As a business owner, you’re already juggling a multitude of tasks, but keeping a firm grip on your finances is always the top priority.
Fortunately, modern technology offers a range of software and automation tools that can streamline various accounting operations, including recording payments, tracking expenses, and processing accounts payable.
Sage reports that nearly 90% of accountants believe that a cultural shift in the accounting industry is leading to technological change. By eliminating the possibility of human error, accounting software can help ensure that financial records are complete and accurate, reducing the risk of costly errors. Furthermore, automation can help companies comply with regulations and standards. Allstar reports that accounts payable software takes anywhere from 6 to 18 months to pay for itself.
Here’s how you can make an informed decision about which tool to use for your accounting needs:
What are the technologies used in AP automation?
There are various tools with different technological capabilities that can be used to automate the accounting process. The functions of these tools are divided into the following categories.
- Data extraction technologies: The use of data mining technologies is a key component of AP automation.
- document scanning: Document scanning is a method of digitizing paper documents so that they can be stored, accessed, and processed electronically. Scanned documents can be processed using data extraction technologies to extract relevant data points, such as invoice numbers, vendor names, or amounts due.
- Optical Character Recognition (OCR): OCR detects the text of scanned documents and converts it into machine-readable data.
- Machine/deep learning to map data to specific tags: These technologies involve the use of algorithms that can “learn” to recognize and categorize data based on patterns and examples.
- Machine learning to automate tasks like matching invoices to accounts: By analyzing past transactions, machine learning algorithms can “learn” to make accurate matches and reduce the need for manual intervention.
- Data management: Effective AP automation relies on proper data management so that enterprises can use data storage and retrieval systems, such as databases, cloud storage solutions, or other types of data management software.
- processing payment: AP automation can also include payment processing, such as the use of electronic payment systems or payment processing software to streamline payment processing workflows.
- General purpose automation tools like RPA: RPA can be used to automate tasks such as data entry, invoice processing, and payment processing, reducing the need for manual intervention and increasing efficiency.
Choosing the best accounting software solution for your company
Choosing the right accounting software can be a daunting task for many organizations. Businesses transitioning from manual to computerized accounting systems may lack clear guidelines on the key criteria to consider when selecting the appropriate software. Find below some tips on the strategic selection of automation tools and software for accounting operations.
Identify your needs and goals
Before selecting any accounting software, you should have a clear idea of your company’s accounting needs and goals. Consider the size of your business, the complexity of your financial transactions, and the specific accounting tasks you need the software to perform. End-to-end end-to-end solutions can offer a host of benefits beyond the job of the access point administrator, including better vendor relationships, simplified audits, and optimized cash flow. However, a small business may not need that level of automation, in which case, point solutions may be the key. Make a list of all the features you need and prioritize them according to their importance.
Consider the ease of use of the software
A relevant but not directly related example is the study carried out by Accenture, which found that 33% of consumers consider ease of use as a crucial factor when buying a smartphone. This principle applies to all kinds of tools. The best accounting software is one that is easy to use and understand. It should not require extensive training or technical experience to operate. You can also try a demo or trial version of the software to test its usability.
Check compatibility with other software used in your organization
Your accounting software should integrate seamlessly with other accounting systems through various integration options like APIs or middleware. This integration allows AP’s automation software to retrieve data from external accounting platforms, process it, and update the information. For example, the Nanonets platform can be integrated with other accounting systems such as QuickBooks and Sage, providing businesses with automation and reporting capabilities while using their preferred accounting software.
Compare Pricing Plans
The cost of AP software can vary based on factors such as vendor, features, and company size. Some providers offer subscription-based pricing, while others have one-time purchase costs or tiered pricing options. The investment amount is generally based on the number of invoices processed per month. A scan-and-file approach can cost a few hundred dollars, while a more advanced model with upfront invoice processing, automatic matching, approval workflows, and archiving can cost between $100,000 and $500,000. cloud have implementation fees based on monthly invoice transactions, ranging from $20,000 to $35,000 for more than 10,000 transactions per month. Compare different pricing plans and subscription models to find the one that fits your budget.
Consider access and storage functions.
When considering which accounting software to use, it’s important to think about access and storage features. Most accounting software allows you to control what data and tasks other users can access, which is useful if you want to give your business partner and accountant full access and limit your employees’ access to keep track of their time and bill clients. Cloud-based accounting systems are becoming more and more popular as they allow you to access your account from anywhere with internet access, making it easy to manage your business remotely. Many also offer mobile apps to help you monitor key information and complete tasks on the go, which is especially useful for teams working remotely or in the field. If you own multiple businesses, you may want to consider accounting software that supports multiple small businesses on a single account to avoid paying more for separate accounts.
Look for security features
Accounting software contains sensitive financial information that must be protected. Look for software that offers strong security features such as data encryption, password protection, and multi-factor authentication. The software should also provide regular backups to prevent data loss.
Read reviews and ratings
Businesses can benefit from the same trend seen among general consumers when it comes to online reviews. According to Business dot com, a staggering 77% of people read online reviews before making a purchase. This highlights the importance of positive reviews, which can also come in the form of personal recommendations when companies are considering investing heavily in automation tools. These reviews and ratings can be found on various platforms such as software review websites, social media, and online forums.
Check access to customer support
Customer support is essential for any software you use. Look for software that offers 24/7 customer support through various channels such as phone, email, or live chat. You should also look for online resources like FAQs, tutorials, and user forums.
Nanonets in your accounting automation suite
Nanonets is an easy-to-use AI-enhanced OCR software that is perfect for automating manual bookkeeping tasks. Its wide range of tools, including automated workflows, document verification, 3-way matching, and OCR API, make it an ideal choice for small businesses in 2023. In addition, Nanonets offers customized training, note takers , 24×7 support and a free trial. making it easier to start a business.
With Nanonets, you can automatically upload all your financial documents such as bills, receipts, and invoices with easy integrations. The software then extracts the data from the scanned documents, validates the authenticity of the document, and uploads the data to the system of your choice. This eliminates the need to manually upload receipt information and match purchase order, receipts, and invoices, while automating accounting workflows and month-end close processes seamlessly.
Some of the benefits of using Nanonets include ease of use, a code-free environment, automated drag-and-drop workflows, automated expense reporting, autopilot invoice processing, and the ability to pay vendors using payment platforms. global. Nanonets also offers 24/7 support, >95% API model accuracy, GDPR, SOC2 compliance, and pay-as-you-go plans.
Carry
Automation has revolutionized the accounting process, making it more efficient, accurate, and profitable. By adopting automation tools like cloud-based accounting software, businesses can streamline their accounting operations, reduce the risk of errors, and improve financial reporting. Additionally, automation allows companies to focus on more strategic activities, such as analyzing financial data and making informed decisions. As technology continues to evolve, we can expect more advanced automation tools to emerge, offering even more benefits to businesses of all sizes. It is important that companies keep abreast of these developments and adopt automation tools that align with their needs and goals.
