A Guide to Streamline Financial Tasks Using Bookkeeping Automation for Startups
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Businesses are increasingly adopting digital strategies to stay competitive. Implementing digital bookkeeping services across all departments has simplified financial processes and boosted output. Moreover, proper accounting and bookkeeping practices are fundamental to the business’s success. In addition, 83% of accountants believe that adopting automated technologies is necessary to stay updated with the evolving industry.
Startups have heard the term “bookkeeping automation” for some time, but does it help? What is it? Payroll, expense management, and tax compliance are just a few headaches affecting startups. Automated bookkeeping software is an easy method for raising productivity and decreasing inefficiency. But for new businesses, the question is, “Which processes should they streamline?”
This article explores the importance of bookkeeping automation and how it helps manage financial tasks.
Bookkeeping Automation – A Comprehensive Overview
The practice of keeping ledgers by hand is now far behind the times. Technological advancements have extensively promoted new, more effective methods of managing finance. One such cutting-edge alternative in the finance industry is bookkeeping. It is the practice of keeping track of money earned and spent by a business as an aspect of the accounting and finance procedure. The inventory of accounts includes how an organisation records financial transactions. Keeping track of every account activity will optimise and simplify overall financial management.
An automated bookkeeping system uses software to speed up and optimise the many activities involved in keeping financial records. Businesses gain a lot from the tools that automation provides. Implementing accurate bookkeeping automation is achieved through features like designing and executing workflows. Thus, companies that want to maximise efficiency should implement accounting automation.
How Does Bookkeeping Automation Help Businesses?
Any company could benefit from using bookkeeping automation technology. Besides this, when a startup chooses AI-powered software.
- It works to produce accurate reports.
- They can help reduce mistakes made by humans.
- The result is more output. The majority of accountants, 58%, believe that automation increases productivity.
- They may invest their efforts in expanding their company and reaching new customers.
Numerous free software applications for automated bookkeeping services may be downloaded and used. However, tailored accounting software that meets specific requirements would be ideal. Therefore, accountants have more time for strategic planning and less time for routine administrative work.
5 Tasks Bookkeeping Automation Revolutionise
Knowing which of the many bookkeeping activities can be simplified with the help of automated software is extremely important. Here are a few ways in which bookkeeping automation software might help new businesses:
Bank and Credit Card Information Transfer
The workflow automation software should accept many forms of payment, including credit cards and debit cards. This will help the company get an understanding of its current cash flow. Consistency in the company’s financial dealings is achieved through the use of bookkeeping automation software.
With this setup, information from bank and credit card accounts can be automatically imported into the books. With this function, an accountant’s financial tracking efforts can be organised, allowing for more thorough analysis and reporting.
Categorising Different Transactions
Organising and classifying financial dealings gives transparency and simplicity. Bookkeeping automation software can perform such a task using Machine Learning (ML) techniques. An expensive manual Workflow is unnecessary when an automated bookkeeping platform can be used to classify and gather transactions. When organisations begin to differentiate between low- and high-volume payment transactions, this becomes an important consideration. Automated software may perform the procedure instantly, minimising the need for human labour.
Handling Invoices for Payment
When invoices are received as attachments in an email, the bookkeeper usually has to search for the correct entry in the accounting software. After receiving management approval, the audit invoice is stored. It all appears to take a very long time. When accounts payable are computerised, the program can tell whether or not an attached file is an invoice. The system will automatically correlate this information with the appropriate category of expenses and any additional documentation.
It will be unnecessary to keep track of paper receipts if bookkeeping automation software is used. The receipts only need to be scanned and uploaded by the staff members into the application. The receipt will be uploaded to the cloud by the system automatically. These receipts are scanned and transferred to the accounting software by the program, which is designed to extract necessary data from them.
Payroll calculations for an organisation might be difficult because of the laws and related fines. It is preferable to choose solutions that offer payroll automation features in order to eliminate any errors. Payroll capabilities are integrated into some technologies, while other solutions are specifically designed to do payroll tasks. In addition to tracking work hours, this kind of automation may estimate salaries for staff members.
Reasons To Consider Bookkeeping Automation Services
The following are the significant reasons why accounting firms implement bookkeeping automation in their financial tasks:
1) Saves Time
Time savings are the biggest perk of implementing a bookkeeping automation system for startups. According to studies, 25% of business owners put in more than 60 hours a week. Time is money in the corporate world. It wastes time and resources for firms to complete mundane tasks that automation might handle.
Bookkeeping is crucial to the success of any company, yet it may be extremely time- and labour-efficient to outsource this task. If a startup makes good use of automation tools, it can achieve the same goals quickly and at a lower cost than before.
2) Easy Tax Returns
Due to the extra time and effort required, tax season can be a particularly stressful time for business owners. However, automating bookkeeping makes tax time effortless.
Accounting not only facilitates tax filing but also guarantees that all relevant data is accurate. In this approach, businesses will never again need to submit tax forms with incomplete information.
3) Improves Productivity
Subsequently, implementing a bookkeeping automation system can enhance productivity at work. As previously stated, entrepreneurs are faced with numerous responsibilities. To ensure the success of their company, they must choose which jobs are most crucial. An automated system allows businesses to save time on financial activities, freeing them more time for other, more important company areas.
Companies might concentrate on sales or other aspects of business expansion. Moreover, bookkeepers will be more productive when a business outsources accounting to an automated system.
4) Improved Accuracy
Attempting to check the accounts in a hurry might lead to blunders for a busy business owner. Mistakes in financial data input or bookkeeping formulas can cause major complications, especially when paying taxes or becoming audit-ready. Bookkeeping automation, however, can improve accuracy and produce more trustworthy data.
Machines are far less likely to make calculating errors than people are. Nonetheless, businesses must still review the data to ensure that their automated system processes it accurately. Accounting and bookkeeping tasks will be completed more quickly and with fewer errors.
5) Cloud Access to Data
Depending on the platform, bookkeeping automation also offers cloud access to financial data, frequently in real-time. This is another great benefit. Some companies still adhere to the outdated practice of keeping financial and corporate data on floppy disks, USB drives, or filing systems.
Businesses frequently keep this information elsewhere, further complicating matters and making it much harder to get crucial information. Employing cloud-based accounting software can help businesses save storage space, reduce the cluttering of paper files, and access data much more conveniently.
6) Faster Data Retrieval
Automatic accounting systems make it possible for businesses to keep data in the cloud, making it much simpler to retrieve such data when needed. Companies no longer have to search through hundreds of files to find the financial information they need quickly, as they can access their data almost anywhere.
7) Protect File Storage
Finally, the safe storage of sensitive financial data is greatly facilitated by accounting automation. Many bookkeeping automation services use technologies to encrypt your data and guard against security breaches. This also facilitates data management because it allows you to organise your files into various computer folders for quick access.
Digital Bookkeeping – A Full-Scale Solution
RecordMe’s digital bookkeeping service eliminates error-prone and inefficient manual processes, providing a complete solution for both companies and individuals. Bookkeeping automation systems enable effective and precise financial administration, giving them an edge over competitors.
RecordMe helps businesses stay competitive by enhancing financial management efficiency, accuracy, and security. It handles business cash flow and data-entry issues. With a good cash flow and strategy, no one can stop a business from growing.
Still unsure if bookkeeping automation is right for you? Contact us; our expert bookkeepers will advise you!