How to Deploy Accounting Process Automation

Many companies are looking to automation of accounting processes to increase their productivity in a tight labor market. Finding the right solutions is made increasingly difficult due to the number of specialized software vendors that promise to solve all of your accounting problems with the specific software package that they are selling.

We explore solutions to common accounting automation problems that can be deployed at most businesses using software that’s readily available and has a large online community of support behind it for many common use cases.

Accounting Process Automation means that accounting might look more like programming and process management than Excel Spreadsheets

Understand the Value of Accounting Process Automation

Everybody knows that process automation is valuable and worth pursuing. It can save a company time, money, prevent accounting errors and help management make better decisions.

Understand the Cost Benefit of Process Automation for Your Business

It’s amazing to us that so many businesses will deploy expensive solutions for process automation that end up having minimal benefit and negative ROI. For example, specialized Robotic Process Automation (RPA) software like Automation Anywhere or UiPath can be extremely difficult for business users to deploy, require specialized skillsets to manage and can cost hundreds of thousands of dollars to deploy.

This isn’t to say that RPA isn’t valuable, but when it’s deployed to save a couple hours a month on a project that could be completed by a low wage clerk, it’s difficult to justify the expense.

Identify Accounting Processes that Can be Automated

The processes that you want to focus on automating will need to be considered under the following criteria.

  • How much does this process currently cost? Estimate the number of labor hours it currently takes to complete, and multiply it by the frequency of completion, and an estimated hourly cost of the person completing the task to get a rough estimate.
  • Is This Process Highly Repeatable? Processes that are the best candidates take a long time to complete, or are very frequent. Think about high volume Accounts Payable or Receivables where transactions are routine. Also consider Financial Reporting decks that take a long time to consolidate source system date into but is mostly formulaic.
  • Is There a Lot of Process Variability? An accounting process really isn’t a process if there are exceptions to it every time it is ran. If you are constantly performing manual adjustments, any software solution will struggle to handle the wide range of exceptions that occurs.
  • Are You Typing Data from One Piece of Software Into Another? When you break down the time spent within a corporate accounting office by how much time is spent pulling data from one system, manipulating it, only to put it into another software system you might be shocked. These processes are great candidates for process automation.

Determine if Automation is a Band Aid for a Bad Process

All too often we see companies that want to re-create an existing bad process in another software system with the hope that it will solve a problem. They will typically end up with a solution that gets to the same results faster, which in a way is a win, but they fail to solve the root cause of the problem.

A lot of accounting automation projects should start with your Accounting Software.

For example, if you are constantly reconciling accounts, you should look at ways to avoid reconciling variances along with investing in ways to more efficiently reconcile accounts. Whenever an error or reconciling item can be avoided it will save you time and eliminate the need to do as many reconciliations in the first place.

You want to avoid investing money in recreating a bad process. Invest it in a way that will help you avoid problems to start with.

No Two Companies are Exactly the Same

We are only pointing out common solutions to common problems. We know that no two companies are the same, and their biggest accounting problems are going to be solved differently.

There is no magic tech stack that will make sense for all companies. For example, we would never recommend a company switch their reporting to Tableau if they’ve already invested heavily in building out reporting dashboards in Microsoft Power BI.

Accounting Process Automation Changes Accounants from Doers to Process Managers

A key component of implementing an accounting automation strategy is the understanding that not all of the work will go away. Business priorities change over time, requiring updated reports. AI and Automation Systems do not work 100% of the time as there are always process exceptions.

The role of accountants at highly automated organizations shifts from preparing data in Excel spreadsheets to creating accounting workflows, managing processes, spending time developing highly automated reports, and handling exceptions.

The skillset might look something more akin to a business analyst or low code computer programmer in the future with a depth of financial knowledge to understand when the process is or is not working as expected. By investing in training on the systems that you implement, you can help your team transition from a role as a doer to one as an accounting process manager.

Common Software Solutions for Accounting Process Automation

Here is an overview of some of the software platforms available that we recommend people look into. You’ll notice that many of these software names you’ve likely heard of before.

