Gone are the days when accountants and finance professionals lay buried under heaps of receipts, forms, and documents. Instead, in these post-COVID times, they have emerged as the leaders of change who have helped businesses navigate such uncertain times.
What's interesting, though, is that most businesses worldwide that geared their employees to brace for these times had one thing in common. They used accounting automation like a superhero suit.
These software help finance folks and accountants enhance their capabilities and upgrade their processes and workflows. As a result, they now reap the benefits of simplified and streamlined processes with an added layer of accuracy and transparency to all things accounting.
Do you want to know the secret sauce behind how they achieved accounting and financial success with the help of automation tools and software? This accounting automation guide explores everything you need to know and how it can benefit your business. So, let's get started!
Simply put, accounting automation is the process of using software to complete manual, mundane, error-prone, and repetitive accounting tasks.
With these softwares, accountants no longer need to create and maintain ledger files and manually enter countless rows of data. Instead, with all the fundamental formulas built in, they can easily create reports in just a few clicks.
Keep in mind that although computerized accounting software has existed for some time, recent developments in the automation sector have increased its capabilities tenfold.
Today, accounting automation software has eliminated the most redundant aspects of accounting, giving accountants and finance teams more time to focus on financial planning and analysis.
But how did we get here?
The accounting language dates back thousands of years, with its oldest records dating back to the Mesopotamian civilizations some 7,000 years ago. Records of accounting from this time show business and financial transactions noted on clay tablets.
Here's some interesting research by Career Trend and Investopedia on the brief origins and history of accounting:
Despite the numerous new tools developed since then, the accounting and finance profession didn't see any significant changes till processes started to become automated.
Accounting and automation worked like a charm.
Automation could do all the heavy lifting—copying data between two sheets and pointing out discrepancies, errors, and missing information. It could also reduce, if not nullify, the dependence on human intervention. This ensured data was always accurate and reliable. This made everything easier, streamlined, and more efficient.
But to truly understand the impact of accounting automation, we first need to understand the challenges of manual accounting.
If you resonate with some or all of the points mentioned above, now is the time you consider shifting to an automated accounting system.
The reasons a business needs to automate its accounting are apparent—it’s easy to use and affordable, and it safeguards your company from financial leaks or mistakes that can cost you dearly.
“The Journal of Accountancy reported that around 53% of finance leaders say that AI can perform more than half of the tasks currently performed by people in the next couple of years. “
This means these softwares can solely handle all and any functions that can do away with human intervention. This will free up time for your accountants and let them focus on other important tasks.
Regardless of the size of your accounting function, rest assured that accounting automation will significantly improve the efficiency of your finance and accounting departments.
Here are some core accounting tasks that you can automate easily:
Automating your AP & AR is a great way to free up cash flow and reduce your dependence on human intervention. For example, all your invoices can be created, verified, submitted, approved, and paid for within a single platform. In addition, stakeholders can raise tickets for any problems in the process, enabling accountants to address challenges as and when they occur.
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Payroll automation helps you save time on processing direct deposits, filing taxes, and generating payroll reports. Additionally, the software instantly calculates each type of employee payment – salaries, overtime or double-time charges, bonuses, raises, deductions, commissions, and even hourly wages.
Expense management automation helps accounting teams track business expenses, gain faster approvals on employee expense reports, and improve turnaround times for expense reimbursements. It also helps with accurate spend data that results in better financial decision-making.
If done manually, all the processes listed above would require extensive paperwork and multiple systems to ensure accuracy and efficiency. With automation, organizations can eliminate much of the manual documentation these tasks would require, allowing their CPAs to focus on core business processes.
Before making your pick, ensure you are clear about your business and employee needs. This will give you a handy checklist of items your ideal accounting software would need. To help you out, we've compiled a list of features that we think are essential in a perfect accounting software.
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Ensure you go through different software in the market before making your final pick, as this will help you narrow down those that perfectly suit your business needs.
Here's a handy checklist of features to look for in a good accounting software:
And, of course, ensure the software can also take care of these core accounting modules with ease:
Finally, business owners need to remember that the accounting software they choose needs to have the ability to scale. This becomes important when your business expands and changes. How? Your accounting software would need to be able to accommodate more clients, send out more invoices, or even handle multiple projects that may have individual billable modules.
Now that you know what to look for in an accounting software, let's take a look at some of the most prominent accounting automation systems in the market so you can make your pick!
The following list of accounting software has been compiled by closely looking at reviews and ratings on G2 and Capterra. You'll notice each review followed by a relative rating on both platforms and a quote from a user.
Note: The order of this list in no way shows our preferences or their quality. The list just showcases a range of different softwares, some of which suit businesses at a particular stage or type. So read through the descriptions thoroughly and choose the software whose offerings seem best suited for you.
Quickbooks is easily the most popular accounting software in the market. With over 3.4 million SMBs on board, it's used by finance and non-finance professionals worldwide. Being quick to set up and reasonably priced, it offers tools and features beneficial for SMB accounting.
Top features of QuickBooks:
QuickBooks pricing:
QuickBooks ratings:
G2: 4.0 (out of 2,816 reviews)
Capterra: 4.5 (out of 19,046 reviews)
What users say about QuickBooks:
Quickbooks has become an indispensable element of my business, and I'm still using it after 11 years. It simplifies payroll, AP, AR, and anything else my accountant would charge me to do.
