Digital Transformation & AutomationFinance & Accounting

6 Accounting Tasks That Can Be Fully Automated

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Written by:
Leaman Crews - Guest Contributor

Published | Updated on
8 min read
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Automating simple tasks can reap huge returns in accounting.

Growth and financial success are the primary goals of any business. But as your customer base and revenue grow, so does the amount of work required to keep up with everything. To some extent, you can add more staff to help meet these expanding needs. But at a certain point, finding ways to make your business processes more efficient makes more sense. This is when you start to look into methods like accounting automation.

If your accounting team is still manually transferring data between spreadsheets and bookkeeping apps, your business could benefit from automating certain accounting processes. However, it's not always clear how to get started. Which tasks can be fully automated, and which will bring more efficiency to your accounting department? This guide will tell you everything you need to know, with a look at six accounting tasks that can be fully automated.

What is accounting automation?

Accounting automation is the use of accounting software and other technology to perform tasks you used to do manually. Most accounting operations can be automated using basic technologies, such as:

  • Optical character recognition (OCR): Scans and digitizes physical documents like receipts and pulls numbers from them.

  • Robotic process automation (RPA): Automates repetitive tasks by mimicking human actions.

With these technologies powered by artificial intelligence (AI) and machine learning (ML), businesses will be in a place where they don't need to input expenses and revenues through manual data entry. Accounting automation means your employees spend less time making manual calculations and more time on value-added work, such as data analytics or regulatory compliance. CGOs and other finance leaders have already noted the value accounting automation brings and the shift from traditional accounting to more data-focused roles. As evidence of this, Gartner research found that corporate controllers hope to increase the percentage of accountants with technology expertise to 35% within the next five years.[1]

What are the key tasks you can automate in accounting?

Your accounting team can start with automating some basic tasks first. Then, once they start to get familiar with these processes, they can move on to more advanced automation. Consider automating these basic tasks first:

  • Expense management

  • Payroll

  • Bank reconciliation

These and other repetitive tasks are excellent ways to ease into the world of accounting automation. When your team is ready, consider automating these tasks next: 

  • Accounts receivable

  • Accounts payable

  • Tax compliance and financial reporting

1. Expense management

Running after employees to collect receipts is never fun. If you issue corporate credit cards or reimburse employees for expenses, you can save time by eliminating the need to track spending via paper receipts.

Automating expense management can help you by:

  • Simplifying receipt uploading with snapshots

  • Matching data from company credit cards to receipts

  • Creating an easy approval process

  • Forwarding expense data for bookkeeping

/ Learn more

Want to know what expense reporting software can do for you? Discover the highest-rated and most popular software tools, verified by actual software users with the 2023 Capterra Shortlist.

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Hubdoc’s dashboard of bills received from different supplier accounts (Source)

2. Payroll management

Payroll is among the most tedious and highly automatable parts of bookkeeping. Sorting through employees' working hours, tax documents, and employment types can be time-consuming, especially when your team has limited time and bandwidth.

Automating payroll can help you by:

  • Calculating the net pay for each employee

  • Disbursing paychecks with a click

  • Inputting data to the accounting system

/ Learn more

Many accounting tools offer built-in payroll automation features, so check with your current vendor. When you’re ready for a new tool, consider payroll software that offers a free trial so you can try before you buy.

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Gusto’s view of payroll process automation (Source)

3. Bank reconciliation

Reconciliation is an integral part of accounting. It involves matching your accounting records to bank account statements to spot and correct any discrepancies.

Many finance leaders believe that it's a task requiring human judgment but, for the most part, it can be automated with little manual intervention. A bank reconciliation tool will check your records in a fraction of the time it takes to do it manually.

Automating bank reconciliation can help you by:

  • Matching your books and bank statements

  • Flagging any missing or double entries

  • Rectifying inconsistencies within cash records

  • Detecting fraud in real time by initiating periodic reconciliations

/ Learn more

Banking reconciliation is offered as a primary feature in most top accounting software. Check out the 7 Top-Rated Accounting Software to learn about this feature and others from the top accounting software available on the market.

deskera-software-book-reconciliation-feature-matc

Deskera Books’ reconciliation feature, matching account transactions with bank statements (Source)

4. Accounts receivable

Accounts receivable (AR) is the lifeblood of small and midsize businesses. Get it wrong, and it will directly impact your revenue streams.

Despite that, this aspect of accounting is given less care than it deserves. It includes issuing and tracking invoices and working with multiple teams—finance, sales, and customer service. The involvement of so many stakeholders and approval authorities makes this process time-consuming and prone to human error.

Automating AR can help you by:

  • Generating accurate invoicing against sales records

  • Getting quick approvals

  • Issuing prompt reminders to customers for payment

/ Learn more

Dig into the ins and outs of account receivable software with the help of Accounts Receivable Software Buyers Guide. You’ll be able to discover benefits, key features, price ranges, and more.

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Invoiced’s dashboard, showing a list of payments owed to Bob’s Burgers’ business (Source)

5. Accounts payable

Accounts payable (AP) is what you owe to others. It can be bills, rent, and so on. Delaying your payments can cost you by accruing expensive fees, and not to mention a lousy rapport with suppliers.

AP management requires many discrete steps involving multiple business units, which often becomes the cause of delays and bottlenecks for accounting professionals.

