The combination of COVID and, ongoing supply chain disruptions, have challenged businesses and caused many to foresee a slowed economy.
Under such circumstances, business owners and managers have focused on cost savings and margin growth as they prepare. Although cloud accounting and accounting automation may not seem a priority, the company should include it in these preparations. Research shows that companies that cut costs and improved productivity during past downturns achieved better returns on equity or investment than those that didn’t.
Automating manual accounting tasks with cloud accounting tools has many benefits: greater productivity, better use of resources, lower overhead and more. These results are far-ranging and pay off for businesses in several ways, including:
Manual processes are, by their nature, inefficient, taking longer and requiring more resources to complete than when automated. Tasks like entering vendor bills, creating invoices and processing customer payments are also labour-intensive, especially when dealing with hundreds of transactions.
These sorts of mundane, highly repetitive processes are ideal targets for automation. Rather than entering transactions manually, for instance, they can be created automatically from scanned documents or, in the case of recurring transactions, on a predefined schedule. These efficiency gains free up time, allowing team members to focus on higher-value activities like analysing data and providing strategic insights that improve company performance and reveal ways to lower costs and work more efficiently.
Lower labour costs
With fewer students graduating with accounting degrees, filling entry-level positions has become difficult. The funnel of experienced job candidates has reduced as a result, and with large organisations offering better salaries, turnover has also become a problem. Attracting and retaining qualified accounting staff is a real challenge for midsize and emerging businesses.
Cloud accounting automation helps in a couple of ways. Because it increases efficiency, fewer people are needed, so losing a single staff member has less impact on productivity than in companies that lack automation. Automation can also ease workloads, reducing stress and freeing time for less mundane tasks, which aid employee retention. And should the business grow despite the economic downturn, accounting departments that are sufficiently automated may be able to hold off on hiring new personnel, preventing labour costs from rising.
Better data quality
It’s no secret that manual data entry is a common source of accounting errors. A simple slip-up can throw off account balances and affect the accuracy of financial statements. Relying on spreadsheets to keep track of depreciation, allocate expenses or perform other everyday accounting tasks increases the risk of errors.
As the use of data for decision-making and strategy increases, avoiding errors has become more critical. The finance department is often seen as the primary keeper of company data, responsible for ensuring the accuracy and completeness of financial records and operational and statistical data. Automation improves data quality by reducing the need for spreadsheets and manual entry.
Companies with poor financial controls are more likely to be taken advantage of than those with effective ones. Invoice fraud, including overcharging, sending duplicate invoices and billing for goods or services that weren’t provided, is one of the common ways businesses are victimised.
Automating accounts payable minimises the risk of fraud by automatically comparing invoice details to purchase orders and receiving documents to ensure pricing, unit quantity and totals match. This three-way matching can simplify accounts payable processes by automatically scheduling approved invoices for payment while flagging anomalies for further investigation by AP staff.
Without adding headcount, CFOs are responsible for leading their teams to improve productivity as a whole. It isn't easy to have manual data entry and spreadsheet-based processes to achieve it. With NOVA's cloud accounting solutions and different partnership, we help our customers to overcome these limitations with top-tier cloud accounting solutions that increase productivity and improve data quality and accuracy with accounting automation.
Here are a few examples of how our cloud accounting solutions can automate accounting workflows:
Reporting / Account Closing
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