Future of Accounting Lies in Automated Bookkeeping Services

What is Automation?

In simple language, automation means the invention of technology and its application in a way that it performs the tasks automatically, eliminating or minimizing human intervention.

AI, RPA, IoT, etc. are some of the technovations that are driving all industries, bringing about major disruptions, preparing them for the future.

A Robert Half Survey states, “79% of managers in the U.S. are either currently using automation or expect to do so within the next three to five years.”

Sharing his views on automation in businesses, Jonathan Wyatt, managing director and global head, Protiviti Digital says, “By using automation, business leaders can tackle their long to-do lists and start building their business of the future.”

In the steps being taken towards automation, Cloud services are in great demand. There was an initial hesitancy on the part of the firms in adapting it, as they were concerned about privacy issues, but gradually those have been overcome. Recognizing the incomparable benefits in adopting cloud accounting software business leaders have started successfully partnering with it.

Robert Half Survey throws light on the advantageous applicability of Cloud, “94% of managers are currently using the cloud or expect to do so within the next three to five years.”

Daniel Burrus, the technology futurist, disruptive innovation expert, and the best-selling author states, “We’re at the base of a mountain of the revolution caused by cloud services and virtualization.”

When we correlate the term automation with accounting then it is amazing to see the wonders that this partnership has done. By taking over key processes like billing, data entry, etc. it has propelled the industry on a faster and smoother track.

Why is Automation Needed in Accounting?

The most distinctive attribute of humans is that they evolve, invent and adapt from time to time. Over the years new, innovative technologies have made a great difference in the ways businesses operate.

Accountancy and bookkeeping are an integral part of every business, be it big, medium or small.

Here are a few significant factors that highlight the problem areas of conventional accounting and therefore, lead to the necessity of automation.

Factor #1: Manual Accounting Is Challenging

Traditional methods of bookkeeping have always been tedious, time-consuming and monotonous work.

Performed by humans, the biggest hurdle in maintaining accounts accurately is errors caused by people who work on them. This is one of the main reasons that has led to the industry’s look towards automation.

Factor #2: Traditional Bookkeeping Is Time Consuming

The main component of bookkeeping such as data entry is in all practicality a cumbersome task for any individual, eating up valuable man-hours. It is a sheer waste of time and energy for any professional person and leaves no time for other important tasks.

Factor #3: Storing Hard Copies Is a Mammoth Task

Keeping a record of all transactions, expenditure, and income, etc. in hard copies means hiring more manpower as one needs to file them systematically. Additionally, one needs ample space to store them.

Factor #4: Loss of Hard Copies Is Disastrous

As there is no back up of the data, the loss of hard copies creates havoc as the company is stuck without any data. In case of any eventuality like fire, flood, etc. all is lost, with recovery option being zero.

Factor #5: An Expensive System

Especially for small businesses and startups, it is quite difficult to maintain conventional accounting, as it requires hiring professionals who are qualified to perform these specific tasks.

Factor #6: Limited Access

These accounts cannot be easily accessed by anyone who is not acquainted with the system.

Factor #7: Customer Support is Slow

Amid so much of manual processing, it is very obvious that customer support takes a backseat and is very slow to come.

Factor #8: Competitors have automated

Reluctant to change or fear of the unknown has stopped many firms from undergoing automation. The flip side of this stagnation is that they are losing out to their competitors, who obviously have embraced automation and moved on.

Thus, there is no denying the fact that by ignoring business accounting software, the firms are digging their own graves.

“These companies may not be able to hear the death knells today but they will almost surely be doomed in the near future, if they do not adopt automation today.”

What Tasks need to be Automated?

If we look at what all can be automated in accounting then we will realize that not everything can be automated, at least not at the moment.

But there are a number of fields in which automated cloud accounting software can be adopted and bring up outstanding results.

• Tasks that require manual calculations.
• Tasks that are data intensive.
• Processes that have an electronic start and endpoints.
• Functions that need an electronic trigger.
• Work which faces a high error rate.
• Processes that are repetitive in nature.

Automation + Accounting = Partnership of Benefits

Artificial Intelligence has come of age and software developed with its help is doing wonders in all fields, and certainly, accounting cannot be left untouched.

There is no doubt that traditionally the work of an accountant is not only difficult but also tedious. But the advent of AI and Cloud accounting software has simplified the task of an accountant to the core, by adopting automated bookkeeping software. It has revolutionized accounting in such a way that it has halved the work of accountants.

Let’s examine how leveraging business accounting software has benefited the accounting firms.

