Automated bookkeeping is having your bookkeeping taken care of solely by computers. Machine learning (ML) and artificial intelligence (AI) is set to mimic what a human would do to keep the books in order.
Some bookkeeping tools such as QuickBooks Online use a form of automated bookkeeping for basic tasks such as data entry and organizing data feeds. But, there’s so much more a business can get from automated bookkeeping to free up time and ensure the books are always in order.
Why Bookkeeping Is Important
Bookkeeping is an essential part of any successful business. It allows the owner to organize income and expenses, making budgeting a lot easier. If the books are not in order, outgoings can get missed leaving it up to guesswork.
With proficient bookkeeping processes in place, filing tax returns each year is a smooth task. And, having all financial information up to date means the taxman doesn’t have to chase.
The Benefits Of Automating Your Bookkeeping
There are many benefits to automating your bookkeeping. These include:
- Reduces human error. Automated bookkeeping eliminates human error.
- Provides real-time data. No need to wait for a monthly report from your accountant. Just log in and see a real-time report.
- Frees up your time. Automated bookkeeping frees up your employee’s time from menial data entry tasks.
- Store files securely. No need to keep years of paper receipts and invoices. Store e-copies securely in the cloud and access them fast when needed.
- Fast data retrieval. Before automation, finding financial data was a hassle. You had to call your accountant, who then had to find a file and send it to you. Now you can find information in a few clicks.
What Tasks Can Be Handled With Automated Bookkeeping?
- Automatically Sort Transactions
Using automated bookkeeping, your transactions are organized into the relevant category. An example is monthly recurring transactions such as subscriptions. Automated bookkeeping sorts these into the right expense categories without you having to lift a finger.
- Instantly See Bank and Credit Card Data
An automated bookkeeping system instantly shows bank and credit card debits in your accounting software. This ensures you always have an up to date picture of your business finances. No longer do you have to estimate, or wait till the end of the month for a report. Automation keeps you and your cash position updated.
- Automated Accounts Payable System
Normally you get emailed invoices and you or your bookkeeper has to file the invoice for auditing. This process is streamlined with automated bookkeeping, by using an automated accounts payable system. AI is able review information on an invoice and match it to the correct category code for approval.
- Calculating Payroll
Payroll can be a difficult and stressful task for any business owner. Regulations and laws need to be adhered to, otherwise penalties are given. An automated payroll tool removes this stress and the human error risk. Many accounting platforms already include payroll automation. If not, specific tools such as SurePayroll and ADP do the job well.
- Scan, Upload and File Receipts
If your employees use company credit cards or get reimbursed for expenses, automated bookkeeping eliminates the need for paper receipts.
Just take pictures or scan receipts and upload to the system. Key information will be taken from the receipts, stored and archived for later use. Some automated bookkeeping systems can also be set to automatically reimburse expenses to employees.
3 Great Tools To Try Automating Your Bookkeeping
Xero is a top choice for accountants and small businesses. It’s big draw is the simple, robust interface that non-financial people can use easily. It has all the features a small business will ever need.
QuickBooks is another easy-to-use, popular automated bookkeeping system perfect for small businesses. Use the handy receipt and invoice tracking tools and as you scale, you can move onto QuickBooks Enterprise, built for the complex requirements of larger businesses.
NetSuite is geared more towards larger companies or those growing at an incredible rate. All common accounting procedures are automated including compliance management, payable and receivable and general ledger.
Alongside the basics, you get access to a range of business performance tools such as inventory, HR software, logistics, supply chain management and more.
Why Hire A Bookkeeper To Oversee The Automation Process?
To get set up with automated bookkeeping, it’s recommended to hire a bookkeeper who understands the accounting process. To fully automate your bookkeeping, rules need to be set within the system, relevant to your business requirements.
If automation is not set up correctly in the beginning, mistakes will be made continually giving you inaccurate data. Automated bookkeeping also needs to be reviewed at regular intervals. This helps to catch any errors and allows adjustments to be made when necessary.
Final Thoughts On Automated Bookkeeping
Automated bookkeeping is the best way to track business financials without even thinking about it. It’s way more cost and time effective than doing everything by hand, meaning you have more time and money for other important tasks.
Plus, no longer will you have to stress when it’s time to do payroll or to pay taxes – your books will be in order and everything ready to go!