Accounting Automation

How Can Accounting Software Automate Financial Processes?

Introduction 

In the fast-paced world of e-commerce, efficiency is the key to maintaining a competitive edge. Automating your accounting processes is one of the most effective ways to save time and streamline your operations. Utilising cutting-edge accounting software can help you cut down on manual labour, minimise mistakes, and provide real-time financial insights for your company.

Benefits of Automation

In today’s dynamic e-commerce landscape, efficient financial management is key to driving growth and profitability. Accounting software like Xero can transform your financial processes, saving valuable time and enhancing the accuracy of your data, all while staying focused on scaling your business. Let us explore the key areas that you can automate today to significantly boost the speed and accuracy of your accounting processes.

1. Streamline Bill Processing - Processing bills by hand can be time-consuming and prone to mistakes; however, automation can make this process run smoothly.

 Leverage OCR Technology - Optical Character Recognition (OCR) is one of the main technologies for automating the processing of bills. By instantly capturing bill information from PDFs or photos, OCR removes the need for human data entry. With the use of this technology, your papers' text is read, vital information such as invoice numbers, dates, and amounts are extracted, and your accounting software is automatically updated with the information. This considerably lowers the possibility of human error in addition to saving time.

OCR Tools to Automate Bill Processing:

Xero's Email to Bill function lets you email bills straight to your Xero account. After gathering the necessary data, the system generates a bill in Xero that is prepared for your approval. It's an easy method to process and organise your bills automatically, without the need for human participation.

Hubdoc is another effective program that streamlines data entry and document gathering. Bills, receipts, and bank statements are automatically retrieved from your accounts, and it interacts effortlessly with Xero and other accounting platforms.

DEXT (formerly Receipt Bank) makes bill processing easier by enabling you to scan and submit invoices and receipts via email or a mobile app. The required data is extracted by the tool's OCR technology and sent to your accounting program. Businesses who handle a lot of transactions will find DEXT especially helpful since it provides a quick and effective approach to handling multi line invoices.

2. Integrating Sales Platform - Connecting systems like BigCommerce and Shopify to your accounting software allows you to automate sales data, minimise manual labour, and maintain precise financial records. Let's examine how these integrations, along with the technologies that enable them, might optimise your sales operations.

Why integrate? 

Every transaction is immediately documented in your financial system when your accounting software and sales platforms are integrated. This lowers the possibility of errors that could arise from human data entering in addition to saving time. Real-time data synchronisation gives you quick access to information about your cash flow, inventory levels, and sales success, enabling you to act quickly and decisively.

Recommended Integration Tools

To make these integrations seamless, tools like A2X and Zapier are invaluable:

A2X is specifically created for e-commerce companies, it imports and categorises sales data into your accounting software automatically from sites like Shopify, Amazon, and BigCommerce. It makes managing your accounts easier by streamlining reconciliation and guaranteeing that your financial records correspond with your sales transactions.

Zapier connects several platforms and apps with customised workflow solutions. You can automate tasks like sending notifications, adjusting inventory levels, and transferring sales data from Shopify to your accounting software by setting up Zaps. It's a versatile tool that you can modify to meet the particular requirements of your company.

3. Automating Bank Feeds - You may streamline the reconciliation process and ensure real-time updates by integrating your bank and accounting software directly. Let's examine the advantages of automated bank feeds and how they support efficient discrepancy management.

The importance of Bank Feeds

You can save time and reduce errors by using automated bank feeds instead of human entry. You always have an accurate and current view of your accounts because every transaction is immediately logged.

The need for regular Bank Reconciliation

Bank reconciliations on a regular basis are essential, even with automated feeds. This procedure makes sure that your bank statements and records match, enabling you to rapidly identify and address any differences.

Managing Discrepancies

When differences appear, resolve them right away. Make use of the features in your accounting software to find and fix problems such as mislabeled transactions or missing receipts. Your financial records remain accurate and dependable with regular reconciliations and fast repairs. Let’s take Xero for example. Xero has one useful feature for managing these types of issues.

You can upload or email files directly from within the file library using Xero's Files Inbox folder. These files can then be added to Xero emails, items, and transactions. Files that are associated with a transaction or item will be removed from the Files Inbox, therefore it should only be used as a temporary storage area. You can move a file from the Inbox to another folder in the file library if you wish to store it there permanently. 

How to use Xero’s Files Inbox to Manage Discrepancies

1. Identify the discrepancy - Find the source of the disparity, whether it be a duplicate entry, a missing transaction, or an inaccurate value, when you see it in your bank feed.

2. Gather supporting documents - Find the relevant records that can provide light on the disparity, such as bank statements, invoices, and receipts.

3. Email documents to Xero’s File Inbox 

You can send these papers straight to your Files inbox by using the special email address that Xero gives you.

You can quickly link the document to the appropriate transaction or record in Xero once it's there, giving you all the information you need to reconcile the disparity.

 4. Resolve the discrepancy - You can now rectify the transaction or reconcile the account by following the relevant steps with the supporting documentation included in Xero.

Conclusion 

Automation is not only a convenience in the dynamic world of e-commerce, but it is also essential to maintaining efficiency and competitiveness. You may greatly improve the precision and efficiency of your financial administration by automating bill processing, integrating sales platforms, and optimising bank feeds. These automation tools give you real-time insights that are essential for making well-informed decisions, saving you time and reducing errors. Start automating today  to change the way you handle your accounts and free up time to concentrate on what really counts—growing your profits.