What Is Accounting Automation & Will It Replace Accountants?

Accounting automation uses innovative software to automate repetitive and time-consuming accounting tasks. This technology handles data entry, invoice processing, and financial reporting, reducing manual intervention and increasing efficiency and accuracy in financial management.

Without proper accounting software, businesses face challenges like manual data entry errors and a lack of real-time insights. Inconsistent data management leads to discrepancies in financial reports, and compliance and reporting issues can result in costly penalties.

In 2024, accounting automation will significantly impact CPAs in the Philippines, with 55% favoring AI-powered automation. However, a survey shows that 96% of accountants believe automation enhances efficiency and reduces errors.

Are you still concerned about whether accounting automation could impact or take over CPA roles?

If so, read on to discover comprehensive information about accounting automation and why businesses in the Philippines need it.

What is Accounting Automation?

Accounting automation is a system for automating repetitive and routine accounting tasks. It integrates specialized software that automatically handles tasks like data collection, transaction recording, and financial report generation, thereby reducing manual intervention and increasing operational efficiency.

From old bookkeeping to today’s automated systems, significant changes have occurred. Early on, accountants used paper and performed calculations manually. Then, computers made tasks more accessible, although much work was done manually.

Now, with cloud computing, AI, and machine learning, advanced automation is available, performing complex calculations quickly and providing real-time insights.

The primary goal of accounting automation is to improve the accuracy, efficiency, and speed of financial management within a company. Businesses can focus more on data analysis and strategic decision-making by automating time-consuming and error-prone processes.

Key features of accounting automation include:

• Automatic data processing: Enables the automated collection and processing of data from various sources.
• Automated reconciliation: Automates account reconciliation processes to ensure accurate balances.
• Financial report generation: Automatically generates timely and accurate financial reports.
• Compliance monitoring: Ensures all transactions comply with relevant regulations and accounting standards.
• System integration: Integrates various financial systems and applications for seamless data flow and consistency.

Using automation in accounting is changing how businesses manage money. It brings strong features that make things more efficient and accurate.

Key Benefits of Automated Accounting Systems

Before we get into the details, let’s take a closer look at the key benefits of automated accounting systems and how they can change the way businesses manage their finances:

• Enhanced data accuracy: One of the main advantages of automated accounting systems is enhanced data accuracy. By minimizing manual input, these systems reduce the risk of human errors, ensuring that financial data is precise and reliable. This leads to more accurate reports, better decision-making, and greater overall trust in financial information.
• Quicker completion time: Automated accounting systems significantly reduce the time required to complete financial tasks. By streamlining processes such as transaction recording and report generation, these systems enable faster data processing, allowing businesses to close financial periods and make decisions more quickly.
• Comprehensive analysis: Automated accounting systems provide comprehensive analysis by consolidating financial data into detailed reports and insights. This allows businesses to gain a deeper understanding of their financial performance, identify trends, and make informed decisions based on accurate, real-time information.
• Cost reduction: Automated accounting systems contribute to cost reduction by minimizing the need for manual labor and reducing the likelihood of errors that can lead to costly mistakes. By streamlining financial processes, businesses can cut down on administrative expenses, improve efficiency, and allocate resources more effectively.
• Better security: Automated accounting systems offer better security by protecting sensitive financial data through encryption and access controls. With fewer manual interventions, the risk of data breaches or unauthorized access is significantly reduced, ensuring that financial information remains safe and compliant with regulatory standards.
• Swift data retrieval: Automated accounting systems enable swift data retrieval by organizing financial information in a centralized and easily accessible format. This allows businesses to quickly locate and access important data, saving time and improving efficiency when making financial decisions or generating reports.

Steps to Automating your Accounting Process

Here are the steps to automate your accounting process:

• Evaluate your current accounting processes and identify areas that could be improved.
• Select accounting automation software that meets your business requirements and fits within your budget.
• Choose software that offers customizable invoice templates and integrates smoothly with your ERPs, banks, and other systems.
• Appoint a project leader to oversee and manage workflows, ensuring a smooth data migration process.
• Ensure your team receives adequate training and time to familiarize themselves with the new software.
• Plan a transition period and inform all relevant staff, particularly the CFO, accountants, and finance team, about the upcoming changes.

Challenges of Manual Accounting

Despite being traditional and familiar, manual accounting system poses several significant challenges in today’s fast-paced business environment. These challenges can hinder a company’s efficiency, accuracy, and financial health.

Understanding these issues is crucial to appreciating the benefits of accounting software. Below are the challenges of using manual accounting:

1. Manual accounting processes are highly time-consuming

Manual accounting processes require significant time for data entry, reconciliation, and report generation tasks. These tasks are labor-intensive and often involve repetitive actions, which can lead to inefficiencies.

