Accounting Partner Program

How to Make Accounting Automation Work for Your Firm

With the rapid acceleration of AI and automation in recent years, and the amount of media attention it’s garnered, you may think accounting is going the way of lamp lighters, switchboard operators, and VCR repair technicians.

Scary stuff—if you don’t know the whole story.

Gartner predicts that artificial intelligence (AI) will eliminate 1.8 million jobs, but the good news is it will also create 2.3 million jobs. So while the term “robo-accountant” makes for a clickable headline, automation won’t replace accountants.

A Thomson Reuters survey found that 1 in 10 accounting and tax professionals use ChatGPT/generative AI or planning to integrate these technologies into their operations. They’re using AI for data collection and analysis, tax research and optimization, strategic planning and forecasting, and even streamlining back-end operations.

KPMG announced that, of the companies they surveyed, nearly 72% are using AI in financial reporting or piloting the use of AI in reporting. In 3 years, that’s expected to increase to 99% of companies.

Clearly, AI-powered automation has the potential to be an accounting professional’s ally. Knowing how to make accounting automation work for you will make your job easier and allow you to focus on the best parts of being an accountant: building client relationships, offering advice, and providing services that clients really value.

Sound appealing? Keep reading to find out how to make accounting automation work for you.

What Is Accounting Automation?

Accounting automation is the use of software and technology to streamline and automate repetitive tasks, such as data entry, invoicing, payroll, and financial reporting. It can reduce manual accounting processes, eliminate errors, and enhance efficiency by allowing accountants to focus on more strategic, value-added activities.

Benefits of Accounting Automation

Automation is improving the way accountants work. Consider these examples of how process automation can benefit your firm.

Speed Up Transactional Accounting Tasks

If you’re relying on manual data entry, you’re spending a good chunk of each day on tasks that your accounting software can handle faster and more accurately. Automating straightforward accounting tasks such as posting transactions, making journal entries, and reconciling bank accounts and credit card statements can save a lot of time and effort.

Get Real-Time Data

If your clients’ books aren’t updated regularly, they’re basing their decisions on inaccurate information. Accounting automation software like FreshBooks can pull data from multiple sources—bank accounts, a payroll tool, customer relationship management (CRM) software, etc. These connections provide easy access to up-to-date financial data that can be used immediately to make cash flow forecasts and other projections.

Get More Accurate Data

Mistakes due to human error mean time lost for you and your client. Worse, they can misrepresent a company’s financial status, resulting in poor decision-making and making it harder to advise your clients. Using automated accounting tools reduces these risks.

Improve Data Security

Automation software limits data access, making it more secure and efficient than traditional physical file systems. The need to store physical receipts is largely eliminated, reducing clutter and the risk of data breaches associated with manual handling. Data is organized, encrypted, and secured in the “cloud,” safeguarding against cyberattacks and ensuring data integrity.

Easily Access Data

When your clients’ data is stored in cloud-based accounting software, you have immediate access to essential files and information wherever and whenever you log on. You can work from anywhere at any time, allowing seamless client collaboration and real-time updates, so you’re more productive and responsive.

Boost Your Bottom Line

Automated accounting software streamlines data entry, invoicing, and reporting for operational efficiency. Another potentially huge cost savings: You can operate with a leaner accounting team when routine tasks are handled by the software. That means your team can focus on more valuable advisory services for clients, too.

Find Time for Professional Growth

Machines can handle the repetitive, manual work, but they can’t do everything on their own. Your clients still need your expertise and judgment. When you leave the transactional tasks to technology, you have more time to grow your skills in other areas, such as building relationships and coming up with revenue-generating or cost-saving strategies.

8 Accounting Processes You Can Automate Today

To help you get started, we’ve identified accounting tasks that can easily be automated.

1. Accounts Payable

Accounts payable can involve a lot of repetitive validations and data-gathering, so automating one or more of the steps involved allows you to reduce accounting errors and save time.

Accounts payable automation can help you or your clients automate approvals, capture data from bills, and take advantage of early payment discounts.

2. Tax and Audit Documentation

Documenting income and expenses for tax and audit purposes is key to claiming valuable tax deductions, filing a complete and accurate tax return, and helping audits run smoothly. Accounting automation can help you maintain the tax documents you need and save time by ensuring all the data you need is in the client’s accounting system.

