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11 Business Processes Automated with Accounting Software

In general, less time spent on administrative business processes is always a good thing, and accounting is no different. Not too long ago, though, the response to this would have been “too bad”.

Today, while some SME owners stubbornly torture their team with Excel spreadsheets, most invest in reliable accounting software and reduce what would take hours of work into seconds.

What is accounting software?

Accounting software is a custom-made program designed to automate accounting processes. Not only does this save a significant amount of time, it reduces the risk of mistakes from human error.

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To fully utilise the benefits, accounting software can also integrate with third party platforms and facilitate direct online transactions between the business and its various clients and vendors. Existing business owners will see the value in this, but new entrepreneurs may think it can’t be that bad.

Trust us, it is.

We’ve always believed in showing instead of telling, so to give a scale of how much time can be saved, here are eleven processes that can be fully automated with accounting software subscription.

Invoicing and Billing

Accounting software offers detailed accounts of all business transactions, allowing the following processes to be automated:

  • Invoicing – At the click of a button, a fully calculated invoice complete with company logo and product details like description, quantity, and price are all included.
  • Email integration – Invoices can be tied to a specific client email so you can immediately send it out.
  • Payment – Invoices can include links to bank portals and payment gateways to recipients can go from reading the bill to paying it in seconds.

That last part assumes, of course, that your clients want to pay the bill.

Expense Tracking

Automated tracking makes it quicker and easier to manage finances. It streamlines the process, saves time, and improves accuracy. Plus, it gives businesses visibility and assurance of compliance.

  • Customizable reports let you have a clear view of spending habits.
  • Set specific policies and require valid receipts to reduce fraud.

For businesses with frequent and unpredictable daily operating expenses, the ability to have real-time oversight of spending across departments and even individual staff members is invaluable. Not only does this let you plan monthly budget allocations, it gives you peace of mind knowing bills are accounted for.

Payroll Processing

This is a big headache for business owners lacking a background and/or experience in accounting. Previously, they would simply have to learn themselves, or hire an accountant to do it for them. Accounting software automates payroll calculations, tax withholdings, and direct deposits at a fraction of the cost of hiring an accountant solely for that purpose.

The software streamlines these activities with minimal errors, ensuring businesses remain fully compliant with the law.

Financial Reporting

Financial reports are a big part of assessing business performance and planning for the future. Accounting software can auto-generate many different types of financial statements including:

  • Balance Sheet to track assets, liabilities, and capital;
  • Income Statement to assess a company’s revenue and expenses;
  • Statement of Cash Flows to provide insight into a company’s liquidity; and
  • Financial Ratio Analysis Reports to measure an organization’s profitability.

It also offers customisable features like additional template toggles, brand-specific visuals, and custom charting options to help users quickly identify key insights.

Inventory Management

Accounting software can provide automated stock management for efficient tracking and record-keeping of inventory levels, helping you prevent stockouts and reduce costs.

Plus, it can save you time and hassle. Features like automatic inventory tracking, reorder alerts, barcode scanning, and multi-location management make it easier than ever to manage stock accurately.

Remember the previous entry about generating financial reports? You can even generate inventory reports with analysis to determine popular and slow-moving products to make informed decisions about how to allocate resources.

Accounts Receivable

Accounts receivable is critical to any business. Automating the tracking of customer payments ensures timely payments and prevents late payments or defaults. Accounting software can automate the following processes:

ProcessDescription
Credit ApprovalCheck customer creditworthiness.
InvoicingGenerate and deliver invoices.
Payment ReceiptsAutomatically update receivables.

Accounting software also shows customer balances, creates aging reports, and performs automated dunning.

Accounts Payable

Vendor bills are money a company owes to vendors or suppliers. Accounting software makes managing them faster, easier and more efficient. Here’s what it can do:

ProcessDescription
Data EntryScans invoices and enters info into software.
Approval WorkflowSends invoices to specific people for approval.
Payment ProcessingSchedules payment and sends automatically.

Accounting software also offers features like OCR for digitising paper invoices, matching purchase orders, flagging duplicates and tracking spend.

Tax Compliance

Just like with payroll obligations, tax compliance always makes SME owners uncomfortable, because there is always the nagging worry of breaking the law accidentally. Accounting software helps with this by providing features like auto-calculating and applying taxes, creating exact financial records, and paying taxes on time. This significantly eliminates mistakes, saves time, and lowers compliance-related risks.

Plus, accounting software can sometimes even generate tax forms for certain taxes, such as income, sales, property, and employment. This means business owners will never need to know the pain of spending hours hunting down the correct tax form – only to discover it’s outdated.

Cash Flow Management

Streamlining receivables and payables helps businesses better manage liquidity, increase performance, and make wise decisions. Automated cash flow management also ensures that a business can take care of monthly payroll and other short-term financial obligations without affecting long-term goals.

The software tracks spending and identifies areas that need attention, like customers who pay slowly or vendors with unfavorable terms. This insight can lead to tactical decisions about purchasing, billing, and collections, which can reduce costs and boost profitability. It’s a must-have for any business that needs fast insight into their finances.

As a bonus, you now have free time to track all those staplers and paperclips that mysteriously disappear from the office.

Fixed Asset Management

Fixed Asset Management is a process automated accounting software can manage. It refers to tracking and depreciating fixed assets. Tasks involved are asset acquisition, value tracking, calculating depreciation rates, managing repairs & maintenance expenses, evaluating historical costs, and forecasting future expenses.

Organizations can benefit from Fixed Asset Management. It reduces complexity, boosts efficiency and lowers labor costs. Plus, it ensures proper maintenance of assets, extending the life cycle of tangible assets. Keeping track of costs related to fixed assets used to be difficult before automated accounting software.

Expense Reporting

Part of why expense management is so easy with accounting software is that the process of reporting expenses is made effortless. Automation helps with receipt capturing and quick submission to the right people, ensuring transparency in office expenses.

Automated Expense Reporting saves time in each stage of the review cycle. It reduces compliance risks and lets staff submit and approve their expenses remotely.

Claim your free trial!

As with most software services, most accounting software will offer users a free trial to get used to the system and implement it into their organisation’s workflow.

If that sounds good to you, our accounting software partner Bukku which specially caters to businsses based in Malaysia offers a free 30-day trial to anyone.

Frequently Asked Questions

FAQs about accounting software and business process automation:

  • What is the purpose of accounting software?
    💡Accounting software automates various financial processes to simplify bookkeeping, financial reporting, and tax preparation.

  • What are some examples of processes that accounting software automates?
    💡Accounting software can automate tasks such as invoicing, payroll processing, bank transaction reconciliation, accounts payable and receivable, and inventory management.

  • How does using accounting software benefit small businesses?
    💡Save time, reduce errors, improve financial accuracy, monitor cash flow, and facilitate growth and expansion.

  • Is accounting software mainly used by accountants and bookkeepers?
    💡No, accounting software is designed to be user-friendly and accessible to non-accounting professionals, enabling business owners and managers to take control of their finances.

  • Can accounting software be customized to meet my unique business needs?
    💡Yes, many accounting software packages allow for customization and integration with other programs to create a tailored solution for your business.
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