Goodbye Manual Processes - Hello Automated Accounting

1. What does automated accounting mean?
2. What is the difference between autonomous and automated accounting? 
3. These are the advantages and disadvantages of automated accounting
4. This is what you need to bear in mind with automated accounting
5. You automate your bookkeeping in 5 steps
6. This is what modern bookkeeping software should be able to do for your automated bookkeeping
7. This software is suitable for automating your bookkeeping
8. More freedom through automation

Our everyday life is facilitated in many areas by automation and apps. This will also apply to your bookkeeping in the future. No business can do without accounting. It not only regulates the transfer of the monthly salary, but also books the income and expenses, organizes the dunning process and combines the creation of annual financial statements and balance sheets. Precise work is particularly important here so as not to violate legal regulations. This not only sounds like a lot of effort, but it is in practice as well. But on the technology horizon is support coming – automated accounting. In this article, you will learn what automated accounting is, what advantages and disadvantages it offers you and what you need to pay attention to. We also tell you which functions modern accounting software should have and which tools are suitable for automated accounting. 

What does automated accounting mean?

The independent execution of recurring processes by accounting software is referred to as automated accounting. This includes, for example, the digital processing of invoices and automated dunning. Through the independent digital implementation of most accounting processes, automated accounting is also referred to as Accounting 4.0 . The software informs you when it cannot allocate items or process receipts. You also have to intervene if an unknown business transaction occurs, which your system does not yet know. Once you have defined a standard process for this, your accounting tool can once again relieve you of these tasks automatically. But how does the automation of your accounting work? This is made possible by the technology called Robotic Process Automation, in short, RPA. It refers to the takeover of recurring posting tasks by the software robot. These tasks include the execution of bookings, the synchronization of transactions, the categorization of expenses as well as the listing of social contributions and VAT. Furthermore, your automated accounting takes care of sending quotations, invoices and reminders, provides you with clear financial reporting and can prepare balance sheets for you.

What is the difference between autonomous and automated accounting? 

Maybe you have already heard the term autonomous accounting in connection with automated accounting. These two terms are often equated with each other, although there is a significant difference between them. Automated accounting is able to process standard processes independently, but requires support from accountants in the case of unknown business transactions. Autonomous programs, which are still in their infancy, will in the future be able to take over your complete accounting – without any support. They learn independently and automatically adjust their processes to new conditions. This would result in significantly lower costs for many companies. Whether this approach is actually desirable, you can decide for yourself in the near or distant future. However, keep in mind that you would still be responsible for possible errors and discrepancies in accounting before the tax office, even if you introduce autonomous accounting in your company. No software will relieve you of this responsibility, whether automated or autonomous.

These are the advantages and disadvantages of automated accounting

A software is supposed to take over your tasks in accounting? Understandably, you are probably a little skeptical about this innovation. But using an automatically operating accounting software offers you various advantages.

1. Time saving: If you have to make each booking yourself, no matter how many times you have already made it in the past, this will cost you quite a bit of time over the course of your working week. The digitization of your accounting and the automation of these processes frees up spaces, allowing you to focus on your core tasks again.
2. Cost saving: With automated accounting, you not only save time, but also money. The digital processing means less need for paper and printer ink, and also you can utilize your time for other projects and tasks to create new value for your department.
3. Accurate analyzes and evaluations: In an automated accounting system, you can use the existing information much faster. Your accounting produces up-to-date analyses and evaluations for you through standardized evaluations, which you can take into consideration in your decision-making.
4. Error minimization: The standardized processing of your business processes reduces the error rate. This increases the efficiency of your accounting.
5. Relief for staff members: With the use of an automated accounting function, monotonous tasks are eliminated - the system takes them over for you. This has a positive effect on your motivation, because you can now use your strengths more effectively and have time for other subject areas.

