The world we live in today is dictated and powered by data. It is at the core of decision-making. It plays a vital role in enhancing the efficiency and growth of your business. Gone are the days when decisions were based on intuitions and gut feelings of business leaders. In the present business world, all decisions, big or small, are backed by relevant data. In short, data drives your business.
All your business data, especially that related to accounting and finance, provide you great insights into various aspects of your business. These insights help you decide the future of your business. Therefore, you need to manage your data-related processes effectively. Doing so makes sure you process your data appropriately and have a competitive edge over your counterparts in the industry.
However, managing accounting data is easier said than done. There are accounting data entry issues like dual inputs, human errors, unpopular data silos, and obsolete details, etcetera that you have to deal with. That said, there are ways to reduce accounting data entry and start automating it.
This post lists some of the top methods through which you can reduce accounting data and start automating. But before that, we will understand the data entry process, the challenges associated with it, and the importance of automating it.
1) What is accounting data entry?
2) What are major accounting data entry challenges?
a) Time Consumption
b) Error-prone Process
d) Sudden Influx of Work
3) Why is automation the need of the hour?
4) What are the top ways to reduce accounting data entry and start automating?
a) Identify commonly used procedures
b) Search for the best-automated data entry software
c) Data migration and alteration
d) Identify further automation requirements
e) Integrate and test additional automation tools
f) Relay the information
g) Closely monitor the system
5) Final Thoughts
What is accounting data entry?
Accounting data entry is a simple process of entering specific accounting details in a preferred format or software.
There are dedicated professionals called data entry clerks or operators who spend innumerable hours entering all the details in the desired format into computer systems. Manual data entry is an unexciting and monotonous task that takes a lot of time.
For example, a data entry clerk in a bank enters all clients’ information in an Excel spreadsheet. So, every time a new client associates with the bank, the clerk has to update the file with details like personal information, account statements, credit score, documents of any other sources of income, etcetera. Imagine the number of hours he would have to dedicate to enter the details of all the new clients manually.
What are major accounting data entry challenges?
Accounting professionals and data entry clerks scan documents and input numbers day in day out. While it is possible that they input more data compared to other professions, they have their own challenges. Some of the major challenges are:
Time Consumption –
Data entry consumes a lot of time. A professional has to first go through stacks of receipts and ledgers to comprehend the data. Then he has to devote endless hours to enter that data into the system.
Error-prone Process –
It is a monotonous task having a great risk of human errors. There are numerous things like missing documents, faded receipts, illegible handwriting, and typing errors that contribute to an increased risk of errors.
Regardless of the reason, an error can cost your business dearly. You may end up losing a large business client or may even face a lawsuit because of an error.
.Manual data entry costs you a lot. You are required to hire enough operators to be able to enter all the data that is being generated by your business. Besides their salaries, you also need to purchase computer systems for them to work on. This further demands a dedicated IT and networking team to ensure all your systems are up and running.
Sudden Influx of Work –
Data entry tasks suffer huge setbacks due to a sudden surplus of work. Annual events like tax season can be inimical to your organization if you do not incorporate automated solutions for data entry.
If you have a small team of accountants, it will be under huge pressure due to enormous work. That further increases the errors in the data entry process.
Why is automation the need of the hour?
Accounting is an important aspect of your business. How you manage various accounting processes has a huge impact on the overall performance of your business. However, processes like data entry are time-consuming, error-prone, and expensive. Therefore, you need to look for solutions that make such processes efficient, and as a result, enhance the productivity of your organization.
Automation is one such solution that addresses this particular need. It helps you save a significant amount of time and capital. Automated solutions like Optical Character Recognition (OCR) and automated data entry software streamline your data ingestion processes. They increase data entry speed and precision.
Automation enables you to record data in more modified forms like spreadsheets, databases, files, etcetera from difficult data streams like pictures, written records, PDFs, websites, texts, etcetera. Tax compliance and bank reconciliation also become so much simpler with automated data entry solutions.