For example, FreshBooks automatically captures information from bills and receipts—including the merchant name, totals, and taxes—when clients upload a photo or take a picture of a receipt in the FreshBooks mobile app. This creates expenses and bills in seconds without the manual tasks of entering all of the information, ensuring all the necessary records are there at tax time.

3. Accounts Receivable

Properly tracking accounts receivable is crucial for a small business’s cash flow, but clients rarely give it the time and attention it deserves. Automating accounts receivable tasks can help clients generate accurate invoices and get quick approvals.

In FreshBooks, your clients can set up recurring invoices for their customers who regularly pay a set amount, and they can automate payment reminders to ensure invoices get paid on time. Your clients’ customers can also safely set up their credit cards for auto payments.

4. Reconciliations

Many accounting professionals believe reconciliations require human judgment. But the right accounting software can automate a large chunk of bank account and credit card reconciliations.

To help you and your clients get through reconciliations faster, automated accounting software can suggest possible matches based on past information from bank transactions and entries. You simply need to either approve the match if the entry is correct or fix the entry if it’s not.

5. Financial Reports and Data Analysis

Today, you don’t need to spend hours inputting data into a spreadsheet to generate financial reports.

In FreshBooks, for example, you can pull data directly from the client’s account information to instantly create balance sheets, profit and loss reports, expense reports, sales tax summaries, and more. Then, for help crunching the numbers, you can set up integrations with data analytics tools like Syft.

6. Posting Journal Entries

Many businesses have transactions that occur every month and monthly or annual journal entries that need to be posted regularly. Automating these recurring journal entries can save a lot of time.

In FreshBooks, all activities, including sending invoices, accepting payments, and creating credits and expenses, are compiled into journal entries. You can also create recurring expenses that will generate automatically on a set cadence—perfect for handling subscription-related costs.

7. Payroll

Running payroll can be tedious. You have to account for every hour, ensure you’re using the proper tax rates, and record every payroll run in the accounting software.

Fortunately, the process can be automated with a payroll solution integrated into your client’s accounting software.

FreshBooks Payroll is an easy-to-use payroll solution designed for small businesses. It is embedded directly into the accounting software and automates pay runs, payroll taxes, and more.

8. Tax Filing

If you prepare and file tax returns for your clients, automated tools can save time and ensure your accounting records are always tax-ready. Use payroll software that has automated tax filing or that offers integrations with tax solutions like Tallyfor for book-to-tax reconciliations and flowing data straight from the trial balance to tax forms.

Start Automating Your Accounting Workflow

If you’re new to automated accounting and machine learning, it can be hard to see the vision. Before you start digging into the technical aspects, it’s crucial to get into the right mindset.

Learn About the Possibilities

You don’t have to become an expert in AI, RPA, or other technologies to benefit from accounting automation. Instead, seek information from sources you trust.

Professional organizations like the AICPA and publications like Accounting Today and CPA Practice Advisor are excellent resources. Your accounting software provider can also be a trusted source. You may want to talk to other accountants whose business structure and size are similar to yours to learn what they use and why. (The FreshBooks Accounting Partner Program is a great place to meet like-minded accounting professionals.)

Leverage their expertise to help you stay on top of what’s possible.

Build the Right Foundation

Automation is challenging—if not impossible—if you’re not using cloud accounting software. So transition your firm and clients off any legacy on-premises accounting systems.

You’ll improve collaboration with your team and clients and benefit from any time, anywhere access and improved security.

Get Your Automation Plan Up and Running

Analyze previous findings to identify areas for improvement. Staff training is essential to use the software and automate accounting tasks effectively. After implementation, compare results with expectations. Then, make strategic adjustments to close gaps and optimize the automation process.

Embrace Your New Role

Computers can process information lightning-fast and error-free, but they can’t build relationships, think strategically, or use professional judgment.

If you feel like your soft skills could use a little polishing, focus on improving your confidence levels in communication, problem-solving, collaboration, empathetic listening, and having consultative conversations. These are the skills that will differentiate you from a number-crunching machine.

Which Accounting Process Will You Automate First?

If you’re still hesitant to dive head-first into automating accounting processes, remember it’s not an all-or-nothing proposition. Start small with some specific accounting tasks you dread doing. Once you see how much time and energy you can save with financial automation, you’ll gain the confidence to keep going!