When you run a business, accounting is a must. In most cases, this means doing it yourself or hiring someone else to do it for you. But, what if there was a third option that was easier than doing it yourself, and less costly than hiring a professional? That’s what cloud-based automated accounting is all about. Many businesses have used this new technology to improve the profitability of their business by saving time, saving money, and increasing their revenue. Let’s take a look at how automated accounting can benefit your business, but first, let’s briefly go over the concept of accounts payable automation.
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Accounts Payable Automation
What are accounts payable automation? To put it in simplified terminology, it is software that automates business accounting specifically when it comes to accounts payable, as the name implies. In other words, tasks such as paying vendors, invoice and expense approvals, calculating settlement discounts, and setting vendor credit terms are all automated to improve workflow.
Now that we’ve covered the basics of what Accounts payable automation is, let’s dive a bit deeper into why it is so valuable for businesses. This will help to give you an idea of how this technology will help you to improve your revenue flow and grow your business.
1. Save Time and Improve Workflow
Cloud-based automated accounting can help lessen or eliminate the need to make journal entries by hand. It puts pretty much the entire process on autopilot. On top of this, it also helps to reduce errors that can be costly either by having to fix them or by having to deal with the problems that arise from erroneous data.
When looking at this as a whole, it is easy to see that your business workflow will improve. This is because your team won’t have to deal with loads of accounting paperwork since paying and creating invoices can be handled automatically. This speedy way of handling things can also improve relationships with clients.
2. Prevent Duplicate Payments
One of the worst things that can go wrong when it comes to business accounting is duplicate payments. If you’re the one making the dupe payment, then you’ll have wasted money for no reason that may be impossible to get back. On the other hand, if something goes wrong with your invoicing and a client or customer makes a dupe payment, then you’ll likely have to go through the trouble of refunding them which would normally take time and effort that could be spent elsewhere. By relying on cloud-based automated accounting, you can better avoid these situations.
3. Avoiding Audits
Since automated accounting creates fewer errors, there is a lower chance of your business being audited. This in and of itself is a major benefit but it is also worth considering what happens if you get audited anyway. Normally, you’d have to waste time and effort compiling all the required paperwork and hope that you didn’t make any mistakes. With automated accounting, you don’t have to deal with any of that. The data is already saved and ready to be sent to whoever needs it. It’s less of a hassle, and it gives you less to worry about.
4. Handling Credit Terms and Limits
When it comes to credit, things can get even messier in terms of accounting than normal. This is especially true if different vendors have different terms and limits on their accounts. Instead of attempting to keep track of all this data manually, relying on cloud-based automated accounting software allows you to easily set terms and limits as needed and then use that information when any future changes to those accounts are made.
5. Automated Approvals
Even when using automated accounting there will be times when certain things need to be approved by certain people. The good news is that with this technology, invoice and expense approvals can be completed much more quickly. This is because when approval is needed the correct information is sent to the right person instantly so that the authorization workflow proceeds uninterrupted.
A Smart Investment for Your Business
Whether you’re running a start-up or have a well-established business, cloud-based automated accounting software is one of the best investments you can make. The time and money that you save with it mean that the software will quickly pay for itself. On top of this, it just makes life easier for everyone in your business when it comes to dealing with anything accounting related.
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