significant financial tasks automatically, or instantly. The concept of automation for small businesses in accounting is not entirely new; there have been different forms of computerized accounting systems since the late 1800s (source: https://www.accountingnotes.net). Until recently, accounting automation tools were unable to work without human intervention. Accountants mostly operated them, and the manual operations still took a tremendous amount of time. Modern accounting automation has successfully removed these hassles by eliminating the least effective financial tasks. They provide more time for accountants to work on analysis, accounting strategies, and other crucial business operations. Automated software systems are advanced in crunching numbers and tracking each real-time transaction of a business. They have erased the need to build complex ledger files and countless rows and columns of data entry. Computerized software has built-in formulae that help create and send reports with the click of a button. AI in the field of finance strives to streamline the overall business operation by automating accounting processes.
Impact of Automation on Accounting
Several business organizations have been continuously seeking efficient results through the fair use of accounting automation tools and services. According to one of the recent surveys, accounting automation statistics suggest that a more significant number of transactions are being processed and reported automatically by AI machines (source: https://www.researchgate.net/). Modern AI software work alongside humans to make financial operations more effective and productive. Several CFOs are concerned about the impact of automation on customers. Recent reports estimate that more than 50% of the back-end functions can be potentially automated; except roles related to knowledge-base management and shared services (source: www.ibanet.org). That is professionals, including data scientists, and cognitive tech geeks who can convert insights into meaningful communication. Several big businesses and CFOs are now focused on utilizing this opportunity by identifying individuals who are passionate to learn and expand their skill sets in the process of becoming real business-minded partners. Today’s business world needs the next generation of leaders capable of driving changes that can reshape how accounting operations are done.
What Is Accounting Automation Software?
The practical results of implementing accounting automation are beyond learning accounting or cloud accounting. Automated accounting is more potent than the traditional computerized system. Employing an automated system rids accountants from performing manual data entries or 3-way data matching. Business automation tools automate a significant part of small business accounts payable processes. It automates everything from recording each transaction to GST returns filing procedures. Accounting automation software might require humans to intervene only when there are certain exceptions or need a higher level of thinking.
What Are the Benefits of Using Automated Accounting Software?
Automation in finance resolves manual accounting hazards through smart software solutions that can instantly take care of the problem. If you are a small business wondering how accounting automation can benefit your enterprise, here’s a curated list that answers all your questions.
Strategic Management of Cash Flow
Mismanaging cash flow is one of the primary reasons why businesses go bankrupt. Cash flow crisis mostly arises due to inadequate accounting protocols that are unhealthy for a company. These protocols limit an enterprise from scaling and expanding its business. On the other hand, automation focuses on strategically managing cash flow that immediately provides a clear picture of business funds. Automation allows business owners to quickly estimate their profits; where is the business spending the most, and when can the company expect income? They no longer have to create manual reports to know their financial position. It provides visibility that contributes to making critical decisions when necessary.
Saving Time Through Automation
Automation is generally known to save time and manual effort across various industries. Likewise, in accounting, automation allows accountants to conveniently work on ledger entries, client information, and other financial details. They no longer need to spend countless hours trying to interpret data or match them. Automated accounting systems auto-update each record and relate the existing data in no time. Further, the systems also generate structured financial reports and install accurate timestamps on the related data. Soon, automated accounting software might replace the need for manual data configuration as well.
Advanced Cloud Access
Businesses using cloud programs can never settle for anything less. It is much easier to work when data access and document sharing are just one click away. Accountants and business owners can immediately process transactions and analyze each document anytime, anywhere. Cloud systems like Groflex make it easier to work as a team with shared data access. Cloud accounting software is comparatively much more secure to manage accounts payable; it is purpose-built for professionals with round-the-clock data access. They strive to provide the highest safety and enterprise-grade data security standards to keep business operations streamlined.
Flexible Features & System Functionality
Supreme quality accounting software provides features that are adaptable enough to sync with various business requirements. Implementing an accounting system that can adapt to the ever-changing business environment is crucial for enterprises to succeed amid challenging competitors. An integrated software system like Groflex allows standard formatting and provides customizable templates to formulate different business ledgers. These are some of the vibrant features and functionalities that make accounting software highly flexible for a wide range of businesses and industries.
Cloud Storage & Data Organization
Automated accounting platforms are capable of elevating businesses beyond their current capabilities. Data organization becomes easier with accurate data entry, processing, and storage. Business operations become significantly convenient when you know where to locate specific information precisely. Automated accounting software guarantees streamlined data. It automatically saves the details by immediately identifying the information entered in the database. Advanced computerized systems like Groflex offers secure cloud accounting that helps perform automatic, regular back-ups to prevent businesses from losing crucial data.
