What is accounting automation?
Think of accounting automation as tidying up your financial "workspace" before a big meeting. It helps you get all your financial documents organized for tax returns and monthly financial statements. It’s about gathering receipts, invoices, and other necessary paperwork, sorting them clearly and completely, and handing them over to your tax advisor or internal accounting team. It involves tasks such as:
- Collect and organize receipts and invoices: keep them neat and in one place so you can easily find what you need.
- Categorize transactions: match transactions to receipts and invoices. This ensures accurate reporting and helps avoid any mix-ups.
- Reconcile your accounts: compare your bank statements, credit card transactions, and bookkeeping records to make sure everything lines up.
- Track outstanding payments: know exactly who owes you money – or who you still need to pay – to stay on top of your cash flow.
How does accounting automation help your company?
Proper accounting automation has benefits that go far beyond keeping your books tidy. Here’s how it can make a real difference:
- Saves time and reduces stress: accountants and tax advisors work faster when your financial data is well organized. That means fewer billable hours and quicker results. More importantly, it spares you the last-minute scramble before tax deadlines.
- Improves financial insights: by staying on top of your data, you gain real-time visibility into your company’s financial health. What’s your cash flow situation? Are expenses creeping up? Accounting automation offers a clear picture so you can act proactively.
- Ensures compliance and reduces errors: messy records increase the risk of filing errors, penalties, or even audits. Organized books are not only easier for accountants and tax advisors to work with but also more likely to meet regulatory standards.
- Lays the foundation for growth: if your company is growing or seeking funding, clean and accurate financial records are non-negotiable. They demonstrate professionalism and reliability to potential investors or lenders.
What are the underlying data sources?
Accounting automation is based on cash transactions and incoming/outgoing invoices.
