February 10, 2021 Growing & Complex Businesses en_US Learn how you can automate core accounting processes and workflows to improve the efficiency of your financial management team. 2021 step-by-step guide. https://quickbooks.intuit.com/cas/dam/IMAGE/A5foHRp5r/automate-accounting-processes-small-business-owner-desk-computer-feature-us.jpg https://quickbooks.intuit.com/r/growing-complex-businesses/automate-accounting-processes/ How to automate accounting processes
Growing & Complex Businesses

How to automate accounting processes

By Kat Boogaard February 10, 2021

As a business owner, you have a lot to do. You’re always keeping an eye out for ways you can save some time.

Yet, small business owners spend an average of 4.8 hours every single week managing their money. And that’s just an average. In fact, 21% of business owners actually spend upwards of six hours every week on money management tasks.

What if you could reduce that number without having to hire any additional help? Spoiler alert: You can. How? Automate accounting processes.

What is accounting automation?

Accounting automation involves setting up a series of tasks (called workflows) and using technology to take care of those predefined steps—meaning that the accounting process is able to happen completely without you.

Accounting automation is a specific subset of process automation, which continues to gain steam among companies and business owners. In fact, research from Gartner found that the robotic process automation (RPA) software market grew by a whopping 63% in 2018.

To state that simply, RPA is the category of software that’s used to automate manual processes, and it’s becoming more and more popular.

Speaking of software and technology, what do you need to automate your accounting processes specifically? It doesn’t need to be complicated, especially if you have the right accounting software. QuickBooks makes it easy to establish and run accounting workflows, so you won’t need a separate automation solution.

Benefits of automation in accounting

Why is automation becoming such a major point of focus across industries? Well, because it offers a number of impressive advantages. Here are some of the perks of accounting automation.

1. Boost your operational efficiency

You might be surprised by the amount of time you invest in tasks that could easily be automated. That’s one of the biggest benefits of automation: You save time.

When you automate common workflows, it means you have to spend less time on data entry, bookkeeping, and other manual processes. You can optimize your schedule and dedicate those extra hours to more pressing priorities or important business development activities.

Plus, automation also means you don’t have to sink time into mundane, mindless, or time-consuming tasks. That’s important, especially when the average business owner spends 31 hours a week on day-to-day business operations.

You’ll make better use of your employees’ skills and time, which also translates to greater cost savings for your business.

2. Reduce human error

You’ve likely been there before: You entered the wrong digit in your Excel spreadsheet and didn’t notice it until much later when all of your journal entries were thrown off. Or maybe you forgot about a bill, and suddenly expense management is causing a major headache.

Fortunately, automation doesn’t mess up as easily as humans do. You’ll have reliable, tested workflows in place that take care of those tasks consistently and by the book.

It’s one less thing you need to worry about as a business owner. Your automated accounting processes are working—even when you aren’t.

3. Ensure consistent accounting practices

You’ve probably heard the cliché about there being more than one way to skin a cat, and you’ll admit that you and your team do things differently. There might even be some discrepancies in the way different members of your accounting department or finance team get things done.

Those different approaches and perspectives don’t cause any snags when you automate accounting and finance processes.

With those predefined steps in place, those accounting practices are happening reliably and are done the same way across all of your departments, tasks, team members, or customers.

5 stages of accounting process automation

Alright, you’re convinced that accounting process automation sounds worthwhile. Here’s the next question you have: How do you make it happen? We’re breaking it down into five simple steps.

1. Identify your accounting processes

You should start by figuring out which accounting processes can easily be automated. Not all of your accounting tasks are built for automation, so look for processes that:

  • You or an employee is doing on a repetitive and frequent basis
  • Don’t require a high level of human touch and personal connection
  • Don’t involve a lot of creativity or mental energy

Jot down any processes that meet those criteria on a list, and then pick one to start with. For example, perhaps your team spends a ton of time sending reminders about overdue invoices to your customers, and you’d like to automate those reminder emails.

2. Evaluate your technology

Automation relies on technology, which means you’ll need the right automation tools in place. There are dedicated automation platforms that will link together your existing apps and enable them to “talk” to each other. These include:

However, QuickBooks Advanced has a number of built-in accounting automation features, which means you won’t need separate automation software for the workflows we’ll discuss here. All of them can be created directly within QuickBooks.

3. Assign a stakeholder

Once it’s set up, an automated process will run on its own—that’s the beauty of it. But that doesn’t mean it should be completely left to its own devices.

Assign someone to oversee that automated process, whether it’s you, someone on your accounting team, or a different employee.

They’ll serve as the “point person” for that automated workflow to ensure that it’s working correctly and troubleshoot if any errors or problems crop up.

4. Set up a workflow

Here’s where you’ll roll up your sleeves and actually set up the workflow—the set of steps that will be automated. Each workflow will have the following:

  • Trigger: A predefined event that kickstarts the automation. Think of it as the first domino in the line.

