From the time the word “automation” started making the rounds in the business world, it had been somewhat divisive. People were naturally wary of it and the fear of losing their jobs to “machines” because of automation became an ever present fear.
However, as more processes became automated, businesses saw the positive impact automation can bring to a business. And the possibility of losing one’s job to automation did not come to pass the way people expected it to. Yes, some jobs have been made redundant, but automation also created new job opportunities and new fields of study.
Automation has infiltrated nearly all facets of running a business. It is especially helpful when it comes to accounting.
Accounting and automation
Automation in accounting is not exactly a new thing. In the late 1800s, William Burroughs created an adding machine. The machine did not have any form of memory but it cut down on the time accountants needed to process their ledgers.
By the end of the century, Herman Hollerith invented a punch-card machine that records data by punching a pattern of holes into a card. The machine can read these patterns and call up needed information. By 1907, these machines were widely used.
After World War II, accounting automation took a leap when General Electric purchased the UNIVAC (Universal Automatic Computer) for the sole purpose of running its payroll. This computer was invented by John Mauchly and J. Presper Eckert. This machine used magnetic tape instead of punch-cards to store data. It was able to do the entire payroll process in 40 hours.
More accounting machines and software were developed through the years including Microsoft Excel. This is the one type of software (there are other software that operate much like Excel does) that is indispensable to most accountants.
Benefits of automation in accounting
Talented software developers keep on churning out new and improved accounting programs and tools that aid in the accounting process; and this is good news because accounting automation has undeniable benefits.
Human error is normal. We all make mistakes. And when you have spent countless hours poring over numbers upon numbers, the chances of human error increases as the hours get longer. When you have an automated accounting system in place, you cut down on the manual parts of the process, the parts where human error is rife, and you allow the program to do what it was intended to: run numbers and give out accurate data. Machines rarely make computing errors.
This does not negate the work of an accountant, however, because an actual accountant still needs to verify the data and make sense of it for whatever purpose the business has for it; but it does cut down on errors.
Cuts down on time
Automation can save you a lot of time. An accounting software can create thousands of entries in a second. It would take one human several hours if not days to do that. Closing your books at the end of the month could be as speedy as a sports car speeding around a racetrack.
All this with the added bonus of data accuracy. Getting your numbers to match would be a breeze. Your accounting software would have checked and double-checked all your data entries, reconciled your figures, and spit out the report long before your monthly deadline.
Payment confirmations, cross-checking data between spreadsheets or systems, these could take up days when done manually. With automation, this can be done within seconds and can be run and re-run without causing much trouble or time.
With automation clearing more time for your accounting employees, they can turn their attention to other things. Less time to process means more work or data can be processed in any given amount of time, so your employees can focus on your client’s other needs.
The more time your employees have to address your customers or clients, the better your service will be — and the higher your customer satisfaction. Customer satisfaction usually translates to repeat customers, and given time, new customers.
Various governments are now slowly getting on board with digital receipts. Sooner or later, we may be able to get away from actual paper storage. Depending on where you are, governments will need you to store your financial and tax records in paper. This creates a weak point when it comes to data security.
When your financial and tax documents are stored digitally, anyone who has permission to access that data can access them without needing to physically go through filing cabinets and file folders. That data can easily be retrievable with just a few keystrokes and a password. This also makes your data more secure.
Accounting has grown throughout the years from something that is tedious and time-consuming to something that can be managed with the help of accounting software and automation. Automation can cut down on errors, time spent, and even physical storage space.