How Automated Accounting Can Streamline Your Business

January 13, 2023
Someone using a calculator

Automated accounting software is a computer program that helps businesses and individuals manage their financial transactions and processes more efficiently. It can handle various tasks, such as generating invoices, recording transactions, tracking expenses, and producing financial reports. 

Businesses of all sizes, from small startups to major corporations, can employ automated accounting software tailored to the organization's unique requirements. Read on to learn more about automated accounting software and how it can impact your company.

What Is Automated Accounting?

Automated accounting is the practice of automating and streamlining financial operations like invoicing, transaction recording, expense monitoring, and financial reporting through computer software. Overall, automated accounting aims to help businesses save time and resources by automating financial tasks and providing tools to help them make informed financial decisions.

Advantages of Automated Accounting Software

Automated accounting software can provide several benefits to businesses, including the following.

Saves Time

Automated accounting software can save businesses time by automating many tasks that you would otherwise perform manually. The system can automatically perform calculations, generate financial reports quickly, and accurately track expenses. 

Overall, businesses will save time that would otherwise be performed manually, allowing them to focus on more strategic tasks and decision-making.

Faster Data Retrieval

With automated accounting software, data entry is typically faster. Automated accounting software organizes and consistently structures data, making it an easier accounting method to find and retrieve specific information.

Search and filter functions within accounting software programs allow faster data retrieval. You can often integrate automated accounting software with other systems, such as point-of-sale, inventory management, and CRM systems, which can further facilitate data retrieval.

Improves Data Accuracy

Automated accounting software can eliminate the need for manual data entry, which reduces the risk of errors that can occur due to typos, transposition, or other mistakes. This software includes built-in data validation checks that help ensure the accuracy and completeness of data entered into the system.  Additionally, accounting software typically updates data in real time, so users can access the most up-to-date information at any time, which helps ensure that the data is accurate.

Enhance Compliance Across Crucial Business Processes

Automated accounting software enhances compliance across critical business operations, assisting organizations in operating more effectively and meeting regulatory requirements. The software often includes features that facilitate auditing and reporting, helping businesses to meet regulatory requirements for financial reporting and compliance.

Disadvantages of Automated Accounting Software

However, automated accounting software does not only come with advantages.

Lack of Trained Professionals and Difficulty in Maintenance

While automated accounting software can significantly improve efficiency and accuracy, it can be difficult to find trained professionals knowledgeable about the software being used. Also, it can be challenging for small businesses that may not have the resources to invest in training.

Accounting Tasks That You Can Automate

Let’s look at some of the accounting tasks that you can automate.

Invoicing and Billing

Automated invoicing and billing software can streamline creating and sending invoices to customers. It can include features such as customizable templates that allow users to create professional-looking invoices with their branding and design elements. 

Automated invoicing and billing software can also automatically calculate tons of important information. These include taxes, discounts, and shipping charges, saving users time and reducing the risk of errors.

Cash Flow Forecasting

Automated cash flow forecasting software can help businesses predict future cash inflows and outflows. A computerized cash flow forecasting software offers features such as a sensitivity analysis which helps companies understand how changes in certain variables might impact cash flow.

How To Switch to an Automated System

Research available automated systems and consider which one might be the best fit for your business. Once you have identified an automated system you would like to implement, create a plan for transitioning to the new system. It should include a timeline, a budget, and a list of key stakeholders involved in the process.

Before fully implementing the automated system, test and evaluate it to ensure that it meets your needs and is easy to use. You should ensure that all employees using the automated system are adequately trained on how to use it.

Once you fully implement the automated system, you will need to migrate any existing data from your current system to the new one.

Streamline Accounting With Lunafi | How It Works

Rules

The Lunafi app helps automate accounting by allowing users to create rules for classifying transactions. By creating these rules, transactions with similar names or characteristics can be automatically classified into the appropriate category, such as "Business Expense" or "Personal Expense."

For example, if you frequently use Uber for business purposes, you can create a rule in the Lunafi app that automatically classifies all transactions with "Uber" in the name as a "Business Expense." This means that any new Uber transactions that appear in your account will be automatically classified as a business expense, without the need for manual intervention. This can save a significant amount of time and effort, as you will no longer need to manually enter these transactions.

This feature is particularly useful for small businesses and self-employed individuals, as it can help them stay organized and keep track of their expenses with minimal effort. Additionally, by having accurate financial data, it's easier for them to plan budget, take important financial decisions and for tax purposes. Furthermore, Lunafi’s algorithms will keep learning and creating new rules from your transaction data over time, making it even more accurate and efficient.

Invoicing

Lunafi.co helps automate accounting by allowing users to set payment reminders for invoices. This feature can be particularly useful for small businesses and self-employed individuals, as it can help them ensure that they receive timely payment for their services or products.

When you create an invoice on the platform, you can set the payment due date and schedule automatic payment reminders to be sent to your client on selected dates. For example, you can set a reminder to be sent one week before the due date, and another reminder to be sent on the due date. This can help remind your clients that the invoice is coming due, and ensure that they are aware of the payment terms.

We know that transitioning to an automated system can be a complex process that needs careful organization and planning, but thankfully there’s a solution to make it easier for you. Contact us today to learn more!

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