We’ve heard about the potential horrors of automation, and when it comes to automated bookkeeping it can make some people, especially accountants, nervous. But should it be?
Historically, many SMEs and startups still struggle to stay afloat, even before the pandemic turns our lives upside down.
It turns out that one of the main reasons startups fail isn’t just due to lack of funds, but an inability to control funds effectively.
According to a study by the American Bank, approximately 82% of small businesses fail due to cash flow issues caused by the lack of strong accounting and bookkeeping processes.
This is due to poor inventory management, delays in paying invoices as well as improper budgeting resulting in unnecessary expenses.
Five reasons why automated accounting is ideal for small businesses
Save time, leading to higher productivity
Startups are often already made up of small teams as it is, if not a single entrepreneur, making the process of managing funds a burden in terms of time and effort, thus becoming a hindrance to productivity. With an automated accounting system, the platform or software does the work for you, so small teams can focus their efforts on what really matters: the top-level work.
More precise data
Let’s face it, humans are notorious for being error prone. But that’s okay, as the saying goes, we’re just humans. That’s why automated solutions are used – to help reduce human error.
Almost instantaneous data recovery
Decades ago, financial information was physically stored in multiple files and folders – and for some, multiple rooms. Now many have digitized – quite a bit, with Excel Sheets and maybe even Google Sheets.
But this is still a manual process as multiple sheets must exist and be stored locally or in the cloud. Retrieval is not as straightforward as an extensive search capability built into an accounting platform.
It is much more convenient to be able to access all the information through an automated accounting system with a simple user interface with advanced search features – even better if it is stored in the cloud.
Online storage and retrieval
According to Spendesk, a major burden for many companies and accounting firms is the need to keep paper records for 7-10 years. Fortunately, tax administrations around the world are slowly moving into the storage of electronic receipts – digital copies of documents instead of paper files.
Automated accounting software, however, allows you to enter a received financial document into your company’s general ledger and then automatically store the proof of purchase in an appropriate file. Each document is then accessible to you wherever you are if it has cloud storage.
Allows professional development
While this money management might be seen as a mundane but necessary part of the job for large companies with a dedicated finance department, tedious paperwork and tedious administrative processes can be an almost insurmountable challenge for SMEs.
However, modern software unlocks the full potential of finance teams, even accountants. They can now easily overcome many tedious manual tasks that they have often been forced to endure, and finance professionals can focus on managerial accounting, strategy and improving communications.
Automated accounting helps accountants, not hinders them
With accurate and up-to-date data available, accountants can be the reliable and impactful business partners their businesses need.
According to Ishi Singh, founder of Counto, a Singapore-based automated accounting start-up, “This upheaval in the accounting space is new but very close, with advancements in AI giving businesses the opportunity to reinvent a world of accounting. accounting where the role of an accountant is similar to that of a personal financial director.
Singh, a veteran with over 20 years of business, technology and accounting experience, points out that their AI-driven platform, Counto, was born out of emerging industry disruptions, where he realized the need for startups to have a strong grip on their finances in order to thrive and evolve, in an increasingly software-driven world.
Offering accounting, tax and CFO services along with insightful analytics to help companies manage and grow their businesses, Counto offers clients access to their data anytime, anywhere, without any limitation. Using AI, it helps automate manual aspects of business accounting by optimizing processes, producing accurate monthly reports, and even generating useful financial information, all at affordable prices.
As written by Eva Nagarajah for PWC, a study by the McKinsey Global Institute found that “although the digital switch-over is the new buzzword and consumers have largely gone digital, the digitization of jobs is still in its infancy, even for companies that are are at the forefront of digital spending ”.
As such, it is imperative that accountants are competent upwards to negate the risks of obsolescence. “As technology becomes more and more sophisticated and present in all aspects companies, accounting professionals can expect a shift into more strategic and analytical roles, ”said recruitment firm Randstad Singapore.
According to Toh Joo Lee, former accounting and finance director at Robert Walters Malaysia, the automation of accounting transactions is inevitable and accountants must constantly remain relevant by adding value to the business.
Competition can be tougher with fewer accounting jobs in the market over time due to automation.