We believe in using widely document software solutions with communities of support

By utilizing software that’s not subject to a specific niche, your team will be able to self-support it. You can Google when you have problems and find answers. There are message boards with tons of great information, inexpensive training online solutions, and a plethora of consulting firms available to help.

The less common your software is the more expensive it will be to maintain, and the harder it will be to find people in the future that know how to operate it.

Recommended Software Solutions

These are some of our favorite solutions for process accounting process automation. We have grouped them into broad categories with an explanation of what scenario you would use them in.

Automating Financial Reporting and Dashboards

The overall process involves extracting data from several systems, consolidating it into an easily readable format. The reports contain multiple levels of summarization and can be provided to people across different levels of an organization.

Recommended Solutions

  • Microsoft Power BI
  • Tableau
  • Improve Utilization of Existing ERP System
  • Financial Planning and FP&A Consolidation Software like Workday or Annaplan

We like Microsoft Power BI as the front runner for this situation because of it’s wide support and low cost. It’s published by Microsoft which most companies already have a relationship with. A Power BI Pro license can be added to a Microsoft 365 Account for $10 per month per user and is a self service solution.

With a wide support base, it’s usually possible to connect Power BI or Tableau directly to common ERP systems. This enables live data feeds and up to date reporting for your organization.

Power BI’s biggest competitor is Tableau which is published by Sales Force. It’s another great option and both are widely documented so you can use AI tools like ChatGPT as a quick reference guide.

While not always possible, you should also explore the configuration and setup options of your existing ERP. Many core accounting systems are underutilized and provide advanced reporting features.

As a final consideration, there are many great FP&A software packages available that enable advanced financial reporting functionality. It’s worth noting that these implementations are a big lift and can be quite expensive.

Automating Accounts Payable and Receivables

Transactional accounting automation has come a very long way. The range of tools available range from specialized products that handle only accounts payable and receivable to more open ended solutions such as Microsoft Power Automate.

There’s a lot of overlap in these tools as well. RPA solutions and data analytics platforms have also moved into the space which makes it more difficult to decide which route to go.

Recommended Solutions

  • Microsoft Form Recognizer and AI Builder
  • Specialized AP Solutions Based on Company Size

It’s difficult to name a specific solution provider here because the volume of documents being processed will have a huge impact on what makes sense for your company. Some AP automation companies are suited for high volume process with integration with Oracle Financials or SAP while others integrate with QuickBooks.

Integration here is a key consideration, along with the ability to train the document conversion model.

As an open solution, we like Microsoft AI Builder. It’s inexpensive to deploy, and has many models already built out for converting documents to text, and extracting key information from it.

The first challenge is importing the extracted data into your accounting system

Even if the software does a great job extracted the needed information, you have to get it back into your accounting software. This is one of the bigger challenges with transactional accounting information. Sometimes you can setup direct connections using low code integration software like Power Automate Flows or Zapier. Other times you may need to establish a custom API. If it’s low volume, then you can often get away with exporting the data to an Excel spreadsheet and uploading it into your system.

The second challenge is exception handling

No automated solution is 100% automated. This is important because there will always be exceptions. Even the best AI powered conversion systems from top tier companies might only accurately convert 70% of your documents into a format that can be input into an accounting system without intervention.

A system must have a robust capability for your team to give the system feedback or train it. Exception handling can be time consuming, and training is required to correct the system when it doesn’t recognize a document format. This commonly occurs after adding a new vendor.

Will AI and Automation Replace Accountants?

There has been a lot of talk about ChatGPT and Accounting. While there are a lot of great examples of how to use ChatGPT with Accounting we think that the complete automation of the accounting process is still a ways a way. While computers are great at understanding and automating recurring transactions and can handle the stuff that is routine day to day, businesses are messy.

It takes a conversation or sometimes several to fully understand what a business is doing, and there can be judgement calls required on how best to account for them where there will likely always be a need for people to be involved in the process.

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