Despite all these advantages, you should bear in mind that automated accounting also has disadvantages for your company. This includes, for example, the fact that you need to provide intensive training for your colleagues initially, so that they can work with the new program. Not all processes will work from the start. Nevertheless, you must keep your aptitude for learning and not get discouraged. Also, automated accounting sometimes requires human support, as not every incident can be automated from the start. This is often the case with handwritten receipts or new bookings. These must then be processed manually by you at first.

Automating your own accounting can be worthwhile for both small and large companies, provided they have weighed the pros and cons against each other. 

This is what you need to bear in mind with automated accounting

Where people work, people are also responsible for the results. But how does that look with a machine? Even if a technology takes over the majority of your work, you are the one responsible for ensuring that the automated processes function correctly and that the right decisions are made from the analyses that have been created. Therefore, always remember that the tax office or your superior will always ask you what certain bookings are all about, after all, your accounting software cannot answer for you and is thus also not legally responsible for the results. This applies especially to the fact that your accounting software must adhere to the principles of proper accounting, short GoBD, otherwise problems may arise at the latest when the preparation of the annual financial statements.

You automate your bookkeeping in 5 steps

You’re convinced of the benefits of automated bookkeeping and want to tackle the project? Perfect! You proceed as follows:

1. Set a strategy: Before you start, you decide which areas of your accounting you want to automate. Also get the opinion of your affected colleagues. You must determine what is essential and what would be additional wishes.
2. Define criteria for your bookkeeping software: The purchase of bookkeeping software, such as sevdesk can take some of the repetitive tasks of your daily work off your hands. Have a list of requirements, which includes which functions are important to you and your colleagues. Should it automate your dunning and also work in preparatory accounting? Do you want to send offers digitally and create XInvoices? When you have agreed on these criteria, you can start looking for the tools that suit you.
3. Compare different tools with each other: Now it's down to the nitty-gritty. Look at different software solutions and compare them with each other. Once you've chosen the option that seems best to you, it's time to implement it. Most providers offer free trial phases during which you can get to know the software or define your own requirements so that it can be further developed individually for your business.
4. Test and implement the software: Now it's time to test, test, test. The features should be thoroughly verified, wishes and errors noted and positive remarks collected. Meet regularly with your colleagues and discuss how satisfied you are with the tool. You should then reflect this to the providers, to receive suggestions for solutions. Also, plan enough time for the intensive initial instruction, so that your colleagues can find their way around.
5. Inform your customers: Last but not least, you need to inform your customers about your use of new software. They must agree to this so that in the future you can send them your invoices in digital form.

This is what modern bookkeeping software should be able to do for your automated bookkeeping

If you want to purchase bookkeeping software, define in advance what features it should have to ensure smooth operation in your automated bookkeeping. To make defining criteria a little easier, we have compiled what modern bookkeeping software should be able to do for you:

• Creation and payment of invoices
• Archiving of invoices and receipts
• Processing of digital invoices
• Linking of your bank accounts
• Automatic control and posting of booking entries
• Continual updates to always meet all legal guidelines
• Creation of company statistics and evaluations
• Preparation of an income surplus calculation (EÜR)
• Support for balance sheet preparation
• Support in VAT declaration to the tax office
• Interface for collaboration with tax consultants

This software is suitable for automating your bookkeeping

Now that you know what features a bookkeeping software should have for you to establish automated bookkeeping with it in your company, we move on to the next step: selecting the right software. On OMR Reviews we have compiled a wide range of available bookkeeping tools. By the ratings and feedback from our users, you can identify your ideal software. During your research, you will come across the following bookkeeping software among others:

sevdesk

orgaMAX Buchhaltung

Lexware Office

DATEV

Sage 50 Connected

Zervant by Ageras

Papierkram

easybill

Candis

FastBill

WISO MeinBüro Desktop

Pathway Solutions

More freedom through automation

Technologies and artificial intelligence will always be part of our everyday life in the future. Many useful functions create free space and are already changing the world of work today. The use of bookkeeping software and automated bookkeeping combines many advantages for your working day, even if the change may initially feel a bit strange. But trust in the process. You will see: It's worth it!