12 May Automated Bookkeeping
Automation is a hot topic now. It is fundamentally changing the way we do things.
Accounting professionals who have embraced automation view it as a means to increase their
efficiency and productivity.
As a busy business owner, it would be great if you could automate all of your bookkeeping.
But unfortunately, with the technology available now, it is not possible to fully automate
bookkeeping. Automation has enabled bookkeepers and accountants to eliminate manual data
entry to a great extent.
In the olden days, a bookkeeper would have to manually enter purchase invoices and expense
receipts in the accountancy software. Now, cloud accounting packages like Xero can be
connected with automation apps like Hubdoc and AutoEntry to eliminate manual data entry
and speed up invoice processing.
Accountancy software has to be properly configured and correctly integrated with automation
apps for the automation to work smoothly. If the integration is not proper, data is just dumped
into Xero and not necessarily into the right accounts. The integration which was done to save
time in the first place could lead to a huge mess because of the improper mapping of
transactions between Xero and the app. Business owners should take the help of professionals
to ensure that the integration is properly set up and fit for their purpose.
Bank feeds is another important automation tool. Bank feeds are read only transactions that
download from your bank accounts into Xero. Bank feed does eliminate a lot of data entry
time but it is not a fully automated process. Customer and supplier names and account codes
that are being added to the transactions have to be reviewed. When people just click add on
the bank feeds transactions could be wrongly categorized and duplicated leading to a great
mess which can be avoided by entrusting bookkeeping to professionals who are trained to use
the bank feeds functionality properly.
Some bookkeeping activities can be automated by connecting Xero with other apps. When it
comes to bookkeeping automation, what we are actually talking about is eliminating a lot of
manual data entry. A great deal of care has to be taken when connecting Xero with another
app to ensure that there is proper mapping between the two so that you don’t end up with a
mess of transactions in Xero. Also, when you are working with bank feeds, transactions have
to be properly categorized before adding them to Xero.