Speaking of which, Fyle has a native Quickbooks integration for expense management, so you can export your expense data with just one click.
Xero has a robust and thorough platform for accountants and an interface that is easy to use and understand for even non-financial employees. With Xero, finance teams and accountants don’t need to recreate records for the rest of the organization; employees can simply log in and obtain the information they need.
Top features of Xero:
Xero pricing:
Xero ratings:
G2: 4.3 (467 reviews)
Capterra: 4.3 (2,077 reviews)
What users say about Xero:
“A bookkeeper's bookkeeping service!”
So, Fyle also has a native Xero integration for expense management, which helps you shorten reimbursement cycles and keep all your expense data in one place.
While Xero and Quickbooks were built with SMBs in mind, Netsuite is for larger organizations. One of the most prominent ERP (Enterprise Resource Planning) solutions available, it integrates seamlessly with other core business functions overseen by CFOs.
The full suite of features includes various business performance tools, such as HR management, inventory management, product management, purchase order management, vendor management, and more. This, in turn, enables business leaders to manage all these aspects from one central platform.
Top features of Netsuite:
Netsuite pricing:
Netsuite ratings:
G2: 3.9 (1,860)
Capterra: 4.1 (818)
What users say about Netsuite:
“NetSuite is a scalable, customizable, and powerful software allowing you to run all ERP functions.”
See how Fyle’s NetSuite integration enables real-time expense tracking–receipts, cards, accounts, and everything else.
Unlike generic accounting software, Sage 300 CRE caters specifically to the complexities of construction and real estate businesses. This industry-focused approach translates to powerful features that streamline workflows and boost efficiency.
Top features of Sage 300 CRE:
Sage 300 CRE Pricing:
Sage 300 CRE Ratings:
G2: 3.5 (39)
Capterra: 4 (550)
What users say about Sage 300 CRE:
“Sage 300 CRE gives us the control we need to manage our construction projects effectively. The job costing features are invaluable, and the software integrates well with our project management tools.”
Fyle & Sage 300 CRE: Collect receipts via text, auto-match expenses, and seamlessly sync project expenses.
Being the first and only provider for the AICPA, Sage Intacct ranks the highest in customer satisfaction on all prominent review platforms. In addition, Sage claims that their customers achieve a 65% improvement in productivity and payback within six months of adoption.
Top features of Sage Intacct :
Sage Intacct pricing:
Sage Intacct ratings:
G2: 4.3 (1,581)
Capterra: 4.2 (322)
What users say about Sage Intacct:
“One of the best parts about Sage Intacct is its flexibility and intuitiveness. This system seems to have been built with the end-user in mind and has a very logical layout.”
See how Fyle’s 2-way integration with Sage Intacct can save you hours of manual bookkeeping effort.
Pitted against Quickbooks and Xero, Freshbooks is another major player in the cloud-based accounting ecosystem. Still, with one little difference – it takes particular care to build solutions for service companies.
From marketing agencies to therapists, if you’re creating value for your clients by applying your knowledge to their problems, Freshbooks is made just for you.
Top features of FreshBooks:
FreshBooks pricing:
FreshBooks ratings:
G2: 4.5 (645 reviews)
Capterra: 4.5 (3,659 reviews)
What users say about FreshBooks:
“What I like best about Freshbooks is it's a simple and easy-to-use time tracking and billing solution for a small business. It makes sending out invoices easy and provides an easy method for clients to make payments via credit card.
Wave is an excellent option for SMBs – typically startups with 1-9 employees, freelancers, or solopreneurs. Its most significant benefit is that customers can manage unlimited expenses and incomes, connect to their bank accounts and credits, and do all essential accounting functions for absolutely no charge.
The only fee you’d have to pay is for credit card transactions through the platform. And that’s it.
Top features of Wave:
Wave pricing:
Wave ratings:
G2: 4.4 (265 reviews)
Capterra: 4.4 (1,207 reviews)
What users say about Wave:
“I love how easy Wave is to use, how I can track all expenses, and run reports whenever I need them. Super easy to send invoices, get online payments and now even add payment links to websites.”
There’s more than one reason to love accounting automation—the above platforms help you automate invoices, bookkeeping, payroll, payments, and taxes. Wouldn’t you like the same level of control when it comes to managing your business expenses?
New-age expense management softwares like Fyle enables you to track all your business expenses from within one platform. Additionally, Fyle also has direct integrations with Visa, Mastercard, and American Express business credit cards from any bank.
What does this mean for your business?
Employees get notified of credit card transactions via SMS (in real-time!). They can simply reply with a picture of the receipt, and we'll automatically match it to the correct card transaction!
Or, employees can simply text a picture of the receipt and we will auto-match it to the transaction when the credit card data flows in.
RPA is a technology used to improve the efficiency of business processes by automating repetitive tasks with data processing that otherwise would take a chunk of your employee’s time.
Traditional automation differs significantly from RPA in many ways:
As mentioned earlier, accounting automation is like a superhero’s suit. It’s present only to help accountants and finance professionals do their tasks efficiently. However, the onus of analyzing and generating valuable insights generated by the software will always be on the accountants themselves. So no, accounting automation will not replace CPAs.
Automation, however, will change the scope of an accountant's work. By minimizing the time taken to work on various manual processes, accounting automation will give accountants and finance teams more time to work on high-impact business tasks. These include creating budgets and strategies, assisting the CFO in making critical financial decisions, and significantly increasing overall business profits.