Thus, automation solves all the major problems you face with accounting data entry and transforms your business.
What are the top ways to reduce accounting data entry and start automating?
The following are the top 7 ways in which you can reduce accounting data entry through automation, without hurting the financial systems of your organization:
Identify commonly used procedures
Closely observe the accounting process of your organization to identify areas that require modifications. Find out what decisions are taken regularly. Study how your end-of-year survey works. Look for other commonly used methods or procedures. This will help you design a roadmap for automating data entry in your most utilized accounting operations.
Search for the best-automated data entry software
Once you are ready with your plan, you need to identify the best available automated data entry software. It is a very crucial step towards achieving complete automation in your accounting data entry. You must have a core accounting software application, unlike Excel. It helps you achieve complete accounting automation.
Then, look for a sophisticated data entry tool like QuickBooks data entry. It will help you update the automation automatically. With such a tool at your disposal, you can set up annual costs or invoices.
Data migration and alteration
Having picked an automated data entry software, you can start transferring your data. Some software facilitates data migration services too. You can inquire about all such services before you finalize a data entry software for your business. Finally, chalk out a data migration strategy that successfully identifies what data you require to move and how you are going to archive old data.
Before moving further, you must let your finance team completely adjust to your core accounting software. Allow some time for the team to understand the ins and outs of the new software. Moving ahead with the further automation process may result in chaos and frustration. You can ask your service provider to step in and help smoothen the adjustment process. They have robust help libraries to help you and your team get familiar with the tool quickly.
Identify further automation requirements
Your core accounting data entry software acts as a base over which you can build your own accounting automation suite. To accomplish that, you will need to recognize additional applications that address your major pain points.
For example, you may have addressed the recurring expense problem of your accountants with your main software. However, purchasing approval may still make your managers pull their hair. That’s when you need to identify additional automation tools that cater to such problems.
Integrate and test additional automation tools
Having identified all the additional tools for further automation, you need to integrate and dry run them to see how well they function. Before rolling out the tools to your entire team, allow your team leaders and managers to spend a good couple of weeks testing as many functionalities as possible.
The process is important for you to determine if the tools work in line with your expectations or not. It also becomes easier for you to roll back or repair the tools before your entire team adapts to them.
Relay the information
Now that you have invested your money into various automation tools, you will need your employees to use the tools appropriately. This will ensure that these tools are assets and not liabilities and that they add value to your system.
Organize sessions to make your employees aware of the modifications and how they affect them and the entire business as a whole. Provide an overview of all the automation tools and define a proper channel to help your employees get answers to their questions.
Also, motivate people to put out their queries publicly. This will help others to quickly acclimatize to the tools and reduce the number of transactional questions.
Closely monitor the system
Having rolled out all automation tools across your accounting processes, it is time for you to closely observe the performance. Keep a close eye on how your people feel about the new, automated system. Ask them if all the issues you identified initially are being addressed or not. Track the time your team is taking to complete basic as well as complex tasks.
Observe the changes in the quality of your data and the number of errors. Ideally, the quality should improve while the number of errors must decrease. Also, identify financial redundancies and inappropriate expenditures.
While you may start observing some of the benefits immediately, others may take some time. Keep a track of all the aspects and try not to jump to conclusions too early.
Automation not only brings technological sophistication into your system but also enhances its efficiency and productivity. Automating the routine and repetitive operations involved in accounting data entry eliminates all the pain points and optimizes your overall business process.
It also minimizes human inaccuracies such as typing errors and incorrect data entries. Not to forget the significant time it saves by speeding up your processes. You can invest that time to improve other aspects of your business and boost customer satisfaction.
If you are looking for a state-of-the-art solution that can help you get rid of all the major problems associated with manual accounting data entry, start automating it with QuickBooks data entry software. You may try hosting one with Sagenext. Their superior services ensure you start automating your accounting data entry processes smoothly.