As a result, accountants may spend more time on administrative work than on strategic financial planning and analysis. Traditional accounting’s time-consuming nature can hinder the finance department’s overall productivity.

2. Manual accounting is a risk for potentially costly errors

Manual data entry increases the likelihood of human errors, which can result in inaccurate financial records. Even small mistakes can have significant consequences, such as incorrect financial statements or missed compliance deadlines.

These errors often require additional time and resources to identify and correct, leading to further inefficiencies. The potential for mistakes in traditional accounting can undermine the reliability of financial data and decision-making.

3. Manual accounting methods lack proper security

Manual accounting systems often involve handling physical documents and unprotected digital files, which unauthorized individuals can easily misplace or access. Without appropriate security measures, sensitive financial information is at risk of theft, fraud, or loss.

This lack of security can compromise the integrity of financial data and expose the company to legal and financial repercussions. Ensuring financial information safety is crucial, yet traditional methods may fail to provide adequate protection.

How does Accounting Automation Help Businesses?

Automation in accounting changes how businesses work. It makes them run better and faster. By automating financial tasks, companies get more accurate and consistent results. This means fewer mistakes and quicker, more precise financial data processing.

Automation saves money by reducing labor costs, allowing companies to invest in critical areas. It provides real-time data for better decisions and compliance, helping businesses swiftly plan and address financial issues. This enhances employee productivity and satisfaction.

Using automation in accounting means better efficiency, reliable reports, and a strong base for growing the business.

1. Helps avoid a cash flow crisis

Accounting automation monitors income and expenses in real-time, giving businesses a clear and immediate view of their cash flow. It generates accurate financial reports, helping to identify potential cash flow problems before they escalate into crises.

This proactive approach allows for timely decisions in managing cash reserves effectively. By addressing issues early, businesses can maintain financial accounting stability. Ultimately, accounting automation ensures the continuity and health of a company’s financial operations.

2. Saves time

Automating repetitive accounting tasks significantly reduces the time spent on manual data entry and reconciliation. This efficiency allows accountants to focus on more strategic financial analysis and planning activities.

Automation streamlines processes, resulting in quicker completion of accounting tasks. As a result, businesses can allocate resources more effectively and increase overall productivity.

3. Provides cloud access

Cloud-based accounting automation makes financial data accessible anytime and anywhere, enhancing flexibility and convenience. This feature is particularly beneficial for remote work and multi-location operations.

Cloud access ensures all team members have up-to-date information, facilitating better collaboration. Additionally, it supports business continuity by allowing operations to continue seamlessly during disruptions.

4. Systems are flexible

Accounting automation systems are designed to adapt to the specific needs of different businesses. They can be customized to handle various financial processes and integrate with other business systems.

This flexibility allows businesses to scale their accounting operations as they grow. It ensures that the accounting system remains relevant and effective in a dynamic business environment.

5. Provides storage and organization

Automated accounting systems offer secure and organized storage for all financial records. This eliminates the need for physical storage space and reduces the risk of losing important documents. Digital storage also makes searching for and retrieving specific records easier when needed. Organized financial data improves efficiency and supports better decision-making.

6. Offers enhanced security

Advanced security features in accounting automation systems protect sensitive financial information from unauthorized access and cyber threats. Encryption, multi-factor authentication, and regular security updates ensure data integrity.

These measures provide peace of mind, knowing that financial data is secure. Enhanced security also helps businesses comply with regulatory requirements.

7. Allows for fast retrieval of data

Automated systems enable quick and easy retrieval of financial data, saving time and effort. With powerful search functions, users can access specific records or generate reports in seconds. This speed is crucial during audits or financial reviews. Fast data retrieval enhances productivity and supports timely decision-making.

8. Provides comprehensive analytics

Accounting automation tools offer in-depth analytics and reporting capabilities. These insights help businesses understand financial performance, identify trends, and make informed decisions.

Comprehensive analytics support strategic planning and improve financial forecasting. Businesses can leverage data-driven insights to enhance their competitive advantage.

9. Prepares records for tax deductions

Automated accounting systems streamline the preparation of tax records, ensuring all eligible deductions are captured. This accuracy reduces the risk of errors and penalties during tax filing. Automated tax preparation also saves time and effort compared to manual processes. Businesses can maximize their tax savings and maintain compliance with tax regulations.

10. Allows for professional development

By automating routine accounting tasks, businesses can provide accountants with opportunities for professional growth. Accountants can focus on higher-level financial analysis, advisory services, and strategic planning.

This shift enhances job satisfaction and skill development. Investing in professional development ultimately benefits the business by leveraging a more skilled and motivated workforce.

Will Accounting Automation Replace CPA (Certified Public Accountant)?

Automation is changing the game, making us rethink the future of CPAs. While some wonder if AI will make CPAs unnecessary, it’s clear that CPAs offer deep insights, strategic advice, and personalized help that AI cannot provide. Automation modernizes the traditional role of CPAs, allowing them to focus on high-level tasks and make more strategic decisions.