Benefit #1: Radically reduced the number of errors

Implementation of intelligent automation being done almost perfectly by cloud accounting software has reduced, if not eliminated the chances of error.

Benefit #2: Freeing up time of accounting personnel

Most of the time-consuming work done by an accountant or rather looked after by them is repetitive, like journal entries, routine calculations, preparing financial statements, etc. By introducing RPA in these functions, a lot of time, energy and manpower are saved. The accountants now have a more productive role to play as they can concentrate on more important matters.

Benefit #3: Reduced load and stress

All those involved in traditional bookkeeping know how stressful it can be. One small error leads to hours spent spotting and rectifying the error in the data. Business accounting software has smoothened these processes completely, resulting in heightened work efficiency.

Benefit #4: Saved valuable man-hours

The firms saved a lot of man-hours as the workload of employees is reduced. These employees devote their time to more important work and thus, add value to the firm.

Benefit #5: Speedy accomplishment of work

What took hours for an individual to do, is now being performed in minutes after adopting business accounting software.

Benefit #6. Cost-effective

Adopting business accounting software proved to be economical too as the firm does not need to hire too many hands, even when their business is expanding.

Benefit #7: Helped to beat the competition

By taking a futuristic step, the firms which have adopted automation are always ahead of their competitors as they provide better services.

Benefit #8. No worries of data back up

Cloud-based accounting software ensures that all records are stored in real-time and therefore, there is no need for physically stacking them or fear of them getting misplaced or damaged.

Benefit #9: Easy accessibility

One of the biggest advantages of having embraced cloud computing is that it can be accessed by anyone who is authorized and from anywhere.

Benefit #10: Facilitates collaboration

With automation, it is simple to connect and collaborate with other departments, saving time for everyone.  

Benefit #11: Environment-friendly and progressive

Cloud-based accounting automation helped in making firms go paperless, giving the message of modernization to all stakeholders.

“Digital transformation provides a host of benefits to a firm who has carefully planned its implementation and impeccably executed it.”

Is Cloud Computing Safe & Secure?

Now for those who have not yet adopted automation, this is an important question.

Let’s be true and realistic! Like every other tool, this also has its concerns, especially because cloud computing is supposed to be susceptible to hackers.

But don’t jump to conclusion that your sensitive data is insecure or can be stolen.

Companies that provide cloud computing services are aware of such issues and therefore, they use state-of-the-art measures like multi-factor authentication and encryption, etc. to protect client’s data.

When compared to traditional desktop accounting software, it is much more advanced and secure.

“Looking at the pros and cons of adopting automated cloud accounting software, it is easy to see that the pros outnumber the cons substantially.”

What’s The Way Forward?

Cloud computing, RPA, AI all have changed the way in which accounting and bookkeeping were done. As smarter and modern technologies influence the industry, it is but natural not only to be aware but also adopt them.

According to cloud accounting statistics it is highlighted that small businesses are the ones that need automation the most. At the same time, the statistics also establish that those who adopted cloud computing have benefitted the most.

• 58 percent of large companies use cloud accounting (Accounting Today)
• Cloud computing reduces labor costs by 50 percent (Forbes)
• By 2020, 78 percent of small businesses will rely solely on cloud technology (Accountancy Age)

When it comes to Artificial intelligence, the statistics prove that they have covered great grounds where finance and accounting firms are concerned.

RPA has reduced audit and contractual processing time from several months to a few weeks (Forbes).

The Way Forward!

Going through all the above points, it is quite clear that it does not matter whether you are a small firm or an upcoming startup or even an established company, you need to embrace the sweeping changes brought by automation.

It is never too late or too early to change!

As technovations are changing the landscape of the finance and accounting industry, you need to make a smart decision quickly.

As more and more financial services firms are investing in technology that can streamline their processes, produce a quicker output to finally speed-up their businesses, you would not want to be left behind.

Once you embark on the journey of automation, take care of a few crucial things that are important to follow if you want to take full advantage of the best accounting software. Some of them are:

• Research well and select a software that will cater to your needs not only today but in the future too—think long term.
• Make sure that your accounts team is well versed in the unique features of the software. Proper training is mandatory to achieve the optimum.
• Hire professionals who are adept not only in handling data but also are aware of regulations and privacy policies.

With everything in place, you will see that you will never face a cash flow crisis as you will have real-time updates on the situation. It will also help enhance your relationship with customers as systems will become more effective. With more time in hand, your accounting professionals can add value to your company through their advice and insight into crucial matters.

Not changing and upgrading yourself will lead to being left out in the cold.

“Embrace the disruptive technology in accounting and be at par with your competitors otherwise you will be forgotten.”