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However hard your finance team strives to be efficient, you’ll find yourself bogged down in frustrating, time-consuming manual processes that will only multiply as you grow. Automated accounting cuts through that stack of routine work, helping you close the books earlier and get meaningful management information to decision makers while it's still timely.
What is automated accounting?
Automated accounting takes the most repetitive or complex parts of the team’s daily work and employs technology to reduce the burden.
A host of transactional work – from invoicing to bank reconciliation – can be substantially automated, eliminating hours of routine tasks every week without putting accuracy at risk. In fact, accuracy is often improved. Technology’s ability to read figures, follow processes and repeat tasks as many times as required becomes your friend – and the more the workload grows, the more the efficiencies compound. iplicit users have reported saving 1-2 days a month on reporting, with many saving days at month-end close – and in some cases significantly more.
What automated accounting doesn’t do is replace human judgement and good sense. That’s what you’re best at.
What tasks can be automated in accounting?
Automation can help with a large number of finance tasks.
Bank reconciliation
Software matches transactions in the bank statements with those in your cashbook. Humans review and approve but the manual hunting and matching is eliminated.
Accounts payable
The system matches incoming invoices with supplier records, ready for review. It uses machine learning to improve its suggestions each time.
Automated approval workflows
Automation simplifies approvals. Incoming invoices are scanned and stored ready for authorisation. Expense claimants scan receipts to populate the key fields of their claims.
Recurring billing and revenue schedules
There’s no need for manual reminders to ensure customers are billed correctly. Automation allows you to set the billing schedule once and leave it to the system.
Accruals, prepayments and deferred revenue
Automation can handle the complex task of recognising revenue and expenditure correctly, following your instructions.
Credit control
Software sends the appropriate payment reminders on schedule, from gentle chase to legal warning. It can also flag any overdue invoices, helping with cash flow.
Intercompany accounting
Automation handles intercompany transactions, making the corresponding adjustments in each entity’s ledger, and presents a consolidated picture.
Production of reports and dashboards
Automated accounting can present your data, in customisable reports and dashboards, in real time.
What are the benefits of automated accounting for finance teams?
Automated accounting can transform the life of a finance team, allowing people to contribute their best by freeing them from tedious, repetitive work that drains morale.
The benefits start with significant time savings as the time taken up by everyday tasks like bank reconciliation and accounts payable shrinks drastically. Those time savings will compound at month-end and year-end, allowing you to close the books without the extra hours and sleepless nights.
Each time you eliminate a manual task or the need for data entry, you also remove an opportunity for error – so you can expect less of the stress that comes with the need to hunt down and correct a mistake.
Alongside the time savings and reduced pressure, you’ll benefit from a new sense of control. Cash flow should improve and you’ll be better prepared for audit. You'll benefit from comprehensive, accurate figures available in real time, giving you confidence in the data and the decisions you base on it.
With fewer repetitive, manual tasks to handle, you and your team will be able to focus on the higher-value work that makes the best use of everyone’s talents and brings greater satisfaction at work.
How does automated accounting software work?
Automated accounting software applies rules-based automation to your data to process and organise it. It often augments these processes with machine learning and, increasingly, artificial intelligence.
The system might well pull in data from other software such as CRMs, billing, timesheet, ticketing or EPOS systems, or scan documents using OCR (optical character recognition). Rules-based automations then tell the system what to do with the data – where to put it, how to categorise it and what should happen next.
Machine learning allows the system to get better at tasks, based on its experience. For example, accounts payable automation improves as the system learns from your response to its suggested matches.
Artificial intelligence adds a powerful new dimension. An AI assistant such as iplicit Insights draws on its training to spot patterns and outliers, while keeping your data walled off from the wider online world that public AI tools train on.
Is automated accounting right for your business?
Many medium-sized organisations lack the automation features that small businesses have taken for granted for years. That’s because they’re still using on-premises finance systems that can’t easily be integrated with other software or updated without extensive technical support.
Other mid-market organisations have outgrown entry-level cloud accounting products that served them well when they were smaller but have not been able to keep pace with their greater size and complexity.
If you’re in either of those situations, you’re likely to see substantial benefits from a move to a powerful cloud-based finance system. Those benefits will take the form of big efficiency gains but also in the form of comprehensive, real-time, actionable data.
FAQs
What is the difference between automated accounting and AI accounting?
Automated accounting uses rules-based automation to process data. It employs technologies like OCR (optical character recognition) and integrations with other systems through APIs (application programming interfaces). It often uses machine learning to improve as it goes.
Artificial intelligence is trained on vast amounts of data, enabling it to spot patterns, find outliers and recommend action.
Can automated accounting replace an accountant?
No – but it can do many bookkeeping tasks that can take up a lot of a finance team’s time. Judgement, interpretation and decision making are still human work.
What accounting tasks can be automated?
Tasks that can be aided or done entirely by automation include: bank reconciliation, accounts payable, approval workflows, recurring billing, credit control, prepayments and revenue recognition, intercompany transactions and production of reports and dashboards.
How is AI changing automated accounting?
Artificial intelligence, integrated into finance software, takes the capabilities of automated accounting to a new level.
The ability of AI to process huge amounts of data, identify patterns and flag outliers makes it an enormously useful tool for finance professionals. It can offer commentary on figures, spot trends, flag risks and respond to your queries in a way automation has not been able to before. You can not only see reports in real time but can ask questions in natural language and see immediate analysis.
All this can be achieved in a system that’s kept separate from the wider online world, significantly reducing the risk of AI hallucinations and ensuring your data remains private and secure.
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