    • Example: An invoice’s due date passes.
  • Action: What happens in response to the trigger.

    • Example: A reminder email is sent to that customer.
  • Result: The intended goal of your process.

    • Example: The customer clicks the link in the reminder email and settles their overdue balance.

That’s a simple example, and automated workflows can have numerous triggers, actions, or results and become far more complex than that. But we’ll just stay focused on the basics for now.

5. Test your workflow

Once you have your workflow set up, give it a quick test run to ensure it’s working the way it should. That’ll give you some added peace of mind when you step away and let that automated process run on its own.

Example workflows: 4 accounting processes you can automate

Accounting and your financial processes feel complex, which can make automation seem counterintuitive. Is it even possible to automate some of your accounting practices?

Absolutely. In this section, we’re digging into four common accounting processes you can automate directly within QuickBooks.

1. Accounts receivable

As many as 44% of small business owners who had cash flow issues admit that those problems were a surprise. That’s proof that it’s important to stay on top of the money your business is owed from your customers.

QuickBooks offers a number of ways to automate and manage your accounts receivable, including setting up:

Imagine that you run your own marketing agency, and you provide monthly social media management services to Client XYZ. Rather than needing to remember to send their invoice on the last workday of each month, you could set up a recurring invoice so that they automatically receive their bill.

To do this within QuickBooks, you’d click the button to create a new invoice and fill out the necessary information, including the payment options you accept. Select “make recurring” and then customize the template. Just like that, invoicing happens without you.

If you want to take this automation a step further, a recurring payment means you’ll collect the money you’re owed on a regular basis without you or your customer lifting a finger. Here are the steps to create a recurring sales receipt.

2. Payroll

According to a recent QuickBooks Live business growth survey, 97% of small business owners say they personally manage at least one area of business operations. At the top of the list, according to the survey, is payroll.

Needless to say, this is another accounting process that’s ripe for automation, and setting up an automated pay schedule is surprisingly easy within QuickBooks.

In the left hand menu, select “employees,” “payroll settings,” and then “pay schedules.” Choose the pay schedule you want to automate, and then under “pay run automation,” click the button for “click here to configure.”

From there, QuickBooks will walk you through a four-step process for automating your payroll. Here are more details about how that works.

Once you have it set up, your employees will get their hard-earned money, without you needing to spend time on that tedious process every two weeks (or however often you run payroll).

Don’t worry—if something changes, it’s easy to stop or pause your payroll schedule automation and make any tweaks or updates.

3. Financial reporting

When you make business decisions, you want to do so with as much accurate, real-time data as you can get. But pulling your own reports on a frequent basis makes your head spin.

This is another accounting process that QuickBooks Online can take to the next level to give you in-depth reporting insights. This automation will deliver reports to you (and whomever else you select) via email on a set schedule. You can even include numerous reports in a single email.

In QuickBooks, go to the “reports” menu and then choose “scheduled reports” and “schedule setup.” Choose the report(s) you want to send on that schedule and click “next.” Here’s where you’ll choose your schedule and frequency.

Compose the email that will be used to deliver your reports, select the email addresses of who should receive them, assign a password for the report attachments, and click “schedule.”

Once it’s running, you’ll get that important financial data delivered to your inbox on a predictable schedule. You have the information you need, without needing to pull reports over and over again.

4. Accounts payable

Your business earns money, but you also have money going out too. Neglecting to pay your debtors on time can impact your business credit score and be all-around bad news for your reputation and bottom line.

Automation will ensure that you pay your bills on time, without needing to mark a bunch of dates on your calendar.

One of the easiest ways to do this is with a recurring bill. Create a new bill and enter the information that should be included on a recurring basis, such as the vendor, amount, and more.

At the bottom of the bill, select “make recurring,” enter a template name, and then select one of the following from the “type” drop-down:

  • Scheduled: Automatically creates the bill according to the schedule you specify.
  • Reminder: Reminds you or a team member to create the bill using the template you created.
  • Unscheduled: You can use the template to create the bill whenever you need to.

The scheduled option is the most automated, as the bill will be created without your needing to do anything. However, reminders can be helpful too—and you can even set them up to remember to make bank deposits.

Reduce stress when you automate accounting processes

Love it or hate it, you know that accounting is crucial for your business’s success. But that doesn’t mean that the burden rests solely on your shoulders.

Along with the help of a qualified accountant, automating some of your accounting processes can take a lot of stress and responsibility off your plate.

Get started by automating a few of the common accounting tasks we’ve outlined above, and enjoy that added peace of mind—not to mention your newfound extra time.

Complete the tasks that matter faster

Reduce errors with automated workflows in QuickBooks Online Advanced.

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Kat Boogaard is a freelance writer specializing in career, self-development, and entrepreneurship topics. Her work has been published by outlets including Forbes, Fast Company, Business Insider, TIME, Inc., Mashable, and The Muse. Read more