Introduction

We all know that anything that remains stagnant eventually goes into extinction with time. Accounting profession evolves and this comes with some level of innovation. The accounting profession moves in tandem with the current realities of our time – technological advancement in all facets of business activities.

In the information super highway and big data age, accountants are increasingly turning to automation to streamline their routine tasks, reduce errors, and enhance efficiency. This shift towards automation not only saves time but also allows accountants to focus on more strategic and value-added activities.

In this comprehensive article on automating routine accounting tasks, I will provide you the necessary guide needed to automate routine accounting tasks while ensuring compliance with International Financial Reporting Standards (IFRS). You can consult your local legislation if you need to add some local flavor.

It will be in order to state some prerequisites and assumptions here. To fully benefit from the content of this article, you need to have some basic knowledge of programming as an accountant. You can read this earlier post on how I learnt to code as an accountant to get started. Also bear in mind that there is no straight jacket for everything automation in accounting.

Firstly, evaluate Your Current Workflow

No sane person embarks on any worthwhile venture without taking some sort of inventory. Before diving into automation, it’s crucial to assess your current accounting workflow. Identify repetitive and time-consuming tasks that are prime candidates for automation.

Typical tasks that can be automated include accounting double entry posting, data entry, journal entry, auditing, reconciliation, report generation, and data analysis. Every other aspects of automating your routine accounting tasks hinges on this first step – get it right or forget about it, it is that simple.

Choose the Right Accounting Software

Selecting the right accounting software is the foundation of successful automation. You cannot get the job done by using the wrong tool. Look for software that is IFRS compliant and offers automation features.

Popular accounting software options like SAP, QuickBooks, Sage, Xero, Microsoft Dynamics and FreshBooks just to mention few often provide automation capabilities for tasks such as expense tracking, bank reconciliations, and invoice processing.

You can leverage on the power of spreadsheet programs like excel if your budget cannot accommodate a full-fledged accounting software. The only extra task is that you have to know how to use excel for this – you can drop me a message if you would need my expertise in building excel model for this.

Data Entry Automation

Majority of the accounting tasks that are prime candidate for automation are within the data entry sphere. I will be discussing some of the most popular data entry tasks that are easily automated in this section of this article on automating routine accounting tasks.

Bank Reconciliation

Automating bank reconciliation is a significant time-saver. Most accounting software can connect to your bank accounts and automatically match transactions, reducing the risk of errors. Set up automated bank feeds and reconciliation rules to expedite this process.

Invoice Processing

Automate invoice processing by using Optical Character Recognition (OCR) technology. OCR can extract data from invoices and input it into your accounting software. This eliminates manual data entry and reduces the chances of transcription errors.

Expense Tracking

Expense tracking can also be automated by integrating expense management tools with your accounting software. Employees can submit expenses digitally, and the system can automatically categorize, approve, and reconcile them. Some of the tasks described here may require certain degree of configuration – so be sure to reach out customer support of your service provider should you find yourself struggling to maximize the automation potential of your chosen accounting software.

Automate Financial Reporting

Another area where accounting software really shines in as far as automation is concerned is in the area of reporting. Some of the most popular reports that can be generated on autopilot are discussed below.

Generate IFRS-compliant Financial Statements

Many accounting software solutions offer templates for IFRS-compliant financial statements. You can automate the generation of income statements, balance sheets, and cash flow statements with just a few clicks. Sidebar; knowledge of IFRS or IAS is a must so as to stand a chance of catching wrong output due to misconfiguration of software.

Real-time Reporting

Set up real-time reporting dashboards that pull data directly from your accounting software. This allows you to monitor key financial metrics and make informed decisions quickly.

Automate Tax Compliance

Compliance is always a big deal especially nowadays that government of many countries are feeling the financial pressure of keeping up with its ever increasing responsibilities. Being tax compliant amongst other things stands out as far as compliance topic is concerned.

VAT/GST Calculation

Automate the calculation of Value Added Tax (VAT) or Goods and Services Tax (GST) using your accounting software. Ensure that the rates and rules align with IFRS requirements and local tax regulations.

Tax Filing

Explore tax compliance software that can help automate tax filing processes. These tools can calculate tax liabilities, generate tax reports, and even e-file tax returns, saving time and reducing the risk of errors.

Implement Automated Approval Workflows

In my many years of experience working in different capacities within organizations, it has become somewhat apparent to me that approval takes time. So, setting up automated approval workflows for invoices, expenses, and other financial transactions is one veritable ways of improving efficiency and saving costs. These workflows ensure that all financial transactions are reviewed and approved by the relevant personnel, in compliance with IFRS internal control requirements.

Data Analysis and Audit

Data has long become the modern day language of choice for businesses. Data driven managers have long understood this and have since positioned themselves to take advantage of analyzing data. Two key areas where data analysis has really exceled are in decision making and in preventing fraud.

Automated Data Analytics

Leverage data analytics tools to automate the analysis of financial data. These tools can identify trends, anomalies, and potential issues, allowing you to proactively address them.

Audit Trails

Maintain comprehensive audit trails of all financial transactions. Automated audit trails provide transparency and traceability, which are essential for IFRS compliance and external audits.

Monitor and Adapt

Power they say is dangerous without commensurate controls. A whole lots of things can go wrong when automation are left unattended.

Therefore, it is absolutely important to regularly monitor the performance of your automated processes. Look for opportunities to fine-tune and optimize your automation workflows. Ensure that your accounting software and tools stay up-to-date with changes in IFRS standards – most of the time, all that is required from you is to simply have the updated version of your software of choice installed.

Data Security and Privacy

When automating accounting tasks, it’s crucial to prioritize data security and privacy. Implement robust cybersecurity measures to protect sensitive financial information from breaches and unauthorized access. The implementation of the contents of ISO27001 should be the baseline standard on this.

Employee Training

Train your accounting team on how to use the automated tools effectively. At the very least, care should be taken to ensure that they understand the IFRS compliance requirements and how automation aligns with them.

Seek Professional Advice

Consult with accounting and automation experts to ensure that your automated processes remain IFRS compliant. They can provide guidance on best practices and any specific IFRS nuances in your industry.

Final note from me

Automating routine accounting tasks is a strategic move that can significantly improve efficiency, reduce errors, and enhance compliance with IFRS standards. By following the tips given in this article, accountants can embrace automation while maintaining the integrity and accuracy of their financial reporting. As technology continues to advance, staying informed about the latest automation tools and IFRS updates is essential for long-term success in the accounting profession. Embrace automation, and free up time for other value add activities.