Automation of a business’s accounting system has become more necessary due to COVID-19. Many companies have learned their lessons for business continuity amid prolonged lockdowns and slowed consumption or delivery of services. Accounting takes a special role in business processes and thus, it needs proper attention. Businesses must ensure that their accounting operations are conducted seamlessly despite disruptions.
See our previous article on Optimize Your Accounting Practices in China
Some services cannot be done remotely and are almost impossible to automate. However, other sectoral functions such as retail check out, manufacturing, and task management highly need automation including accounting.
What is accounting automation?
Accounting automation is the process of passing some essential finance and accounting functions from accountants and bookkeepers to accounting software.
Functions that can be delegated to accounting software include:
- Accounts reconciliation;
- Financial records updating, and capturing; and
- Manipulating, and interpreting accounting data.
Automation leaves room for better data integrity, less latency for human errors, and more efficient repetitive processes.
What accounting functions can be automated?
For starters, businesses can look at the effects of automating certain accounting processes, and not in their entirety. By doing this, they will be able to consider the benefits of having the whole accounting system automated. It may be that some will find it inconceivable since several steps in the accounting cycle require heavy human intervention (judgment and analysis). This especially applies to those businesses that have wholly manual accounting since the beginning of their operations.
OCR and AI Technology instead of manual data input
“Intelligent” data validation and verification is a very important step up from manual data input. Optical Character Reader/Recognition (OCR) technology allows users to upload digital copies of physical source documents to their accounting systems. Then, the Artificial Intelligence (AI) Technology incorporated in the system will pick the appropriate data and automatically inputs those data.
Managers, accountants, and company staff can upload expense receipts, vendor bills, or invoices as pictures from a camera or scanned PDF copies and the system will automatically extract the information required to be filled in.
Online Invoice Processing
Manual invoicing involves the manual processing of transactions. It can involve receiving an invoice from vendors to payment clearing by the finance department, and all processes in between that are more or less manual as well. This is time-consuming as it requires more manual effort. Moreover, each step of manual invoice processing may be subject to human errors.
On the other hand, automating invoice processes will eliminate human errors because everything will take place online. Among the accounting functions that can be more organized with automation include keeping track of your vendor bills and their subsequent payment, as well as your sales invoice and tracking your accounts receivables.
Online approval process
Employee leaves, expense requests, and allocation expenses, along with invoices are documents that usually require approval from management. Automation of this process will provide for faster transactions. Paper trail mishandling will be minimized if all source documents are uploaded as PDFs or images in the system.
Adaptability to domestic government requirements
Some companies prefer accounting systems that apply to one country’s accepted accounting standards but not in some. In China, it is important to have an accounting system that is fully compliant with Chinese regulations. Considering the tax variation in China’s tax and accounting system, it is important to have accounting software that can localize tax rates and can easily incorporate them into Chinese accounting software, much like Kwikdroid.
How do we automate the accounting process?
All different kinds of accounting software available in the market offer varying ranges of functionality, depending on your company’s needs. The best way to start is to identify which parts of the accounting process require automation if not all of it. Once identified, talk to experienced professionals who are well versed in the industry.
S.J. Grand offers a variety of services including IT consultancy, Tax and Accountancy, and Finance. Among our offered services is the installation and maintenance of Kwikdroid, a secure multi-lingual, Cloud-based online platform that is fully compliant with Chinese regulations. Further, it standardizes, automates, and optimizes all your business’s daily accounting and business management operations.
Kwikdroid has OCR and AI technologies, Cloud-based processing, and an online approval system. It is also built with an internal chat system that gives you a direct line to your S.J. Grand Certified Accountant.
Pros and cons of accounting automation
Automation is not meant to completely replace accountants. It was created to assist accountants and bookkeepers to free them from the grunt work and let them focus on higher-value functions. But like everything else, automation has its pros and cons.
On the negative side, automation means less human intervention, which means some repetitive and highly mechanical accounting functions will solely go to accounting systems. On the positive side, accountants can avail of higher value quantitative and qualitative jobs that computers cannot perform more precisely. This involves analysis, professional judgment and expertise, and discernment.
As an example, automation of manufacturing processes may have reduced the labor force but those retained do not necessarily function as line workers anymore: they may be specialists or technicians who know how to oversee the machine’s performance or engineers who know the machine inside and out.
Economic dilemmas might also be in place. Accountants and bookkeepers perform jobs that require more skill and training as compared, say, to a factory line worker or line cook. This implies that accountants are scarcer than line workers. However, it is cheaper to automate an accountant’s job than to replace several line cooks, for example, with a machine or robot.
Conclusion
In conclusion, automation is a step towards the future of digital transformation. Some companies may need to organize their accounting departments by either adding more people to do certain functions or to downgrade the number of accounting staff and merge some tasks; in either instance, a highly viable option is to consider automating the accounting process by subscribing to an accounting system instead.
Contact us
We have been at the forefront of promoting full automation of business operations, especially for startups and SMEs. We have introduced our Cloud-based advanced solution, Kwikdroid, to make business transactions easier with us, no matter what type or size of the company. Contact us or visit our Kwikdroid page to learn more about the services we offer.
You may be interested to read about how to manage your company remotely using the advantages of Kwikdroid. Check it out!
