We all know that massive corporations are leveraging technology to gain an advantage. They have the resources to use the latest tech tools and maximize their results. But if you’re working in a smaller company, you may be wondering what tools like accounting automation can do for SMEs. As it turns out, they can do a lot.
What Is Accounting Automation?
In just the past few years, we’ve seen tremendous advances in the power of computers to automate tasks. Using AI and machine learning, modern accounting software can automate many of the processes that have always had to be done manually, eating up hours of your accounting department’s time and energy.
Far from being available only to big companies with deep pockets, accounting automation tools can actually level the playing field, allowing small and medium enterprises to compete by making them more efficient and helping them achieve more with a limited budget.
How Can Automation Help?
One of the biggest advantages of using automation is that it frees your team to focus on higher-level tasks. Picture a chef in a fast-paced fine-dining kitchen with no help. They would spend hours on tasks like prep, dishwashing, and taking out the trash leaving little time to make amazing food. But with a little help on the mundane tasks, the chef could pour his or her energy into the creative work worthy of their culinary skill and make something truly great.
Without automation, your accounting team is like that harried chef. They’re spending hours on routine tasks, leaving them with little or no time for analytical and strategic work. In other words, there’s no one connecting your financial data to the strategy of your business, which is killing your results.
Let’s take the monthly close for example. A recent survey showed that average companies spent more than 6 days out of each month on the close. That’s a lot of time to be consumed by one thing and out of the game as far as actually helping the business operate.
If your accounting team is spending that kind of time on the close, automation could be the answer. No, you can’t automate the entire close, and you wouldn’t want to. There needs to be oversight from actual humans to make sure everything goes smoothly. However, it’s possible to shave days off the close by automating account reconciliation and leveraging tech to make your closing documents more accessible and easier to share.
Where Can SMEs Benefit Most From Automation?
Automated accounting has so much potential in a wide variety of applications, but how do you make the most of it in your SME?
First, automate the time and energy bottlenecks in your process whenever possible. Remember our earlier example of the monthly close? A major bottleneck in those six-day average closes is going to be account reconciliation – especially if you have a large number of accounts.
Automated reconciliation software can match transactions based on historical data and actually learn from the decisions of your accounting team to be more accurate and efficient each month. By cutting down the amount of time spent stuck in those bottlenecks, you’ll free your team to move forward.
Next, automate any repetitive, mind-numbing tasks that you can. Think data entry. By taking these things off your accounting team’s daily docket, you give them back their time to focus on more important things. You also avoid the simple human errors that often come with that mind-numbed state.
Finally, it’s time to let computers do what they do best – compute. While you’re diving more deeply into strategy with your newfound free time, why not let your software do some of the analytical heavy lifting? Today’s software can help you crunch the numbers, generating things like Flux Analysis which your accounting team can use to help guide the business toward its goals. It’s faster, easier, and more accurate than doing it all by hand.
Depending on your industry and where you need the most help, you can automate several areas, like the monthly close, reconciliations, accounts payable and receivable, invoicing, and payroll.
The Future of Automation Is Bright
Wondering how accounting automation may be able to help you over the next few years? The rapid advances of technology are putting it in the hands of more accounting teams and making it easier to use than ever before.
Technological firepower that once came only in an expensive, desktop suite is now accessible in the cloud, with some even offering mobile apps. That means tools that had been out of reach are becoming more and more accessible and affordable for smaller companies.
As SMEs take advantage of more automated business and accounting tools over the next few years, the playing field will definitely start to level. Don’t miss this opportunity to increase your accounting team’s accuracy and efficiency and make yourself more competitive with the big guys, even with a smaller crew.
Mike Whitmire is Co-founder and CEO of FloQast, an accounting close management software company headquartered in Los Angeles. The company works closely with a range of organizations of varying scope and size, helping them to close their books more quickly, efficiently, and accurately.