Latest technologies, such as Artificial Intelligence (AI), Machine Learning (ML), Cloud Computing, and Robotic Process Automation (RPA), which form the core of Accounting Automation, are increasingly cutting turnaround time and improving the safety and accuracy of accounting processes. Understandably, their growing impact and importance require careful understanding to ensure a seamless implementation.
That is why we have come up with these unique use cases to highlight the importance of accounting automation.
Use Cases in Accounting Automation
1. Data Entry and Reconciliation
Errors in accounting can be a very costly affair. It can not only result in millions of dollars in fines but can also damage the reputation of the organization. In addition, it can lead other departments of the organization into poor decisions, hampering liquidity and requiring resource-demanding correction work.
However, by deploying accounting automation, data entry and financial reconciliation can be performed by bots with the click of a button, as per the compliance, business, and audit requirements, with minimal human interference. If an error was still made, the algorithm of the bot can learn from it and prevent its recurrence. In other words, the bot’s efficacy will only improve with time.
2. Expenses and Reimbursements
Expense filing has always been a tedious process. It required an expense report to either be handwritten or printed out on an excel spreadsheet with stapled receipts that had to be handed over to the Accounting team. The Accounting team, in turn, had to manually enter the expense details into their system to initiate reimbursements.
However, with the automation of accounting, there is no need to fill out and submit receipts at all. This is because the accounting software can now be integrated with the payment platform to capture and store all transactional data and release accurate funds within a matter of minutes.
3. Payroll Processing
Ensuring that all employees get paid their respective compensation on time requires a large amount of manpower and time. Getting it wrong can impact employee morale and may even lead to cash flow and legal issues.
Accounting automation enables organizations to manage every process within payroll management on autopilot. This includes automatic and error-free tax processing and filing.
4. Contractual Fulfilment
Organizations have to ensure that their suppliers are adhering to the agreed-upon terms at all times. Miscommunications can lead to massive legal complications that tie down critical operations and inventory for months.
However, by deploying accounting automation, bots can leverage Natural Language Processing to automatically extract information such as discounts, rebates, deadlines, and penalty clauses, etc. from the contract, reports, and government mandates to identify gaps and discrepancies.
5. Accounts Payables Processing
Ensuring that the right amount is paid to the right account and invoices is critical to a full-proof Accounts Payables system. Mistakes here can not only lead to cash flow issues but also hamper relations with the suppliers. However, when managing hundreds of accounts and invoices from multiple countries and tax jurisdictions, with different processing schedules, languages, and in multiple formats such as cash, electronic, and cheque, errors in Accounts Payables are too common.
Bots that leverage accounting automation can identify the invoices, sort them as per the organization’s accounting policies, cross-check it with the existing contracts, route them for approval, release payment, and reconcile it with minimal human interference. Additionally, the bot can also assess the invoices for anomalies such as double payments, unauthorized purchases, and fraud.
Accounting automation enables greater productivity, enhanced efficiency, and accuracy. In the future, under the current pace of digital evolution. We anticipate a complete overhaul of the accounting world with CPAs focusing on high-impact tasks, such as financial advisory and estate planning, while automation takes over simple, repeatable work.
In fact, according to Rob Clymo, a renowned tech journalist, 81% of accountants believe they can save up to 2 hours a day (or 10 hours per week) by automating simple tasks. This would translate to savings amounting to hundreds of thousands of dollars annually.
Automation in accounting is here to simplify and streamline the process, getting rid of the labor-intensive and time-consuming aspects of the job. This leaves enormous scope for an accountant’s expertise and skill in developing business strategy, offering financial planning, and more. Growing professionally today requires being aware of and proficient in various accounting automation tools.
At Sentient Solutions, we help accountants and CPA firms improve scale and reduce operating costs with process automation, AI, and scalable services.
Reach out to us today!