Accounting is perhaps one of the more manual processes in a business — or at least it used to be. Its importance in the daily running of a business is felt most especially when trying to close your books at the end of the month. It is tedious, intricate, and highly prone to human error.
Accounting automation has come a long way from calculators and Excel worksheets. Huge chunks of the entire numbers-heavy process that used to take up a lion’s share of the man-hours can now be done in a matter of minutes. And the instances of miscalculations due to human error have dropped significantly with the introduction of automation in the accounting process.
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How AI helps manage your accounting
Perhaps the simplest way to accomplish your accounting activities is to outsource accounting. Many accounting companies use AI when handling their clients’ accounting needs. This cuts down on process time and errors on their end. Outsourcing can also remove the burden of having to do your own books.
However, if you want to keep accounting in-house, then getting your process automated is an excellent way of improving and streamlining the entire accounting process.
Automation streamlines repetitive tasks
The entire accounting process is riddled with repetitive and rule-bound tasks. This is the perfect condition for automation.
These repetitive administrative tasks most probably take up a lot of production time. When you integrate automation into the accounting process, it takes these repetitive tasks, identify redundant areas, streamline the whole process and get these steps accomplished in a significantly shorter time than the old manual process.
That’s not all automation does, either. It can help you analyze large chunks of data and make sense of it. AI tools can correctly categorize data and analyze them, create reports, and help you upload your documents with ease.
Automation improves quality and productivity
Anything man does can be prone to error, especially when we talk about numbers. The old adage “to err is human” is absolutely correct.
When it comes to bookkeeping and accounting, errors in computation or data entry can have a large impact on your business. The least of which is the time it would take to find the error and correct it. The worst is filing erroneous reports that have legal consequences.
When you automate, you remove human intervention. Your process is now run by codes and algorithms. Machines rarely make errors. In fact, when you automate processes, the quality of your output improves significantly. And when you automate accounting processes, you get rid of human error in your reports. What you get instead is error-free books that reconcile perfectly and month-end reports that are spotless. As long as your AI accounting tools are running perfectly, that is.
Automation keeps you on top of compliance and regulatory matters
A large part of accounting is ensuring that your company remains compliant to the rules and regulations that govern your business. AI tools can help you with this.
Automation can allow you to conduct your own internal, cyclical, or continuous financial auditing quicker and more efficiently. This ensures that your company is not unknowingly breaking any rules or regulations. This helps you avoid fines and sanctions as these can have varying degrees of negative impact on your business.
The data capturing capability of automated tools make auditing a less tedious prospect. Your system can automatically make adjustments to the records and reports based on the data it gathers. Your AI-powered software will make sure that your company is abiding by the laws in whatever jurisdiction your business is in. This also makes sure that your books and reports are accurate at any given time if the reporting month. Not to mention that it takes a huge load off your employees’ shoulders.
Automation helps you detect fraud
One of the pitfalls of anything financial is fraud. Fraudulent transactions can cost you clients, especially if the fraud goes undetected for a long time.
Because of its capability to capture, record, and keep track of data, AI systems can help you detect fraud. Your system can flag any suspicious activity that deviates from the normal day-to-day activities in your accounts, or in your clients’ accounts. Early fraud detection can save your business a lot of cash and you from the headache that could come from fraudulent activities. And because of machine learning, your system learns from any corrections done by your employees, and from audits. This makes any further reports even more accurate.
Automation could make your employees happier
Accounting will be a lot lighter when your employees don’t feel burdened by manual, administrative tasks. These repetitive processes can get tedious and tiresome. And the more tired your employees get, the more it will impact the quality of their output.
Automation will remove these repetitive tasks and free up your employees’ day to focus on other more strategy-driven tasks that will help improve productivity. And having less burdened, more engaged employees makes managing accounting a lot easier.
Automation in accounting can bring plenty of advantages that impact not only the accounting silo but the entire business.