Automating AP can help you by:

  • Collecting bills in a central repository

  • Initiating auto-matching of deliveries received against bills

  • Automating approval processes for invoices

  • Initiating payment to suppliers

  • Recording transactions to your accounting software

/ Learn more

What’s the difference between AR and AP? Learn the similarities and differences between the two tools with our Category Compare: Accounts Payable vs. Accounts Receivable Software.

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Bill.com’s dashboard, which provides a summary of payments due (Source)

6. Tax compliance and financial reporting

Tax compliance and financial reporting are where automated accounting becomes more than transactional.

Tax season is stressful. Calculating tax obligations and preparing financial reports is labor-intensive and complicated for accountants. Moreover, these reports are problematic for non-accounting stakeholders to understand, thus requiring accountants in small businesses to take on the role as advisors to deliver insights.

Tax compliance and financial reporting software can do wonders for your finance teams by giving them the time and means to identify trends and even forecast results. It will simplify your tedious processes and be more accurate and efficient.

Automating tax compliance and financial reporting can help you by:

  • Updating taxes based on your region and current rates

  • Preparing tax returns

  • Creating financial statements

  • Predicting future revenue

/ Learn more

Interested in getting more out of your accounting software? Discover accounting software with tax management and financial reporting features to take advantage of your tech investment.

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Zoho Books’ analytics dashboard, where users can generate P&L, balance sheet, cash flow, tax compliance, and other reports (Source)

How to choose the right automation tool

For accountants in small or midsize businesses, choosing from the plethora of software tools is often a challenge. When selecting software, consider its compatibility with your existing tools and platforms.

There are two main ways you can add new software:

  • Directly integrating disparate applications via "native integration," such as connecting a payroll and expense management tool.

  • Using a third-party, full-scale automation platform connecting hundreds of accounting and non-accounting apps to gain better flexibility and performance.

The former may be a cheaper option, but it offers limited functionality.

How can automating accounts payable save time and money?

The ability to automate accounts payable can transform efficiency and cost for businesses. Automation eliminates manual labor and the risk of errors associated with traditional paper-based processes by streamlining invoice processing, payment approvals, and reconciliation tasks.

Time saved on routine tasks leads to higher productivity, leaving accounting teams free to perform higher-value activities such as analysis and strategic planning. Automation can also shorten payment cycles, improving vendor relationships and offering discounts for early payments. Accounts payable automation generally saves time, lowers operational costs, decreases storage space, and improves financial data accuracy and transparency.

What are the common challenges of implementing accounting automation?

Although accounting automation offers numerous benefits, there can be some challenges along the way. An ongoing challenge is employee resistance to change due to fear of job displacement or transition challenges due to new technology. In addition, integrating automation software with existing tools can be time-consuming and require planning and technical expertise.

Data security and privacy concerns are also a challenge, particularly when involving financial data. Moreover, automated processes must be accurately and reliably operated, as errors or system failures can bring severe consequences.

Despite the challenges of implementing accounting automation, it’s worth it. Beyond the increased efficiency, accounting automation can give you a stronger workforce. It helps accounting teams become more tech-savvy and learn how to improve standard business processes. A tech-focused approach to standard tasks can lead to improvements in other areas of finance, such as long-term liquidity planning, capital structure analyses, asset composition analyses and cash flow forecasts.[2]

How can AI and machine learning enhance accounting automation?

AI and machine learning technologies are reshaping accounting automation to enable data analysis, predictive insights, and continuous improvement. These technologies can analyze financial data, detect anomalies, and even predict future trends with remarkable accuracy.

With AI-powered algorithms, accounting systems can perform otherwise tedious tasks like data entry, reconciliation, and compliance reporting while also learning from previous transactions to improve processes over time continuously. 

Additionally, AI-driven analytics can help business decision-making, risk management, and strategic planning to remain in front of the competition. As AI and machine learning evolve further, they will continue to expand their ability to transform accounting and fuel innovation.

The future of accounting automation is bright, with new opportunities due to technology and business demands. A key trend is the convergence of RPA with AI and MK to enable end-to-end automation of complex financial processes. Cloud services are also becoming popular because of their scale, flexibility, and accessibility for remote work settings.

Blockchain promises to provide additional transparency, efficiency, and security in financial transactions and auditing. As information volumes increase exponentially, big data analytics and predictive modeling will become more common for proactive decision-making and risk management. Ultimately, the future of accounting automation is in leveraging emerging technologies for digital innovation, agility, and value creation.

Incorporating more automation into your business

After successfully implementing automation accounting in the above six areas, you can look for more opportunities for efficiency. To further embrace automation in accounting, choose the tasks you wish to automate and then pick the tool. Here are some things you can do to get the ball rolling:

Assess your processes to identify automation opportunities.

Create a list of pervasive and time-consuming tasks in your accounting workflow that you should automate. You can start with the above mentioned tasks and carefully examine how each functions within your business context.

Sign up for free trials.

Many software providers offer free trials, so you can test if their products provide the needed features. This is also a great way to go beyond the most popular options and explore alternative accounting tools that could suit your business needs.

Find the right software.

If you intend to purchase new software—or are dissatisfied with your current tool—Capterra's top features comparison guide for accounting is a great place to begin. It will help you see how different solutions stack up against each other. As you near a decision point, choose software that integrates well with your current solutions.



Looking for Accounting software? Check out Capterra's list of the best Accounting software solutions.

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About the Author

Headshot of Leaman Crews

Leaman Crews is a freelance writer and technology consultant specializing in finance, HR, and enterprise IT. A former newspaper publisher and editor, his work has appeared in publications across the United States.

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