Quick Wins: Easy Accounting Automations with High ROI

Imagine reclaiming hours of your day by eliminating the repetitive tasks that bog down your accounting practice. With the right automation tools, you can seamlessly integrate data, digitise documents, and ensure accuracy without lifting a finger.

This guide will explore the (relatively) easy-to-implement automation that can transform your practice:

• Automated Data Entry: Extract the details of both electronic and paper records with ease

• Cloud-Based Accounting Software: Cut costs, expand capacity, and open the door to a range of other powerful automations

• Bank Feed Integration: Providing real-time financial insights and reducing manual reconciliation.

• Invoice Processing Automation: Streamlining accounts payable and slash hours spent each week.

• Expense Management Automation: Simplifying reimbursements, enhancing control, and gaining visibility over transactions.

• Payroll Automation: More than just automating the pay run, simplify onboarding, pensions, deductions, and bonuses

• Client Communication Automation: Improving relationships and productivity faster

  
  

If you’re considering automation but aren’t sure where to start, this guide will provide practical insights to help you make the leap.

Automated Data Entry: The Cornerstone of Efficiency

Data entry is a basic yet crucial part of bookkeeping. Despite its time-consuming and error-prone nature, 63% of accountants still rely on manual data entry.

Automation offers a simple and highly effective solution.

When data arrives electronically, such as via email, automation can seamlessly integrate it into your bookkeeping system. Paper-based documents, like invoices and receipts, can be digitised using optical character recognition (OCR) technology.

Given the structured nature of financial documents, which focus on specific key details, OCR technology typically achieves an accuracy rate of 99.96% to 99.99% — higher than the human accuracy range of 96% to 99%.

Moreover, the double-entry system in bookkeeping naturally flags any discrepancies, even those in the small margin of error.

A major advantage of automation is its ability to decentralise tasks like scanning paper receipts. For instance, Xero offers an app enabling staff to scan their own receipts, making the process even more efficient.

Cloud-Based Accounting Software: Unlocking Accessibility and Collaboration

If your practice hasn’t yet embraced cloud-based accounting, you’re missing out on significant benefits.

Switching to cloud accounting can cut operating costs by as much as 50%, while enhancing your responsiveness and competitiveness. Accounting firms that have fully adopted cloud accounting report 15% year-over-year revenue growth and gain five times more clients than those without it.

Despite these advantages, as of December 2023, only 59% of accountants have made the switch. The primary barrier? The transition process.

Firstly, staff need training on the new system. Achieving Xero advisor certification, for example, takes between 3 to 8 hours, depending on your prior experience.

Secondly, existing accounts must be transferred. If you time this with each client’s year-end, it’s simply a matter of importing the starting trial balances.

Finally, the more significant challenge is adapting your internal processes to fully leverage the new features, such as having clients submit receipts electronically via a mobile app.

Our advice? Focus initially on transitioning accounts at client year-ends, then gradually introduce new processes, rolling them out across all clients simultaneously.

Cloud-based accounting typically follows a subscription model, with costs ranging from £15 to £200 per user per month, depending on the features. For instance, bookkeepers may cost around £15 per month, while most accounting staff will require a £30 monthly subscription, allowing them to perform analysis, generate reports, and submit information to HMRC.

A few specialists might need a £55 subscription, enabling them to delegate tasks to junior staff.

The financial benefits of cloud-based accounting quickly add up. You can eliminate the need for on-premises servers, significantly easing the burden of system upgrades, virus protection, and data security.

Advanced Features of Cloud-Based Accounting

The following automations are available to firms with on-premises platforms, but their implementation becomes much simpler after migrating to a cloud-based accounting package.

Bank Feed Integration: Real-Time Financial Insights

Integrating bank feeds directly into your accounting software can cut manual data entry by 80% and save up to eight hours per client per month on transaction reconciliation.

More crucially, it provides real-time insights into your financial standing, enhancing cash flow management and decision-making.

Setting up the bank feed is straightforward, and once you're on a cloud-based system, your reconciliation process remains largely unchanged.

Invoice Processing Automation: Streamlining Accounts Payable

Automating invoice processing can dramatically reduce the time and effort required to manage accounts payable. End-to-end solutions like Bill.com automatically process incoming emails, capture and code details, and route invoices to the right people for approval. Once approved, payments can be scheduled with no further human intervention.

Bare Bones, a 5-person soup broth company, cut its invoice processing time from 30 man-hours per week to just five. Despite such impressive savings, only 9% of Accounts Payable departments are fully automated.

Expense Management Automation: Simplifying Reimbursements

Although expense management was mentioned earlier, it warrants its own discussion.

Expense management software captures transactions from both company and personal cards. Some providers even offer virtual cards, allowing you to control online payments and ATM withdrawals on a card-by-card basis.

Transactions are coded at the point of collection, and rules can be enforced in real-time, with violations flagged immediately. Some apps also use mobile phone GPS to track and record mileage for reimbursement.

WebExpenses.com claims their software can save three hours per expense claim across all participants involved in the process.

Payroll Automation: Enhancing Accuracy and Compliance

For most businesses and accounting firms, payroll processes — including running payroll, sending pay stubs, making bank transfers, and notifying HMRC — are already automated. However, payroll involves many additional components, such as timesheets, pay changes, bonuses, new hires, leavers, pension enrolments, and deductions.

Significant efficiency gains are realised when these auxiliary processes are also automated and integrated into the payroll stream. It's common to see payroll processing costs reduced by 80% through automation, while also minimising the risk of costly errors or penalties.

Client Communication Automation: Strengthening Relationships

Automating client communications, such as email processing, enhances responsiveness and ensures consistent follow-up. Tools like Karbon or Liscio offer features like automated reminders, document requests, and task tracking, which can improve client relationships while reducing administrative burdens.

For example, TMS Tax, Accounting and Financial Services, an Australian accounting firm with nine employees, increased productivity by 40% by automating client communications. Similarly, GSA, an eight-person practice in California, saved each team member 10 hours every week.

Conclusion

Incorporating these accounting automations into your practice isn't just about saving time; it's about transforming how you operate, enabling you to focus on more strategic tasks. From automating data entry and streamlining payroll to leveraging cloud-based systems for real-time financial insights, these quick wins are accessible and offer high ROI.

If you’re ready to take your accounting practice to the next level, now is the time to act. By embracing these technologies, you can significantly reduce manual effort, minimise errors, and enhance your service offerings.

Take action today — automate these tasks and watch your efficiency soar. If you want to discuss how these automations can be tailored to your specific needs, contact us now to explore the best solutions for your practice.

By Eric Feltin

Patent holder, multi-startup founder, and non-executive director (NED), Eric loves building things. His current passion is automation in the accounting industry. He is founder of Claridian, a company transforming small accounting firms with tailored automation. Boosting productivity. Increasing accuracy and consistency. Freeing up time to focus on strategic client work.