When your company was smaller and newer, taking care of accounting by hand was probably not much of an issue. You might have had just a few clients to issue invoices to and a handful of vendors to pay each month. As you’ve grown, the number of clients you invoice and bills your business needs to pay most likely have grown, too.
If taking care of accounts receivable, accounts payable and other accounting tasks manually is proving to be too much, you can rest assured there is a better way. An automated accounting system reduces the chance of errors, streamlines the process and can improve your customer and vendor relationships.
What Is Automation in Accounting?
Traditionally, an accountant would input data by hand into ledgers. They would fill out invoices with the amount due and would review invoices received to verify they were accurate and that a vendor wasn’t double-billing them.
An automated accounting system takes on many of those previously manual tasks. It might collect invoices from vendors, either at a single email address or a digital lockbox, then sort through the invoices to ensure the information in them is accurate. From there, an automated accounting system can send the invoices to the appropriate party. If the information is satisfactory, the invoices can go to the person in charge of issuing payments. If there is a concern, such as a potential duplicate or fraudulent invoice, the system will flag it and send it to the right person for review.
Accounting automation also works for accounts receivable. Once a company sends out invoices to clients, the automated system can track payments. Instead of having an employee keep track of due dates and follow up with clients who are late on a payment, an automated system performs the task. It can send notices automatically a pre-determined number of days after a missed payment deadline, for example.
Account Automation Benefits
Your company can take advantage of the benefits of an accounting information system that automates certain tasks. If your business is completing accounting tasks manually, you might decide to switch to an automated account system to improve your efficiency, ease workflow and enhance the employee and customer experience. Here are a few perks of doing so:
1. Capitalizing on Time Savings
Manual data entry takes more time than trusting data entry to an automated system. When completed by hand, an employee needs to enter all the data into a spreadsheet, invoicing software program or ledger. They then need to review the data to make sure there aren’t any omissions or mistakes. An automated software program can work much quicker than a person, both in terms of putting in the data and verifying its accuracy. While the automated system is doing its work, an employee is free to do other tasks that might offer a greater benefit to your company.
2. Increasing Data Accuracy
People can be susceptible to making mistakes, and those mistakes can cost your business time and money. For example, if an employee misplaces a decimal while inputting data, your company can end up significantly underpaying or overpaying an invoice. You might also accidentally send an invoice to a client with an incorrect amount due.
Accounting software tends to be more accurate than humans when it comes to crunching the numbers. It’s simple for someone to make a math mistake when adding up figures or doing calculations. Depending on when the mistake is made, it can have significant repercussions for your accounting system. Software programs do the math and data entry for your team, improving accuracy and reducing errors.
3. Customizing Your Software
Your business likely has unique accounting needs and processes, which is why automated accounting programs give you the option of customizing your reports and the way you use the software. If your vendors send paper invoices, you can still use an automated accounts payable system with the help of optical character recognition. You can also set up an automated accounts receivable system to send custom emails to clients who are behind on payments and adjust the system to run reports that give you the exact data you need.
4. Improving Data Security
While many businesses have concerns about data breaches, automated software programs can prove to be more secure than manual and paper-based accounting systems. It is easy for someone to take home paper-based documents, which might contain confidential information. It’s also easy for those documents to fall into the wrong hands or to be misplaced. For example, a stack of confidential accounting documents can fall into a trash can or recycling bin.
When accounting data is stored in a software program, it can be more secure. Most accounting programs are designed to comply with strict security and privacy regulations, so you can have confidence that the information contained in the system is unlikely to fall into the wrong hands.
5. Generating Cost Savings
Switching to an automated accounting software program may help your company save money. Instead of spending a significant portion of their days performing repetitive, manual tasks, your employees can work on projects and perform tasks that provide real value and financial benefits to your business. Software programs also typically cost less than investing in a full, in-house accounting team.
6. Enhancing Customer Success and Satisfaction
Automated accounting software can help improve your company’s relationship with its customers. Emailed invoices arrive instantly, which allows clients to pay you more quickly. Using an automated system also allows you to send support documents digitally and instantly, streamlining communication with your customers.
Along with potentially shortening the time it takes your company to get paid, automating your accounting can help you provide better care and attention to your customers. Your employees can give more attention to providing the best possible support and service to clients, improving the relationship and encouraging them to work with you again and again.
7. Spurring Professional Development
One concern employees and companies often have about switching to an automated accounting system is that doing so will displace team members. Although the software does handle many tasks that were once the responsibility of an individual, it doesn’t necessarily eliminate the need to have an accounting team. Instead, an automated system can create growth opportunities for your team members. They’ll need to learn to use the system and in doing so, can increase the number of opportunities that might become available to them in the future.
In figuring out the intricacies of the software, your team can discover ways to use it that further improve efficiency and maximize the benefits of automation.
Learn More About Vanguard AP Automation Today
AP automation software can save your team time and money and can improve your business’ professional relationships. Vanguard System’s AP automation software can streamline your accounts payable process, reducing the occurrence of double payments and ensuring your company pays its invoices on time. To learn more about our software programs and see how we can help your business, schedule a demo today.