13 accounting automation benefits explained

Whether it's your car's headlights turning on when it gets dark or your phone connecting to your Wi-Fi router when you get home, we all love when things happen automatically.

Now what if you could experience this same feeling within your accounting processes?

With automated accounting, you can.

By automating your accounting processes, you can reap a wide variety of accounting automation benefits, including:

1. Tax compliance
2. Simplified business processes
3. Cost-effectiveness
4. Accurate forecasting
5. Increased productivity
6. Improved customer relationship management
7. Increased security
8. Streamlined invoice approvals
9. Better cash flow management
10. Easier tax preparation
11. Reduced human errors
12. Effortless integrations
13. Cloud access

After all, accounting processes have become increasingly automated, dating back to the 1880s. To help you understand exactly how accounting automation can help your small business, let’s walk through each of the 13 benefits.

1. Tax compliance

One of the most notable benefits of accounting process automation is that most accounting software automatically complies with payroll reporting and tax regulations, providing your small business with tax penalty protection.

From sales taxes to business expenses, accounting software automatically tracks everything you’ll need come tax time. That way, you won’t have to worry about miscalculations or inaccuracies when filling out your small business tax forms.

2. Simplified business processes

An automated accounting system streamlines the financial management process, saving small business owners a lot of time for tackling other important business tasks. By automating specific steps, such as tracking expenses, you can also reduce the risk of errors and subsequent problems down the road.

Whether you’re a new business owner or have been running your company for years, financial management tasks can be complicated and confusing. Advanced technologies like this enable business owners with little to no training to manage their small business accounting operations and comply with legal requirements.

3. Cost-effectiveness

Accounting systems handle many critical administrative tasks, so you don’t need as much external help. This means you can get by with a smaller team or avoid paying an external vendor to manage all your financial needs. 

By automating accounting processes, you can put your resources to the best use. And, if you decide to hire accounting professionals, you can have them focus on higher-level needs. Accounting firms can help with detailed financial statements, forecasting and financial planning, and tax preparation.

4. Accurate forecasting

Understanding business trends and making educated predictions is key to growing a business. Accurate forecasting is essential to keeping your business in the black, planning for seasonality, and scaling growth. 

Automating your accounting processes can help turn raw data into easy-to-read reports with valuable insights. With this information, you can make smarter decisions regarding your business’s finances, like which costs to cut and where to allocate more resources.

5. Increased productivity

With accounting automation, various tasks are effectively taken off your plate, significantly shrinking your workload and providing significant time savings. Automation in accounting allows you to streamline workflows—which means fewer clicks, less data entry, and less time spent going back over your work. 

What’s more, the aspects of financial management that do require your attention, like recording expenses, analyzing cash flow, and approvals, are completed much faster. That’s because your accounting system is doing the heavy lifting for you. With increased productivity thanks to accounting system automation, you have more time to focus on other aspects of your business.

6. Improved customer relationship management 

With automated accounting processes, you can create and send invoices instantly and enable direct digital payments, providing a better customer experience. This can also reduce the time and energy spent tracking down outstanding invoices, allowing you to keep the peace with your customers. 

Plus, having more consistent payments means better cash flow management. It’s a win-win. Additionally, less time spent on accounting tasks means having more time to provide exceptional customer support that can help you grow a loyal clientele.

7. Increased security 

Accounting software can help keep data secure, offering additional protection for sensitive business information. With automated accounting software, all data transferred online is protected by encryption, helping keep sensitive information secure. 

Additionally, your data is automatically backed up at all times, ensuring it is protected if something goes wrong, whether you experience a computer issue or a lost device.

8. Streamlined invoice approvals 

Accounts payable automation allows customers to set up rules to establish a workflow for all invoicing. Then, the software does the rest. You can even set up recurring invoices so they’re automatically sent to the appropriate parties for approval. 

With more efficient invoice approvals, you’ll benefit from faster payment processing, meaning the money will be available to use sooner. This is especially important when the cash flow is tight.

9. Better cash flow management

Accounting software also automates accounts payable to monitor cash flow in real-time. This helps track spending, compare cash-in against cash-out, and forecast what to expect in the coming months so you can allocate resources accordingly. Cash flow management is one of the biggest challenges that small businesses face, so having this advantage is invaluable.

10. Easier tax preparation

As you now know, automated accounting provides myriad benefits, which are especially important when it comes time to file small business taxes.

In terms of tax preparation, automated accounting systems help by:

• Eliminating the need to track down critical documentation—all the information you’ll need will be easy to locate on this platform
• Automatically generating key reports and documents you’ll need while filling out tax forms
• Reducing time spent crunching numbers by providing accurate calculations for income and expenses
• Improving accuracy, which means you’re at a lower risk for an audit if you use the information correctly

Additionally, automating your accounting processes can help you easily categorize and sort expenses so all the information is right there when it’s time to determine which tax deductions you can claim. You can even directly upload your receipts, which are then automatically saved and categorized.

11. Reduced human errors

By automating your accounting processes, you help reduce the risk of human error by cutting down on manual entry. This can help limit common accounting errors like typos or accidental duplicate entries, leaving you with accurate financial data, all while saving time.

12. Effortless integrations

Another benefit of automating accounting processes with software is integrating other processes, such as payroll. From automatically paying your employees to automatic tax calculations, adding integrations to your accounting software can help you oversee multiple business processes in one easy-to-use place.

On top of that, you can integrate time tracking to get a bird's eye view of who is working on what, providing you with important information you can use to make informed business decisions.

13. Cloud access 

If you automate your accounting using cloud accounting software, you can access your books anytime and any place. Whether you’re a remote worker or looking to stay on top of your finances away from the office, cloud accounting software is an excellent way to easily access your accounting information on the go.

Streamline your accounting and save time

With an understanding of the accounting automation benefits you and your small business can experience, you may consider automating your accounting with the help of accounting software. That way, you can spend less time on repetitive tasks and more time growing your business.