AI can handle tasks like data entry and report generation, reducing errors and freeing up CPA time. This enables CPAs to create strategies, provide financial advice, and work on budgets to help increase business profits. Finally, this automation allows CPAs to focus on essential roles.

Viewing automation as a threat is a misconception. Instead, it’s an opportunity for CPAs to enhance their roles and contribute more strategically. Accounting automation software improves CPAs’ efficiency by enabling faster and more accurate data analysis, leading to better decision-making and improved company performance.

The table below shows how CPAs and automation work together:

AI in accounting means CPAs will change, not disappear. By using these tools, CPAs can do more for their clients. The real value of automation is in making CPAs better at what they do.

How to Get Started with Automated Accounting?

Automated accounting is revolutionizing the way businesses manage their finances, offering greater accuracy and efficiency. If you’re considering making the shift, it’s essential to understand the key steps involved in getting started.

Here’s a simple guide to help you transition smoothly to automated accounting.

1. Automating the accounts payable process

Start by implementing software that can automatically capture and process invoices. This system should match invoices with purchase orders, approve payments, and schedule them, reducing manual entry and errors.

By automating accounts payable, businesses can improve cash flow management, ensure timely payments, and enhance overall efficiency.

With accounting automation offered by HashMicro, invoices can be processed swiftly and efficiently through the accounts payable department. Any issues that arise are quickly identified, allowing accountants to address them promptly.

2. Audit documentation

Conventional audit documentation has several problems, such as difficulty accessing specific invoices and protecting sensitive information. Business owners often need to provide a year’s worth of records, which can be cumbersome and risky.

Companies prefer to track who accesses these records and when. Therefore, using intuitive software for audit documentation should be a priority, as poor record-keeping is not an option in business.

3. Procurement integration

Procurement involves translating business needs into necessary supplies and services orders and managing supplier relationships. Digitizing the extensive documentation involved can help companies become more organized and efficient.

By integrating with procurement software, companies can automate order approvals, track delivery statuses, and manage vendor relationships. Thus, you can achieve better control over their purchasing activities, reduce costs, and improve accuracy in inventory management.

With accounting automation, many tasks become much more manageable, such as:

• Requesting and managing documents: Simplifies the process of handling quotation files, inspection sheets, and approval documents.
• Preparing various business records: Streamlines the preparation of shipment receipts, freight bills, manufacturing records, invoices, and supplier data.
• Forecasting and research: Helps accurately forecast regulatory sheets, product research documents, and supplier details.
• Documenting inspections and workflows: Ensures efficient documentation of inspection reports, defect resolution workflows, and testing reports.
• Managing orders and contracts: Facilitates creating and managing purchase orders, contracts, and estimates.

These processes involve a lot of paperwork and various systems to ensure accuracy. By automating these tasks, companies can reduce the documentation burden and allow their accountants to focus on more critical business activities.

What to Look for in Accounting Software?

Choosing the right accounting tools is key for your business. The software should integrate smoothly with other business systems like ERP or CRM platforms, ensuring seamless data sharing and operations. Additionally, it’s essential to pick software that complies with Philippine financial laws to protect your business from legal issues.

Below are some things to consider when choosing the right accounting software for your business:

1. Core accounting modules

Essential accounting software should include core modules such as general ledger, accounts payable, accounts receivable, and payroll. These modules ensure comprehensive financial management and accurate record-keeping.

Integration between these modules is essential for smooth data flow and financial operations that will facilitate robust reporting and analysis. The ability of these modules to be customised to specific business needs can enhance their usability.

In addition, ensure that the software supports compliance with relevant accounting standards and regulations. If you want to learn more about accounting systems, you can read this article.

Below are some of the most practical features that business owners should look for in an accounting system:

• Invoicing capabilities
• Time tracking
• Expense tracking
• Automated financial reports
• Daily dashboard
• Customer support service
• Mobile application

An excellent accounting software company often offers a free trial of its program. Platforms like HashMicro allow users to schedule a demo, demonstrating how their system can help automate payables processes.

2. Automation

Effective accounting software should automate repetitive tasks such as data entry, invoice processing, and reconciliation. Automation reduces the risk of human errors and saves valuable time for accountants.

It allows for timely and accurate financial reporting, enhancing decision-making capabilities. Look for software with intelligent automation features that adapt to your business processes.

Automation should also extend to compliance and regulatory reporting, ensuring accuracy and timeliness. The ability to automate workflows and approvals can further streamline financial operations.

3. Business Intelligence

Accounting software should provide business intelligence (BI) capabilities to help analyze financial data and generate insights. BI tools enable businesses to identify trends, forecast financial performance, and make informed decisions.