Enhances Data Security
On the dark side, the internet of things has made it difficult for businesses to survive. Although there are various advancements in today’s technology, the chances of being harmed by cyberattacks are equivalently high. Accounting automation is built with encryption technology that offers advanced security features to ensure maximum business data protection. Alongside protecting businesses from being hacked, automated platforms enable business owners to control the shared data access, allowing them to share what is necessary. The feature helps maintain the confidentiality of ledger information by preventing unauthorized employees from accessing the information.
Quick Data Recovery
Physical storage of paper files can be a daunting task; data storage can slowly turn into countless records. The thought of retrieving or reviewing physically stored data can haunt accountants. They have to search for each document, sometimes piled in different rooms to match them and interpret the data. Accounting automation is a boon to accountants; it is effortless to find records online. Instant location of files, entries, and records has never been this easy before. Automated systems are programmed to make ledgers and document reporting easier to categorize and store safely.
Comprehensive Data Analysis
Besides offering data security and organization, modern accounting platforms also supports quick presentation and distribution of financial data. Analyzed files can be accessed by any individual working in the enterprise; making the reconciliation of audits and records much more manageable. Furthermore, analyzing trends becomes easier with accurate means to check variances and predictability features offered by the software. It enables accountants to make data-driven, smart business decisions by providing access to readily available reports.
Tax Compliance & Deductions
The advent of the GST regime in India has made returns filing mandatory for registered businesses. The recent tax relaxations have led to confusion. Business owners are struggling with sales tax deductions during the tax seasons. Running errands without tracking receipts and expenses might lead to mistakes that can have severe consequences. The rise of automation in bookkeeping has eliminated the hassles of GST returns filing. Accounting platforms are now capable of updating records immediately as the transaction is processed. Accountants need not enter information as real-time accounting systems auto-update transaction data. They need to have an eye on these details to make sure the information is accurate. Automated GST accounting software like Groflex is capable of figuring out deductibles. It allows business owners to understand and estimate the tax preparation time immediately after processing the transaction.
Professional Development & Expert Learning
Any job role requiring manual, repetitive work can be replaced with the right tools and automation. In finance, accountants can easily replace their traditional, regular-basis work through automated accounting systems. It enables accountants to be more productive as they are free to focus on personal development and other efficient tasks. Despite all the advancements, accounting platforms do require human intervention. Accountants must ensure that these applications are working accordingly from time to time. Automation has been a turning point in the career of every accountant. It helps enrich their employment experience, improve their value within an organization, and share their knowledge. Implementing an ideal accounting platform can eliminate the most tedious and frustrating accounting tasks. It must allow business owners to better focus on other crucial business operations, such as managing bank accounts, developing business and accounting strategies, and better communication with the employees.
How to Select the Best Accounting Automation Software?
Automated accounting systems aren’t just for accounting. Business owners must know how to leverage accounting automation by integrating various business functions under a single platform. Instead, they should look up software programs offering integrated business intelligence tools that help manage other aspects of the business. For instance, Groflex integrated system allows businesses to leverage invoicing and quotation-maker features as a marketing tool. The software also integrates various essential tools like tally, purchase order management, and import functions under a single platform. Here’s a curated list of what to look for when you decide to purchase accounting software.
1. Does the software work well for your business requirements?
Before taking the call on buying software, make sure the accounting system is designed to make ends meet for your business. You can refer to online forums and detailed specifications to understand the functionalities of the software.
2. Does the software offer multiple access levels?
As discussed earlier, it is best to implement different data access levels for owners, managers, employees, and other authorities. You don’t want all your employees to have easy access to your account data.
3. Is the software capable of recording transactions and managing payroll?
Although any accounting platform is capable of recording transactions, not many systems offer payroll management. Most software offer payroll as an upgraded feature. Please check for the features before you purchase the software.
4. Does the software offer inventory tracking?
Only some software features include inventory tracking; others don’t. You do not want to link other tracking apps to your main accounting software. It will just multiply the amount of money you will have to spend on automating your accounting processes. Do thorough research about the software features, and what is useful for your business. Do not pay for unnecessary features.
5. Is it cloud-based software?
We have already discussed the detailed benefits of cloud systems in the article above. If the software is cloud-based, it will provide remote access. You will have the freedom to work from anywhere. It also offers lower support costs, an automatic backup facility, and hassle-free integration for payment and other applications.
