Introduction
Cloud-based accounting platforms have rapidly emerged as critical business infrastructure. By delivering software over the internet rather than via on-premise systems, cloud technology enables unprecedented flexibility, collaboration, and insights.
Now, purpose-built automation takes these cloud capabilities to the next level for streamlined accounting and financial management. Let’s explore what accounting automation entails, its business benefits, top use cases in action, and advice for successful implementation.
What is Cloud Accounting Automation?
Cloud accounting software utilizes the internet to provide access to financial systems and data from anywhere. This contrasts with on-premise solutions housed on a company’s local servers.
The cloud offers innate advantages for accounting and finance:
- Accessibility – Secure login from any internet-connected device
- Collaboration – Real-time multi-user access to centralized data
- Scalability – Cloud capacity expands instantly as needed
- Resilience – Data protected through cloud redundancy
Cloud accounting automation takes advantages further by using technology to automatically handle time-consuming accounting workflows:
- Integrations – Seamless data syncing between systems
- Notifications – Proactive alerts and approvals
- Reporting – Scheduled dashboard and statement delivery
- Reconciliations – Automated ledger matching and adjustments
- Process triggers – Workflows initiated based on set conditions
The combination of cloud flexibility and automation provides the foundation for strategic accounting practices aligned to business goals.
Key Benefits of Cloud Accounting Automation
Transitioning manual accounting methods to automated cloud platforms enables major gains across multiple areas:
1. Efficiency and Productivity
By codifying repetitive manual processes like reconciliations into automated workflows, cloud accounting dramatically lightens workloads. Staff hours previously lost to routine data entry can be redirected to value-added analysis.
Automation also enables new productivity capabilities not feasible with human effort alone. These include:
- Real-time reporting – Dashboards reflecting up-to-date business metrics
- Predictive analytics – Forecasting scenarios powered by AI/ML
- Rolling forecasts – Continuous alignment of budgets to actuals
2. Data Accuracy and Integrity
Manual data entry and re-entry is hugely susceptible to human error. But automated workflows apply systematized logic for greater consistency and precision.
Integrations between platforms also unite disjointed systems. Rather than re-keying data between accounting software and sales systems, for example, synchronization automates this busy work.
The result is a single source of financial truth reflecting reliable trends. Executive decisions stem from precise data rather than guesses.
3. Scalability
As transaction volume and user counts outpace current capacity, cloud accounting systems fluidly scale through instantly adding more cloud resources.
Automation ensures that existing accounting processes adapt to manage this increasing throughput without declining effectiveness or timeliness. Additional cycles rapidly integrate to match business growth.
4. Strategic Insights
With automation handling routine product tasks, finance leaders redirect focus to value-driven analysis such as:
- Determining business success drivers
- Exploring merger and acquisition impacts
- Evaluating expansion opportunities
Advanced analytics and business intelligence transforms raw accounting data into key insights for planning and strategy.
Top Accounting Automation Use Cases
Specialized software bots and algorithms now replicate human accounting workflows with far greater speed and precision. Here are some of the most impactful accounting processes being automated:
1. Reconciliation
Cloud accounting systems integrate with bank data feeds for automatic, hands-free reconciliation including:
- Loading latest cleared payments and deposits
- Matching entries to transaction logs
- Spotting and resolving discrepancies
- Posting adjustment entries
Continuous automated reconciliation saves hundreds of monthly staff hours while maximizing cash flow visibility.
2. Reporting
Static reporting loses relevance as soon as it’s distributed. But automation enables self-updating reports and dashboards reflecting real-time data.
Configurable bots refresh figures, calculate metrics, incorporate actuals vs. budgets, reformat presentations, and distribute on scheduled cycles without any manual effort.
Executives gain perpetual visibility rather than periodic snapshots. Forecasting and performance analysis stays relevant to the latest business momentum.
3. Invoice Processing
By linking cloud accounting to sales order and inventory platforms, bots can instantly trigger workflows such as:
- Recording completed orders and shipments
- Generating branded invoices and inserting order details
- Routing invoices to customers
- Posting transactions to appropriate ledgers
Integrated order/invoice automation accelerates cash flow while minimizing data entry.
4. Expense Processing
Expenses incurred outside the office often result in overlooked or delayed reimbursements due to manual data entry and submission.
Automation streamlines the entire process for remote workers:
- Snap expense receipts on mobile devices
- OCR tools extract key details from images
- Expenses pre-populate reports for manager approval
- Direct deposit reimbursements trigger automatically
- General ledger updates with no accounting effort
Implementation Best Practices
Migrating from disjointed manual methods to integrated automation represents fundamental change. Strategic planning focused on user adoption accelerates ROI:
Set Measurable Goals
Define quantifiable automation objectives so impact is trackable. Example metrics:
- Reduce billing cycle by 2 days via invoice automation
- Cut monthly reconciliation time from 8 to 2 hours
Prioritize High-Volume Workflows
Pilot automation on the highest transaction volume processes first. Achieving efficiency at scale has greatest initial impact.
Incentivize User Adoption
Encourage early enthusiast participation through promotions to catalyze engagement momentum. Recognize contributors advancing adoption.
Continuously Optimize
No automation regimen is perfect out of the gate. Monitor results and user feedback to identity improvement opportunities. Refine integrations and workflows to maximize value.
With a thoughtful roadmap centered on change management, automation turn manual accounting into a competitive advantage.
Evaluating Cloud Accounting Automation Solutions
According to Gartner, the market for Cloud Financial Close Solutions includes intelligent software solutions that:
- Automate core accounting processes
- Include key capabilities like reconciliation and transaction matching
- Operate predominantly in the cloud
Vendors are evaluated on ability to execute core functionality along with completeness of vision for market direction.
Leaders identified in their 2022 Magic Quadrant include:
- Workday – Unified cloud ERP with strengths across financial reporting and planning use cases
- Oracle – Deep capabilities for enterprise customers across regions and industries
- Anaplan – Specialized financial planning and analysis solution with global expertise
- Host Analytics – Strategic modeling and predictions leveraging integrated analytics
- OneStream – Flexible unified solution for wide range of accounting, reporting, and FP&A
Cloud-Based Accounting is the Consensus Future
Industry analysts and experts widely project accelerated adoption of cloud-based solutions. By Gartner’s estimates, 87% of new accounting purchases will be cloud software by 2025.
And cloud momentum goes far beyond software. The processing power, connectivity, and economy of scale of cloud infrastructure now deemed mandatory for modern business computing.
On-premise solutions hamstrung by lagging legacy tech will slip further behind without the real-time responsiveness that automation and true cloud delivery enables.
Conclusion – Automation is the Accounting Game-Changer
Transitioning core accounting functions like reporting, reconciliation, and transaction processing to automated bots promises tremendous efficiency and productivity gains.
Integrated automation also unlocks advanced capabilities – predictive analytics, instantaneous insight, continuous planning – unlocking strategic guidance for executives.
As disruption accelerates across industries, real-time financial visibility and controls are mandatory for managing performance. The numbers don’t lie — automation and the cloud provide the accounting foundation for competing amongst relentless change.
