accounting automation processes accounting processes

Key Areas in which Automation Technology is Implemented

When you hear “automation technology,” images of robotics and assembly lines may come to your mind. However, automation technology has become continually more mainstream in businesses of all sizes. The goal of automation is to implement systems and procedures to complete repetitive tasks, allowing for human input to be minimized. As technology becomes more advanced, possibilities for business processes to become automated have exponentially increased, freeing up time for employees to complete more valuable tasks.

Some may associate automation with job obsolescence, but in actuality, automation allows for growth, fewer errors, streamlined processes, and increased employee engagement.

Types of Automation

You’ve likely seen automation first-hand, either when receiving a marketing email, updates throughout a recruiting process, or automated customer service support. IBM breaks down four types of automation common in business:

  • Basic automation, which automates basic tasks to help eliminate errors and speed up the pace of transactional work. Robotic process automation (RPA), which uses software technology to mimic human interactions within a digital system, falls within this category. One example of basic automation is the way in which e-commerce websites automate customer orders, eliminating the possibility of manual errors.
  • Process automation, which helps to manage business processes by increasing efficiency while providing valuable data. An example of process automation can be found within customer relationship management (CRM) tools, which can extract relevant information from online customer inquiries and route the lead to the sales team.
  • Advanced automation, which brings together humans and machines for overall system integration throughout the business. This can combine unstructured data with machine learning. Examples of advanced automation include predictive text capabilities or email filtering.
  • Intelligent automation, which is centered around artificial intelligence (AI), meaning that machines can learn and make decisions based on prior situations. AI is commonly encountered in customer service situations, in which the customer may first be required to filter their request through a virtual assistant, allowing for the eventual human interaction to be more specific and relevant.

Automation in Accounting

According to Sage, 90% of accountants feel that there is a cultural shift in accountancy that leans toward technological adoption. And, for good reason! Automating financial and accounting functions frees up time that can be spent in areas that require human critical thinking, such as analysis, strategy, and collaboration.

Automation in accounting is essentially a time-saving method, as it can speed along processes in accounts payable, accounts receivable, invoicing, collections, closing, and other tasks that must be completed on a regular basis.

Specifically, automation allows for the books to be closed faster. This study from the Ventana Research’s Office of Finance notes that 88% of accounting firms that had implemented automation within their processes were able to execute their month-end close in less than six business days. On the other hand, over half of accounting firms that haven’t implemented automation take considerably longer in their close processes. And, closing the books faster allows the accounting team to focus their efforts on other critical aspects of the business.

Accounts payable is another area that the majority of companies manage manually. Automating parts of the process, however, can save money and time; invoices are automatically generated and matched to documents, and approvals are electronically routed. This helps to provide better visibility and control for financial processes. Not to mention, it helps prevent fraud by incorporating touchless controls that occur automatically.

Slowly but surely, we’re moving past the days of accountants hunched over their computers spending long hours crunching numbers. By removing manual elements from the accounting team’s work, automation makes a complex process more manageable. And, as time progresses, automation will grow to be increasingly more common within businesses of all sizes.

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