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What You Should Know About Bookkeeping Automation

automated bookkeeping

The whole finance team is recording and categorizing financial statements in bundles of hard copies. At the end of the month, the company pays the wrong invoice to the wrong supplier. 

In order to view the correct invoice, the team has to analyze the hard copies repeatedly. This manual process leads to the wastage of time and money. 

To reduce this issue, many small firms are acquiring automated bookkeeping services. It automates payrolls, accounts receivables, and payables, recording and categorizing every financial transaction. 

Automated bookkeeping software has reduced the hefty task of recording and categorizing financial transactions within minutes.  

What is Automated Bookkeeping 

Automated bookkeeping is the procedure of recording, managing, and analyzing financial transactions by completing hourly tasks in minutes.

It reduces human interventions, errors, and mistakes in a very systematic way. Moreover, it also shifts the financial entries recorded in bundles of hard copies to one cloud computing software. 

Comprehensive Facts about Automated Bookkeeping

  • Human errors and mistakes contribute to 90% of accidents. 
  • Automation boosts global productivity by 0.8-1.4% each year, stated Mckinsey. 
  • Employees agree that 240 hours of a year can be saved by automation. 
  • 1 out of 10 business leaders states that automation makes the hiring process easy. 

Essential Characters of Automated Bookkeeping 

  • OCR-Optical Character Recognition 

Automated bookkeeping software automatically retrieves and places all necessary details of invoices in the required place. Authorized persons just have to scan and upload a picture of the receipt. 

It automatically retrieves all the data like serial no., name, and purchase item list and automatically puts it in the columns. 

For example, an authorized person scans a receipt of any expense. Web-based software automatically directs this transaction to the expense side of the balance sheet. 

  • Saves Time 

Traditional bookkeeping requires a lot of time the whole finance team is needed to record and reconcile transactions. Now advanced technology has enabled companies to use automated bookkeeping software.

Companies are now automating their tasks like generating payrolls and account receivable and payables. 

Moreover, automating software can automatically generates payrolls and saves time from manual work.  

  • Improved Record Accuracy

Finding any previous transaction from bundles of hard copies is a hectic task. Automated bookkeeping makes it easy with just one click. Any transaction can be seen without going through hard copies. 

An authorized person can access it 24/7 for the purpose of making any decision. It also ensures that data is accurate and reliable without any human errors. 

  • Advanced Financial Insights 

Employees usually wait until the month’s end to process transactions and make new resolutions. AI has made this easy because apps first understand the data before analyzing it. 

It allows businesses to make accurate decisions and can take instant action if there is any mistake. 

  • Enhance the Focus of the Finance Team 

Automation to ease the process of recording and categorizing transactions, so there is plenty of time for the finance team now. This time can be utilized by providing them with training for any other important task. 

Due to automated bookkeeping finance team can focus on more strategic and complex tasks like modeling and financial analysis. 

The Future of Automated Bookkeeping 

Automation can not work alone without human intervention. The ongoing demand for AI is enhancing development that improves complex transactions and workload. 

It is not possible that AI can replace humans because some tasks require human intervention. For example, scanning or uploading invoices require a human. 

Financial management will always be cooperation between humans and robots. In some cloud computing apps, financial bots mean unique apps and software. 

Traditional bookkeeping is now replaced by automated bookkeeping, so it is giving more authentic and reliable results. These results are audited-ready, and owners can now make more instant decisions. The hourly work can be done in minutes. 

Key Takeaways 

Automation has increased the productivity of many companies. Most small business owners don’t understand the importance of automation in finance. But they forget that this aspect can boost their business instantly. 

It will save much cost and helps in increasing revenue. Gartner predicts that by 2024 69% of day-to-day financial tasks will be automated. 

Purchasing automated software is only a time investment, and it will save from doing hectic tasks like hiring and training employees. The instant financial insights will also help in making decision making. 

Owners can enjoy long-term relationships with investors because they can share real-time financial data for investment purposes.