6. Is the software extensible and scalable?
Small businesses have a greater scope of expansion with time. Thus, it is crucial to implement a scalable remote business accounting system, a software that can grow as the business does. Scalable software feature enables businesses to add new users as they expand. Wherein, the extensible feature allows users to purchase new add-on applications. Regardless of which accounting software you choose to purchase; ensure you always keep your essential files archived. Do not share access to your data concerning sales records, bank information, loan statements, and tax data. These crucial documents play a vital role in formulating tax returns and business audits.
Quick Tips for Successful Small Business Accounting
Using your accounting software to accomplish your regular business operations will help you get the best results. Here’s a list of quick tips, make this your daily accounting small business checklist, so you don’t miss out on anything.
- Record Each Transaction
- Check & Reconcile
- Review the Difference b/w Incoming & Outgoing Cashflow
- Collect Required Tax Data
- Cross-Check the Defined Ledgers
- Keep Your Ledger Entries Updated
- Get an Outside Perspective from Your Financial Advisor
- Create Regular Reports
- Keep a Trail of Paper Records (Receipts & Invoices)
- Do Not Intermix Your Personal Accounts & Business Accounts
- Stay GST Compliant – File Returns On-Time
- Watch Your Business Cash Flow
Combination of Automated Accounting & Smart Spending Software
By now, the reasons why your business finances require automation must be pretty clear. Accounting software saves time, avoids manual errors, and keeps business documents at your fingertips. There’s no excuse for not implementing accounting software. Alongside enjoying the benefits of implementing accounting software, have you considered leveraging automation to track your expenditures? While giving your finance team customized control over your finances, you can also deal with your expenses in the same manner. Combining accounting and expense tracking features makes your business operations more efficient, and accurate and help you confidently deal with your accounts at the end of every quarter. But the question remains; how to combine both functions? If you do not know where to start, consider implementing Groflex accounting software, a complete package of business intelligence tools—leverage automation in every way possible. The software offers features that can help beyond your accounting needs.
Will Automated Accounting Software Replace CPAs?
Automation replacing accountants in the near future is a mere myth. As we advance, businesses are still going to require accountants to ensure cost efficiency and effectiveness. Although automation simplifies the large role of accountants, it cannot entirely act like an accountant. Instead, it is the modernization of traditional accounting practices that allow accountants to make exceptional advancements in their profession. Automation in accounting has increased the scope for accountants. It has eliminated their need to spend enormous time doing tedious yet essential accounting tasks; enabling them to limit their errors and provide accurate results. Accountants can now work on their vital roles as financial officers. They can further become finance consultants who create strategies, and budgets and advice the CEO’s to help increase their organization’s overall profits. The emergence of advanced technology does not mean businesses can do away with employing humans. They still need bookkeepers who can understand the fundamentals of accounting, analyzing and explaining how finance works for an enterprise. Businesses do require individuals who are capable of doing more than just interpreting financial data. Accounting software has transformed CPAs into custodians of financial information. Most people believe that AI (Artificial Intelligence) and machine learning will take over employees’ roles. However, it is far from the truth. In accounting, businesses will always require an expert to keep an eye on software functionalities. All-in-all, AI has increased CPA’s efficiency by enabling them to deal with numbers much faster and in more accurate ways. The process of strategic decision-making is now easier than ever for CPAs.
Business Automation Guide – Cut Short!
Knowing the basics of accounting automation, here’s a list of new strategies working great for businesses in 2021.
- Automate transaction accounting tasks (bookkeeping, payroll, purchase order, etc.)
- Automate your business cash flow, tax calculation, planning, and tax research.
- Automate accounts and records under GST.
- Leverage AI right away and save yourself loads of time.
- Auto-verify data to keep up with the quality.
- Become an automated and fully outsourced accounting professional for your clients (forecasting, financial modeling, business planning, and more).
- Pick financial service providers who offer the most accounting automation features and capabilities.
Conclusion
Technology has enabled business owners to manage their enterprises more efficiently. As a result of automation, the business now has an easy means to perform improved data analysis and reporting. Ideal accounting platforms enable business owners to see the overall business performance. If your company still adheres to manual accounting processes, you are running last in the race. Automation enables you to keep your fingertips on the pulse of your business, helping you to meet the ever-changing demands in the marketplace. We hope this guide to accounting automation – 2021 was helpful for your business. Now we leave it all over to you.
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