From TechWire Asia: We’ve heard about the potential horrors of automation, and when it comes to automated accounting, it might make some people, especially accountants, nervous. But should that be the case?
Historically, many SMEs and startups still struggle to stay afloat, even before the pandemic turned our lives upside down.
As it turns out, one of the major reasons why startups fail is not merely due to the lack of funds, but an inability to control funds in an effective manner.
According to a US Bank study, about 82% of small businesses fail due to cash flow problems brought about by the lack of strong accounting and bookkeeping processes.
This is due to poor inventory management, delays in the payment of bills as well as improper budgeting, leading to unnecessary expenditures.
Five reasons why automated accounting is great for SMEs
Saves time, leading to higher productivity
Startups are often already made up of small teams as it is, if not one single entrepreneur, making the process of managing funds a burden in terms of time and effort, thus becoming a hindrance to productivity. With an automated accounting system, the platform or software does the work for you, so smaller teams can focus their efforts on what truly matters — higher level work.
More accurate data
Let’s be real — humans are notorious for being error-prone. But that’s normal, as the saying goes — we’re only human. This is why automated solutions are used — to help with reducing human error.
Almost-instantaneous data retrieval
Decades ago, financial information was physically stored in multiple files and folders — and for some, across multiple rooms. Now, many have digitalized — somewhat, with excel sheets and perhaps even google sheets.
But it’s still a manual process in that multiple sheets have to exist, and be stored locally or on the cloud — retrieval is not as simple as an extensive search function built into an accounting platform.
It’s much more convenient to be able to access all the information through an automated accounting system with a simple user interface with advanced search features — even better if it’s stored on the cloud.
Online storage and retrieval
According to Spendesk, a major burden for many companies and accountancy firms is the need to store paper records for 7-10 years. Thankfully, government tax offices around the world are slowly getting on board with e-receipt storage – digital copies of documents instead of paper files.
Automated accounting software, however, lets you input a received financial document into your company’s ledger, then automatically store the proof of purchase in an appropriate folder. Every document is then accessible to you no matter where you are if it has cloud storage.
Allows for professional development
While this management of funds may be seen as a mundane but necessary part of work for large corporations with a dedicated finance department, the tedious paperwork and time-consuming administrative processes can be an almost insurmountable challenge for SMEs.
However, modern software unlocks the full potential of finance teams — even accountants. They can now easily move past many of the tedious, manual tasks they’ve often been forced to endure, and finance professionals can focus on management accounting, strategy, and improving communications.
Automated accounting helps accountants, not hinders them
With accurate, up-to-date data on hand, accountants can be the trusted, impactful business partners their companies need.
According to Ishi Singh, Founder of Singapore-based automated accounting startup Counto, “This shake-up in the accounting space is new but very much approaching, with advancements in AI presenting opportunities for firms to reimagine an accounting world where the role of a bookkeeper becomes closer to that of a personal Chief Financial Officer.”
Singh, a veteran with over 20 years in the business, tech and accounting scene, highlights that their AI-led platform Counto was born out of emerging industry disruptions, where he realised the need for startups to gain a strong hold of their finances in order to thrive and scale, amidst the increasingly software-driven world.
Offering bookkeeping, tax, and CFO services together with insightful analytics to help companies run and grow their businesses, Counto offers its clients access to their data anytime and anywhere with no limitations. Through AI, it helps automate the manual aspects of accounting for businesses by optimising processes, producing accurate monthly reports and even generating useful financial insights all at affordable prices.
As written by Eva Nagarajah for PWC, research by McKinsey Global Institute found that, “Although going digital is the new buzzword and consumers have largely gone digital, the digitization of jobs is still in the very early stages, even for companies that are at the forefront of digital spending”.
As such, it is imperative that accountants be skilling upwards to negate the risks of obsolescence. “As technology becomes increasingly sophisticated and present in all aspects of businesses, accounting professionals can expect a shift towards more strategic and analytical roles,” stated recruitment firm Randstad Singapore.
“The automation of accounting transactions is inevitable and accountants have to constantly stay relevant by providing value-add to the business. Competition may be stiffer with lesser accounting jobs in the market over time as a result of automation thus there is a demand for higher quality accountants who are able to provide sound business judgement, proposals while still upholding accuracy,” said Toh Joo Lee, Manager, Accounting & Finance, Robert Walters Malaysia.