Automating Your Accounting Department
A Guide for Small Businesses
Why Automate Your Accounting?
1. Free Up Your Time
Manual accounting tasks—like tracking expenses, creating invoices, and reconciling accounts—can take hours. Automation tools handle these processes for you, so you can focus on what matters most: running your business.
2. Keep Costs Low
If you implement automation early, you can keep your accounting labor costs down to a minimum. Delaying this admin-only expense allows you to continue investing in the revenue generating resources of the business.
3. Reduce Errors
Human error is one of the biggest risks in manual accounting. A missed decimal or an overlooked invoice can lead to costly mistakes. Automation minimizes these risks by ensuring accuracy and consistency.
4. Gain Financial Insights
Automation tools provide real-time data, making it easier to understand your cash flow, profits, and expenses. With a few clicks, you’ll have access to reports that help you make smarter decisions.
5. Create a Closed Circuit
Your business takes inputs (time, materials, labor), applies your custom process to those inputs, and creates an output for your customers or clients. Whether you’re a consulting firm, a manufacturer, or a gas station; this basic concept reigns true.
Automating your accounting follows the same concept. When you apply a specific set of rules to your financial data, mapping them to tax forms, you can coast on autopilot and put in minimal time during the craziness of tax season.
What Can You Automate?
Banking Feeds
Through your accounting system, you can establish “bank rules” to automate expense categorizations. These can be created based on a variety of criteria. For example, if you utilize
Receipt Management
Utilize phone-based apps to capture receipts and upload to accounting software for matching.
Accounts Payable and Receivable
Automate invoicing to ensure clients are billed on time.
Set up reminders for unpaid invoices or recurring payments for vendors.
Expense Tracking
Use tools that connect to your bank accounts and credit cards to automatically categorize and track expenses.
Payroll
Streamline payroll processes with tools that calculate taxes, generate pay stubs, and handle direct deposits.
Bank Reconciliations
Automate the tedious task of matching transactions between your bank account and accounting records.
When the bank data is automated with bank rules through your accounting system, this process becomes more efficient.
Financial Reporting
Generate profit-and-loss statements, balance sheets, and cash flow reports instantly, without crunching numbers.
Tools and Technologies to Consider
1. Accounting Software
Some of the most popular tools for small businesses include:
QuickBooks Online: Comprehensive features for invoicing, payroll, and reporting.
Xero: Great for businesses needing strong integration options.
Wave: Free accounting software for small businesses with basic needs.
2. Payment Processors
Streamline payments with tools like Stripe or PayPal, which integrate seamlessly with most major accounting softwares.
Stripe: Automates payment processing, invoicing, and subscription billing with robust API integrations.
PayPal: Handles automated payment collection, recurring billing, and integration with e-commerce platforms.
Square: Offers automated point-of-sale (POS) transactions, invoicing, and payment reconciliation.
Authorize.Net: Automates payment gateway services with features like recurring payments and fraud detection.
Braintree: Provides automated payment processing for subscriptions and one-time transactions with global support.
3. Expense Management
Track and categorize expenses with tools like Expensify or Divvy, which sync with your accounting platform:
Expensify: Automates expense reporting with receipt scanning, approval workflows, and integrations.
Divvy: Combines automated expense tracking with budgeting and real-time spend controls.
Brex: Offers automated expense categorization and receipt matching for startups and growing businesses.
Ramp: Provides automated spend tracking, approval workflows, and integration with accounting tools.
Zoho Expense: Automates expense reporting, approval processes, and integrates into the Zoho ecosystem.
4. Bank Integrations
Look for software that connects to your business bank account for real-time transaction imports:
Plaid: Connects bank accounts to apps for real-time transaction syncing and financial data access.
Yodlee: Powers bank account integrations with automated transaction aggregation and categorization.
Zabo: Focused on connecting bank and crypto accounts for unified transaction tracking.
QuickBooks Bank Feeds: Automates transaction imports and categorization directly from connected bank accounts.
Xero Bank Feeds: Syncs with bank accounts to provide real-time reconciliation and automated data entry.
5. Payroll
Popular options here include:
Gusto: Simplifies payroll with automated tax filings, direct deposits, and onboarding tools.
QuickBooks Payroll: Offers automated payroll and tax calculations with seamless QuickBooks integration.
Paychex Flex: Scalable solution for automating payroll, taxes, and benefits administration.
ADP RUN: Automates payroll and compliance while providing advanced reporting and mobile access.
Rippling: Handles automated payroll for global teams with integrations for accounting and HR tools.
How to Get Started with Automation
Step 1: Evaluate Your Processes
Start by identifying repetitive, time-consuming tasks in your accounting workflow. One that plagues every business, regardless of industry, is categorizing transactions. Bank data flows through your accounting system to the
Step 2: Choose the Right Tools
Consider your budget and business needs. For example, a service-based business might prioritize invoicing tools, while an e-commerce company may need inventory tracking.
Check out our guide on accounting tech stacks for recommendations and deep dives on functionalities of popular softwares.
Step 3: Start Small
Don’t try to automate everything at once. Begin with one area—like invoicing—and gradually expand to other processes.
Step 4: Train Your Team
Make sure you and your team understand how to use the tools effectively. Most platforms offer tutorials and support to get you started.
Step 5: Monitor and Optimize
Regularly review your automated processes to ensure they’re meeting your goals. Adjust workflows or upgrade tools as needed.
Overcoming Common Challenges
Learning Curve
Adopting new tools can be intimidating. Start with user-friendly software, and take advantage of online training resources or consulting services.
Integration Issues
Not all tools work seamlessly together. Choose solutions that integrate with your existing systems to avoid headaches.
Cost Concerns
While some automation tools are free or low-cost, others can seem pricey upfront. However, the time and accuracy you gain often result in a significant return on investment. The Remote Controllers can ease your mind here by presenting a comprehensive list of costs that come with automating this function of the business.
When to Bring in Expert Help
Even with the best tools, accounting can get complicated. If you find yourself struggling to keep up, consider outsourcing to an accountant or controller. Professionals can:
Ensure your financial records are accurate and compliant.
Help you set up and optimize automation tools.
Provide strategic insights to help your business grow.
Conclusion
Automation won’t replace financial expertise, but it will give you the time and clarity to focus on your business. By automating repetitive tasks, you’ll save hours each week, reduce errors, and gain the financial insights you need to succeed.
Ready to simplify your accounting? Reach out to learn how automation can transform your finances—and your business.
