Importance of Automated Accounting Processes

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Importance of Automated Accounting Processes

CFO Tech Outlook | Thursday, November 25, 2021

Accounting, with its manual processes and repeated duties, is ideal for automating an organization.

FREMONT, CA: Automation can help an organization minimize up to 40 percent of the losses caused by accounting errors. However, you must understand which accounting procedures can be automated efficiently and which cannot. While each organization is unique, several accounting activities lend themselves to automation in particular.

End-of-month reporting

This is the procedure and duties that accounting teams must do to conclude a month's business operations worth. This procedure entails balancing the general ledger, reconciling cash accounts, amending allowance accounts, and determining the month's income tax provisions. This procedure occurs periodic and routine, so it is critical to have measures in place to ensure that it is error-free.

One standard method for automating this procedure is to obtain reports from several sources and then populate an Excel spreadsheet with the data.

Processing of invoices

Every firm, regardless of size, must process invoices. Numerous organizations have accounts payable departments that are responsible for processing payments on the company's behalf. This results in a high volume of incoming bills, making it vital to have a system to receive, verify, validate, and pay invoices within the specified time limit. Failure to process an invoice on time may result in the loss of a significant supplier or the payment of interest on accounts payable, depending on suppliers' conditions.

Because hundreds, if not thousands, of invoices, are received each month, errors might occur if the process is performed manually. This would entail receiving and scanning bills, analyzing digital copies, extracting pertinent data, physically entering it, and double-checking for errors. This would need numerous labor hours if done manually.

This is why a large number of businesses choose to automate this procedure. Several methods for automating invoice processing include the following:

       •  Using invoice processing automation software to extract invoice data and populate management software.

       •  Utilizing cognitive capture software for invoices to capture electronic, digital equivalents of paper and email invoices.

       •  Extracting pertinent data from emails, logging into vendor applications, retrieving invoice information, and entering data into invoice processing software using                 robotic process automation (RPA).

Payroll administration

Payroll management is also a difficult task for an accounting team, and it can occur as frequently as once a week. It entails responsibilities including scheduling payments with a bank, calculating the appropriate amounts to pay out, and deducting and withholding as required by contract. Additionally, companies must adhere to a variety of state and federal requirements governing payroll management and reporting.

All of these processes are hard to complete manually, and errors are often. RPA is one of the most efficient methods of automating payroll management. The majority of payroll management chores, such as calculating bonuses and holiday pay, adhering to tax laws, and computing the required deductions for each employee, can be performed by robots.

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