In this two-part blog series, we explore the key benefits that companies gain when they automate some or all of their accounting and financial management processes.
Amid a labor shortage, business growth and the ongoing push to “do more with less,” finance teams are turning to automation for help, and for good reason. By eliminating repetitive tasks, manual processes and the risk of errors, automation provides high levels of efficiency while freeing up valuable human resources to focus on more important projects.
Automation’s positive impacts can be seen across nearly all departments—from manufacturing and distribution to sales and marketing—and the accounting department is no exception. “Accounting process automation leads to the faster, smoother and more accurate completion of accounting tasks,” NetSuite points out. “This more efficient process, in turn, delivers a range of benefits to a business and its customers, all of which stand to improve a company’s bottom line.”
By working with a Business Process Outsourcing (BPO) partner and NetSuite consultancy like ScaleNorth, organizations of all sizes can effectively streamline and automate processes that would otherwise be managed manually. Through this arrangement, you can enjoy fractional accounting support that scales, while having those same NetSuite certified accountants set up financial automations that reduce the time to close and save countless hours of manual labor.
Some different ways that companies are using accounting automation include:
- Automated approval processes. You can use workflows to automate the approval of transactions, thus decreasing the need for human intervention across hundreds or thousands of different transactions.
- Integrations with point of sale (POS), e-commerce and other systems. Automated accounting processes eliminate the need for manual data entry across systems regarding orders, payments and other transactions.
- Automated invoicing. NetSuite’s automated billing module automatically generates and sends invoices to customers based on predefined billing schedules and rules (e.g., once an order is marked as “fulfilled” in your system).
- Fast refund processing. You can do the same thing with refunds: when Shopify processes a refund, automations can trigger the refund within NetSuite and back to the client quickly and without the need for human intervention. If a transaction requires further review, it will be flagged and sent to the right person for that review.
- Streamlined bank reconciliations. By integrating NetSuite with their banks, companies can automatically upload NACHA files via SFTP to streamline the bank reconciliation process. Automatic bank feeds enable the automatic import of bank and credit card transactions, which can then be easily reconciled with NetSuite accounts.
- Faster payments from customers. ScaleNorth’s Dunning for NetSuite ScaleApp automates the collections process and streamlines the sending of dunning letters, attachment details and summaries directly from NetSuite. With highly customizable workflows and messaging, you can ensure that customers are paying on time, keeping their credit card information up to date and enjoying continuous service.
- Process vendor invoices and payments faster. NetSuite’s automated accounts payable feature automates the accounts payable process by automatically matching invoices to purchase orders and receiving reports, generating payments and reconciling accounts. The ideal solution for businesses that accept credit card payments online, ScaleNorth’s ScalePay app lets you accept credit card payments with lower processing fees, faster funding, real-time reporting, PCI compliance and best-in-class security.
Using NetSuite, you can also automate the accounts receivable process by automatically generating customer statements and reminders, processing payments and reconciling accounts. You can automate repetitive journal entries like recurring transactions or amortization schedules, or automate financial reports such as balance sheets, income statements and cash flow statements.
4 Key Benefits of Automation
These are just some of the core accounting automations available in NetSuite that can be facilitated by ScaleNorth via its BPO program and intellectual property (IP) development. Depending on your company’s specific needs, there may be additional automations that can be implemented to streamline your accounting processes. Nearly every aspect of financial management can benefit from automation which in turn helps to drive corporate growth, eliminate errors, improve compliance and enhance the bottom line.
Here are some of the other key wins that companies can expect from automating their accounting processes:
- Improved accuracy. “Anytime you type or write by hand, there is a possibility you will get a number wrong. One of the main job responsibilities of an accountant is to check and then double-check for simple math errors,” Sean Peek writes in Business.com. “Everyone knows that 1 + 1 = 2, but with a stack of hundreds of invoices, mistakes happen.”
- More efficient operations. By automating accounting processes, you relieve workers from monotonous tasks and free them to use their skills in more productive ways. “In most cases, invoice processing primarily involves reading and entering figures, then checking them for accuracy,” Peek points out. “As this portion of the AP process is automated, accounts payable professionals can use their skills to maximum effect by shifting to a more analytics-focused role, looking for opportunities to improve cash flow and secure discounts from vendors, for example.”
- Improved data quality. Automation improves data quality by reducing the need for spreadsheets and manual entry. “It’s no secret that manual data entry is a common source of accounting errors,” Scott Beaver writes in Why Accounting Automation Should Be a Priority Right Now. “A simple slip up, like transposing a number or adding an extra zero, can throw off account balances and affect the accuracy of financial statements. Relying on spreadsheets to keep track of depreciation, allocate expenses or perform other common accounting tasks increases the risk of errors.”
- Lower business risk. Companies with poor financial controls are more likely to be taken advantage of than those with effective ones, Beaver points out. “Invoice fraud, including overcharging, sending duplicate invoices and billing for goods or services that weren’t provided, is one of the more common ways businesses are victimized,” he writes. Automating accounts payable minimizes fraud risk by automatically comparing invoice details to purchase orders and receiving documents to ensure pricing, unit quantity and totals match. “This three-way matching can simplify accounts payable processes by automatically scheduling approved invoices for payment while flagging anomalies for further investigation by AP staff,” Beaver adds.
In Part II of this blog series we’ll show you how to carve out a successful path to implementing NetSuite and using it to automate some or all of your accounting processes.