Accounting leaders who are ready to introduce automation into their business operations may be hesitant because the idea of overhauling their normal processes can be overwhelming.
We’ve taken on some of that burden with this automation guide that breaks down automating your accounting process into six easy steps.This guide is backed by his Gartner research [1] Expert advice from Michel Cuvello [2]is an Australia-based treasurer who helps small and medium-sized businesses (SMBs) grow their business.
Automation is when tasks such as posting depreciation journal entries and sending monthly performance reports occur without user involvement. These tasks are programmed so they continue even when you’re asleep.
is as easy as using accounting software Or as complicated as leveraging automated tools like: robotic process automation, business process management, Low-code/no-code platformand AI softwarestreamlines processes involving multiple software systems or people.
Accounting involves many tasks, but accuracy and accountability are paramount in all of them. This creates a cycle of highly repetitive chores with clear steps and defined rules. It refers to programming these daily repeatable tasks to make your workflow more efficient.Study finds 89% of accounting tasks are highly automatable [3].
Automation not only saves time and money by eliminating repetitive tasks, but it also integrates disparate tools like invoicing and accounting software to facilitate data movement and what really matters to your business. Increase fact control and visibility. Learn by example.
step 1.Document the “why” and “how” behind accounting practices
Start by thoroughly studying your current workflow. This is very important for improving the process.
Kvello said a common challenge companies face with accounting is outdated processes that have been around for so long that no one questions their necessity or relevance anymore. pointing out. The situation is even worse when the workflow is undocumented and relies on verbal instructions from one person.
Step #2: Identify Automation Opportunities
Now that you understand your current accounting workflow, select the processes that are prime candidates for automation. Look for tasks that take a lot of time and require less human effort. Some clues to find them:
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Repetitive tasks: Perform these tasks repeatedly, such as entering financial data into a spreadsheet or sending an invoice. If you think, “I’ve done this a thousand times before,” there’s a good chance it can be automated.
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Time consuming tasks: If a task is rule-based and takes a long time to complete, it may be an ideal candidate for automation. For example, reconciling financial records and bank statements to identify discrepancies or identifying the monthly close process leading up to financial reporting.
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Tasks with high error rate: Accountants fear making mistakes and often double or triple check their work. Hand off tasks with high error rates to the computer for consistent and accurate results. This may include calculating taxes and payroll deductions.
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Tasks that require multiple approvals: Automation can be a game changer when a task requires buy-in from multiple people before it can move forward. For example, a purchase order that requires approval from various departments, or an expense report that requires multiple signatures. Additionally, the financial brain will be able to focus more on analytics than on administrative tasks.
According to Software Advice research, payroll is typically the first accounting function companies automate*.
Step #3: Choose the Right Automation Tool
Different automation technologies serve different needs, often in combination. [1]. Your goal is to identify the best fit for your use case.
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RPA: RPA platform It’s ideal for automating repetitive tasks with well-defined steps that require little to no decision-making, such as entering invoice details into an accounting system. RPA does not change processes, it mechanizes them for greater accuracy and speed.Did you know that 1/3 of accounting jobs are suitable for RPA? [3]?
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Scripting: Scripting has been around for decades and is a versatile method of automation that requires programming languages such as Python and JavaScript. This is great if you have a programmer on your team and need seamless integration between two of his widely used systems, such as accounting and payroll, while maintaining flexibility.
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Built-in workflow: These are the features available in the software for creating custom process flows. This type of automation is done in software, which makes it more reliable. For example, using the built-in workflow, Invoicing solution Automatically send reminders for overdue payments.
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Low-Code Application Platform (LCAP): low code Or the platform is perfect when you need to automate new processes that require a “new” user-friendly and attractive user interface (UI). A simple example is creating a custom dashboard for financial reporting that inputs data from various places.
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Integrated platform: Integration-Platform-as-a-Service (IPaaS) Tools Simplify integration by linking multiple systems through API abstractions, flow control logic, and data mapping tools. They are useful for automating processes that require little or no human input between applications. For example, integrate data from CRM software with accounting software to enter sales transactions.
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Business Process Management (BPM): BPM solutions digitize processes across your business. Leverage IT to automate end-to-end processes involving multiple systems and people.For example, automation Accounts Payable (AP) Process, from PO generation to payment to addition to the books. The demand for AP automation calls for robust solutions in this area, but BPM solutions can also be used to integrate such processes.
Kvello emphasizes that choosing an automation tool often requires adjusting current processes to take full advantage of the technology.
Step #4: Evaluate Team Skills and Capabilities
Now that you know what and how to automate, ask yourself what might potentially be automated given your team’s skills, platform capabilities, and intended outcomes. [1]. Kvello also advises considering post-deployment system management. “Assessment: Who are the go-to experts when things go wrong? How will automation systems evolve with the business?”
The skill level required depends on the automation software you use. Some tools are designed for “citizen developers,” business users with basic technical knowledge and minimal or no coding experience, but with good process know-how.
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Citizen developer: If your team is made up of citizen developers, your tooling options are narrowed down to: RPA, LCAP, embedded workflows. An integration platform may be manageable by even a slightly more advanced citizen developer.
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Experienced developer: If you are an intermediate to advanced developer or coder, you can consider automation tools that offer more customization and features.
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External Expertise: If your team lacks the necessary skills, consider outsourcing or hiring experienced professionals who specialize in automating accounting processes. However, nevertheless, consider training or hiring people in-house to maintain the system after the project is complete.
Step #5: Evaluate Costs and ROI
Many companies (39%) struggle to see value in automation due to a lack of automation culture and clinging to old methods*. Address this issue by predicting the potential return on investment (ROI) from automation. Kvello recommends a simple formula for quantifying the value of automation. It’s about saving or gaining value divided by the cost of tools and people used.
While costs are often obvious, she suggests calculating your savings by considering:
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Staff reduction: Automating repetitive tasks frees staff to focus on more value-added and complex tasks, saving potential hiring costs for routine data entry tasks.
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Reduced errors: Automation minimizes manual accounting errors that require detailed scrutiny by accountants. Save man-hours and effort for rework.
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Reduce legal costs: Automated systems accurately handle tasks such as payroll, reducing legal costs that can result from inaccuracies.
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Improving cash flow: Automation helps you manage your accounts receivable and payable, keeping your cash flow and supplier relationships healthy.
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Focus on value added activities. By automating routine tasks, your team can focus on growth-oriented activities.
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Time savings for readers: For small business owners juggling multiple roles, accounting automation frees up valuable time.
Remember, the goal is not just to save costs, but to improve efficiency, accuracy and strategic focus.
Step #6: Appoint a Project Manager
Appoint a project manager to keep your automation project from bogging down. This person creates roadmaps, manages projects, ensures smooth execution, and acts as the primary contact and coordinator for tasks, resources, and schedules.
Ideally, you should have thorough knowledge of accounting workflows along with project management expertise. You can start by hiring from within your company, especially from your accounting and IT teams. If necessary, consider external consultants who specialize in accounting automation.
Automation is not about replacing accountants. This reduces your workload, makes your workflow more efficient, and allows you to focus on what you do best: give strategic advice, build relationships, and help grow your business. will be
So, are you ready to embark on your own automation journey? It may seem daunting at first, but with careful planning, you can reap the benefits. Let’s quickly summarize what we’ve learned.
For more guidance on which processes to automate and which tools to choose, schedule a call again click here Chat with a Software Advisor. Or see , , and other software buyer’s guides. automation technology.
Note: Specific software products referenced in this article are examples to illustrate functionality in context and are not intended as endorsements or endorsements.
