How to Automate Accounting with Cloud Accounting

Technology’s various forms and tools are intended to simplify and speed up human effort. Technology can make a big difference for a small business with limited staff. Cloud accounting is one such tool. In this fast-paced age where the world has grown smaller and companies are spread across the globe, the traditional physical or even desktop bookkeeping and accounting methods are sorely outdated. Now, small businesses need to be swift in grabbing any opportunities that come their way, and cloud accounting makes this possible by enhancing the efficiency of your business manifold through automation.

While many entrepreneurs would argue that not all bookkeeping and accounting tasks can be automated, there are some essential things cloud accounting can take off quickly, freeing up more time for other necessary business duties.

Which Tasks Can Be Automated with Cloud Accounting?

1. Accounts Receivable/Accounts Payable: Frustrating as it might be, keeping track of payments due from customers and payments to be made to vendors is vital for maintaining a healthy cash flow for your business. This is one job that needs constant follow-ups and reminders. Cloud accounting enables you to automate sending invoices, bills, and reminders and executing payments to regular vendors at predetermined dates until the dues are cleared, easing your burden of remembering so many details and dates.
2. Expense Reports and Payrolls: Expense reports are essential for a small business, as every cent spent or saved can change your growth trajectory. However, collating these lengthy and error-prone reports takes up much of your employees’ time, which they could have better spent on expansion and growth activities. Instead, automated accounting can halve this time by allowing employees to digitally fill out expense templates and upload them to the company cloud for approval. You don’t need to print out spreadsheets and attach piles of receipts. Click a picture of the receipt or bill, and cloud accounting will do the rest. The same goes for paying employees – automation can ensure all your employees receive their hard-earned salaries without delay and with the necessary payroll forms filed digitally.
3. Reconciliation: Cross-checking your business’s books of accounts and other financial records against bank statements every month to ensure all transactions are duly accounted for is tedious and prone to overlooks and misses. Any mistakes in reconciliation could mean your accounts are not balanced and even an impending audit. How can you avoid it? Automate it. Cloud accounting can compare and reconcile all your financial records and account statements. Any gaps can be identified and rectified on time instead of hunting for them during the hectic tax season.
4. Forecasting: With all your business data on the cloud, identifying patterns and trends in sales, volumes, or any parameter can be done quickly. Most cloud accounting software for businesses also helps predict future trends by analyzing the varied financial data entered, helping you make an informed decision on any growth plans.

Automating these routine but valuable processes saves time, effort, and even costs (of stationery and storage space for the files or hard drives). But the question arises: how do you go about automating your business?

Automate Accounting in Your Business in Three Steps

1. Determining the Correct Software: To understand which cloud accounting software is best suited to your business needs, you need to identify which processes you need to automate. Automation works best for time-consuming, recurring responsibilities, with maximum scope for human errors. Based on your selection, you can ask an accounting expert for guidance on which software would be the most efficient for your small business, both workwise and cost-wise.
2. Educating Employees: Once you switch to cloud accounting, your employees will also need to be trained on how to use the software to upload documents and figures, share files securely, create reports, and take backups to make optimal use of the features of cloud accounting software.
3. Monitoring Regularly: One of the most significant advantages of cloud accounting is that it can be upgraded as and when your business starts scaling. Instead of investing in new and advanced accounting software or systems as your business volumes grow, you can upgrade to an advanced plan of your cloud accounting software, thus saving you the extra burden or re-training your staff and re-establishing compatibility with other in-house technologies if any.

How Automating Accounting Can Help  

Here’s a simple example of how automated cloud accounting can help:

Imagine starting as a small shop selling day-to-day utility products in your neighbourhood. You would predominantly be dealing in cash for the low-priced products you stock in the shop. As you expand into more products – kitchenware, apparel, electrical equipment – you will have to shift from only cash to receiving payments with cards and online wallets. All these sales need to be recorded and filed separately for tax purposes. Imagine having to go through each receipt and manually entering it into spreadsheets. It is time-consuming and prone to data entry errors.  

Once installed and connected to your prevalent system, cloud accounting can do it all by itself. At the end of each day and month, your sales will be sorted by product, time of purchase, place of purchase (once you begin expanding), payment mode, amount, and any other parameter you wish to apply without manually entering a single number. Quick, easy, and with minimum scope for error, that’s cloud accounting for you!

Of course, there are limits to the powers of cloud accounting; it is, after all, a tool that can enhance the efficiency of your business operations. For advanced accounting advice and solutions, you would still need the expertise of a professional accountant. But considering scalability, affordability, security, and adaptability, switching to cloud accounting and automation right now when your business is still young could be a game-changer.

Contact KSSP Partners LLP in Markham to Help You Automate Accounting Tasks  

Talk to a professional accountant to help you automate some of the processes and generate daily, weekly, and monthly reports. At KSSP Partners LLP, our accountants can provide services such as setting up accounting processes, automating recurring tasks, preparing account statements, and filing taxes. To learn more about how KSSP Partners LLP can provide you with the best accounting and bookkeeping expertise, contact us online or by telephone at 289-554-5997.