Look for software that offers customizable dashboards and real-time analytics. Integrating BI with accounting modules allows for deeper insights into financial health and operational efficiency.

Advanced BI features such as predictive analytics can give businesses a competitive edge. Ensure the software can handle large volumes of data and provide insights in a user-friendly format.

4. Cloud access and capabilities

Cloud-based accounting software offers flexibility and accessibility from anywhere with an internet connection. This is particularly useful for businesses with remote or multi-location operations.

Cloud capabilities ensure that financial data is always up-to-date and accessible to authorized users. Look for software that provides secure cloud storage and robust data encryption. Cloud solutions should also offer automatic updates and backups to ensure data integrity.

The ability to integrate with other cloud-based applications can enhance overall business efficiency.

5. Multi-user access

Accounting software should support multi-user access, allowing multiple team members to work simultaneously. This feature is essential for collaborative financial management and ensures all users can access the most current data.

Look for software that offers customizable user roles and permissions to maintain data security. Multi-user access should also include audit trails to track changes and ensure accountability. Restricting access to sensitive information is crucial for maintaining data privacy. User-friendly interfaces and training resources can enhance the usability of multi-user systems.

6. Ability to scale

As businesses grow, their accounting needs become more complex, requiring scalable software solutions. Look for accounting software that can handle increased transaction volumes and additional users without compromising performance.

Scalability should also include adding new modules and features as needed. Ensure the software can integrate with other business systems to support expanding operations. The software’s cost structure should be flexible to accommodate growth without excessive expense. Finally, check for vendor support and resources to assist with scaling the software.

7. Proven track record

Choose accounting software from a vendor with a proven reliability and customer satisfaction track record: research customer reviews and testimonials to gauge the software’s performance in real-world scenarios.

Look for vendors with a history of continuous improvement and updates to their software. A proven track record indicates that the software will likely be stable, secure, and supported by the vendor. Ensure the vendor offers robust customer support and training resources. Finally, consider the vendor’s experience in your specific industry or business size.

HashMicro’s Accounting Software Provides an All-in-One Solution to Automate Company Finances

HashMicro is recognized as one of the best ERP software providers in the Philippines. This vendor has successfully helped businesses of all sizes achieve accounting automation, enhance their financial management processes, and improve overall efficiency.

If you want to automate your financial management, try HashMicro’s system for free. This trusted vendor offers a free trial to experience the benefits of accounting automation firsthand.

HashMicro’s Accounting Solution comes with a variety of features, such as:

• Bank Integration – Auto Reconciliation: This feature ensures that internal bookkeeping balances match the bank’s recorded balances, enhancing accuracy and consistency.
• Multi-level Analytical: This feature allows businesses to gain real-time insights and trends from all financial transactions, filtering by categories such as projects or branches.
• Profit & Loss vs Budget & Forecast: This feature delivers reports highlighting deviations between estimated and actual profit and loss based on set budget values.
• Cash Flow Reports: This feature allows companies to monitor cash inflows and outflows to ensure sufficient liquidity, enabling precise financial planning and early identification of potential financial issues.
• Forecast Budget: This feature allows businesses to predict future budgets based on historical data, aiding in efficient resource allocation and better strategic decision-making.
• Budget S Curve: This feature visually tracks and understands expenditure distribution within projects, enabling faster and more accurate budget management decisions.
• Financial Ratio Analysis: This feature helps quickly and accurately analyze the company’s financial health and performance, supporting informed strategic decisions.
• Financial Statement with Budget Comparison: This feature allows businesses to clearly see how actual financial performance aligns with planned targets, helping them identify deviations and make necessary adjustments to achieve financial goals.
• Custom Printout for Invoices: This feature simplifies invoice printing for various needs with customizable formats, enhancing business branding and leaving a positive impression on customers.

In addition to offering a wide range of features, HashMicro also supports businesses by integrating various modules for comprehensive business process automation. It can seamlessly connect with third-party systems and customize features to meet specific business needs, making HashMicro a versatile and powerful solution for automating company finances.

Conclusion

Transitioning from manual to automated accounting systems offers numerous benefits, including increased efficiency, reduced errors, and better compliance. Embracing these technologies can transform your financial operations, making them more streamlined and effective.

One of the best accounting automation software solutions in the Philippines is HashMicro. HashMicro’s Accounting Software offers comprehensive features to simplify and enhance your accounting processes. Its user-friendly interface ensures that even those with limited technical skills can use it effectively.

With real-time data access, advanced reporting capabilities, and seamless integration with other business systems, HashMicro stands out as a reliable and robust solution. Additionally, it ensures full compliance with local regulations, making it an ideal choice for businesses in the Philippines.

If you want to explore how HashMicro can benefit your business, try the trial system and consultation with the professional team. This trial will allow you to experience firsthand how the software can streamline your accounting processes and determine if it fits your needs.