Automation in accounting could help your company to save more time, cost and improve accuracy.
Data entry, retaining supporting documents, invoicing, and creating financial reports are just a few tasks that can be automated with minimal human involvement.
Accounting is one of the core functions of every business to generate useful financial information, as well as to meet obligations, tax reporting, and analyse the financial performance of a business.
While accounting operations can be automated in many ways, there are certain tasks that can’t be automated. Automating accounting processes are typically used to reduce the need for repetitive and manual operations that are connected with the profession.
Here are six ways to use automation in accounting:
1. Month-end reporting
Monthly financial reporting is usually essential for a business. Performing bank reconciliation, classification transactions, generating various reports such as profit or loss, balance sheet, ageing of receivables and payable, etc. With correct data, month-end reports generated by the reliable accounting system will help the entrepreneur to make a correct decision to bring the company to the next level.
This process occurs regularly. Therefore putting systems in place and making them error-free is critical.
2. Account Payables
A business should capture accounts payable to identify the business’s liability up to date. If you fail to process an invoice on time, the business may lose a significant supplier or be forced to pay interest on your accounts payable. The reputation of the company will be at state due to long outstanding invoices not being paid which might be due to wrong invoice data wrong capture in the system. Manual processing is prone to error due to the volume of invoices that arrive each month.
Oftentimes there will be large numbers of incoming invoices. Receiving or scanning invoices, analysing digital copies, extracting essential data, manually entering it, and finally checking for errors are all part of this process. If this were to be done manually, it would take a significant amount of time.
Hence, an automated accounting system can improve efficiency and accuracy by uploading the invoice to the system, the automated accounting system will automatically capture the vendor name, invoice number, invoice amount and even descriptions in a more advanced automated system, eventually generating comprehensive ageing of account payables report for analysis.
3. Invoicing to customer
Invoicing to customers is one of the most important processes of a business. The invoicing process could be time-consuming that involves multiple steps such as: invoicing, sending out invoices to customers, following up payment, capturing payment, etc.
By using an accounting automated system, you can customize your online invoice, easily set up the payment term, tracking of receivable, set automatic reminders and set up repeating invoices that you need to invoice monthly/quarterly. Whether a company has a good product to sell is not be a critical factor to allow the company to excel. Without on-time billing to the customer, this will allow the customer to drag your payment to you and the company cash flow will be at stake.
4. Bank Feeds
The manual way of preparing accounts is to download the bank statement, manually key in every transaction into an excel spreadsheet, and identify them one by one.
With an automated accounting system, you are allowed to link the bank feed directly to the accounting system. Bank feeds automatically import transactions from your bank or financial institution directly into the accounting system, eliminating the need to import transactions manually.
5. Bank Rule
Manually keying in the transactions type (invoice receipt, payment, bank charges, etc) is the old way method to prepare an account.
With an automated accounting system, once you set up the bank rule for the first time, once the bank feeds flow into the system, it will help you by suggesting the right type of transactions while completing some of the details for you.
6. Fixed Assets Register
Keeping track of the fixed assets register is a tedious task, manually calculating the depreciation amount monthly in an excel spreadsheet, will be time-consuming and sometimes the formulae may run incorrectly and lead to wrong information.
The automated accounting system helps you to capture the fixed assets register date, reference number, useful life, amount, and with one click, the system will run the depreciation amount and recognize them in the profit or loss.
DNA Accounting provide accounting service for small business in Singapore, we will recommend you the most suitable and cost-effective automated system available in Singapore.
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