An automated accounting system is a digital system that allows the collection, storing and processing of financial data that are used by decision-makers in businesses.
To break down this definition in practical terms, an automated accounting system exists to automate the processes that take up a lot of time and are repetitive, for example invoice management in the accounts payable workflow.
Automated Accounting is AI-driven
And this allows processing documents such as:
- Source documentation (invoices, receipts, credit card slips)
- Bank Statements
All these labor-intensive tasks will soon become a thing of a past.
Some have referred to automated accounting as Smart Accounting or AI Accounting. No matter how you say it automated accounting is exciting and is here to make your life easier.
It is predicted by 2020 all tasks related to tax preparation, payroll, audits, and banking will be fully automated.
By processing these source documents, it will be quicker and easier than ever before to produce financials such:
- Trial Balance
- Income Statement
- Profit & Loss Statement
How can this help me daily you ask?
I will show you a very familiar daily scenario below.
The image above shows the scenario of the timely task of getting hold of a client to query regarding a source document while papers are being piled on the desk.
This scenario can be avoided easily by shifting from recording source documentation manually to an automated accounting system.
The need for paper will diminish when you take on an automated accounting system. In addition to this, you will be able to leave notes for your client on a specific document allowing for quick communication between you and your client.
There are different stages of the automated accounting process which must be followed to harness the value of such a system.
Here is a graphical example of the manual accounting process that exists today:
The processing time can be cut as much as 50% as you’re not doing the menial tasks that take up so much of your valuable time.
The automated accounting process has been cut down into 3 steps
The future of accounting is going to be automated and the question is:
Are you onboard?
According to Accounting Today, the cloud accounting space will be worth $11.8 billion by 2026. It is certain that accounted automating will become a norm of the future.
Technology is moving at a rapid pace and it is here to make our lives easier.
Some of the recent innovations in the automated accounting space include:
- Language agnostic – the necessary data can be extracted withoutunderstanding the language.
- With the advancement of machine learning, the system will watch and learn from you to make tasks quicker.
- Cloud storage has allowed for documents to be seamlessly stored and linked to a source document.
- AI (artificial intelligence) technology have been developed to allow you to “drop and drag” numbers from your source documentation in seconds.
- Chat functionality allows for “messenger” like options where youcan chat on top of a document for easy reference in the future.
Why does this help me and why should I care you ask?
5 major benefits of adopting an automated accounting system:
- There is no longer a need to spend thousands of dollars to pay for offsite documentation to make sure is secure.
- It will allow you to stand out from your competitors as you will be able to deliver a faster turnaround time for audits and bookkeeping services.
- Accounting automation will give you a much deeper real-time insight into your clients’ books than ever before.
- There will be a cost-saving on office stationery and our desks will be less cluttered so we can concentrate on the work that matters.
- It is now easier than ever to get clients from any country in the world.
There is no question that accounting automation is driving the future of the accounting industry.
With this technology taking center stage there is a worry that accounting automation will reduce the need for jobs in the industry.
The simple truth is that automated accounting and the AI that drives this technology will transform the industry where accountants will perform the tasks that AI technology just cannot do.
For example the consulting scenario and sitting down with your client where the following tasks place:
- understanding the type of business,
- where the business is in its growth phase,
- how you can save the business money in taxes
- doing a physical audit for product-based businesses
We have given you a sneak peek into the article titled “Will accounting become automated” which will be released next week.
Machines do not need to be seen as the enemy. They should be seen as a friend who is there to analyze the style of your work and to make it easier for you to get your tasks done.
Just like a friend gets to know you over time so does a machine. A machine will learn your behavior and therefore help you run your business more effectively.
Change is hard and no human likes change.
The hard truth is there are only 3 constants in life:
Change, Taxes, and Stress
Will you embrace the change and be part of the exciting automated accounting revolution?