Up to this day, many accountants spend large amounts of time manually processing invoices, registering taxes or updating their books. It is a lengthy and time-consuming process, which is why many companies have turned their attention to automating the accounting process.
Automation helps accountants save 52 days per year, by simply automating repetitive tasks. This includes automating tax processing, invoice management, and bookkeeping, using accounting automation software. If you are not sure what accounting automation software is or how it can help your business, keep reading and let’s find out!
In this blog, we will explain what accounting automation software is, discuss the different types, and present you with a list of some of the most efficient software for accounting automation on the market.
What is Accounting Automation Software?
Accounting automation software is a digital solution that lets companies automate accounting processes. It helps accountants keep track of the company’s accounts payable and accounts receivable processes, but also keep track of the company’s profitability.
Instead of manually entering financial data and updating the books, accounting professionals can facilitate their job by passing these tedious tasks into the hands of automation – adhering to some of the best practices in AP. This way, the automated accounting system takes off a load of processing paper documents and minimizes the risk of invoice fraud, and lowers processing costs.
There are multiple types of accounting automation software, depending on the needs and goals of every business. While all accounting automation software fulfills the goal of facilitating the accounting process, some of them are a better fit for product-based businesses, while others only concentrate on automating invoice management, for instance.
If you’d like to get familiar with the different types of accounting automation software, keep reading!
Types of Accounting Automation Software
As previously mentioned, there are multiple types of accounting automation software. Some are more general, covering mainly the bookkeeping process, while others are more inclined toward invoice or payroll automation.
Let’s find out together the different types of accounting automation software!
1. General Accounting Software
Also called core accounting software, this type of accounting software handles the fundamentals of tracking and balancing a company’s accounts. It uses automated data entry, making it easier for the financial department to share data between databases, while also ensuring no data is lost in transition.
General accounting software covers three major functions:
- General ledger: a complete record of all transactions of a business, which allows it to automatically send data to the ledger every time a transaction is performed.
- Accounts payable: a record of the short-term debts a business owes to its suppliers or creditors. An automated accounts payable process helps send the payments when they are due, keeping the debts balanced and paid on time.
- Accounts receivable: a record of the debts a business is entitled to receive from its customers for goods or services. If automated, this process helps collect payments automatically and apply them to pending balances.
2. ERP Software
Enterprise resource planning (ERP) software is built for businesses that wish to manage their assets alongside their finances. It helps manage and keep track of human resources, materials, and production, in real time.
ERP software includes enterprise performance management as well, which helps automate the planning, budgeting, and forecasting of an organization’s financial results. This feature gives accountants a more accurate depiction of the business’s performance and facilitates bookkeeping.
3. Payroll Software
Payroll software helps businesses that want to manage their employees’ paychecks and taxes. It ensures that wages are paid on time and it accurately calculates the amount every employee is set to receive, without any human involvement.
In addition, payroll software automatically performs a currency conversion, in case organizations manage businesses or employees located abroad.
4. Inventory Management Software
This accounting automation software is best suited for product-focused businesses. It keeps track of stock in real time, assisting both accountants and inventory managers with performing their daily tasks.
Moreover, inventory management software automates the purchase order process and tracks the supply and demand rate. To make things even more efficient, the software alerts employees or managers of the expiration date of perishable items, so they can have an overview of the stock at all times.
5. Invoicing Software
Invoicing software often works hand-in-hand with accounts receivable, as it makes this process easier to handle, more efficient, and more accurate. Invoicing software lets users easily write and send invoices, so a company’s balance sheet is updated at once. As it features automatic data transfer, the invoicing software is especially useful for service companies, ensuring timely billing and payment for rendered services.
There are many great accounting automation software that add significant value to any organization. How do you know which one is best for your organization?
We have put up a list of some of the best accounting automation software, so you can see for yourself which one best fulfills the needs of your business. Let’s begin!
Best Accounting Automation Software
1. Klippa SpendControl
Klippa SpendControl is a digital solution for managing business expenses and processing purchase orders or invoices. It consists of an expense management and invoice processing module, which can be used separately or combined, and can be fully customized according to your needs.
Pros
- Both expense management software and invoice processing software in one platform
- Europe’s best OCR technology
- Send invoices via app, website, and email
- Store documents in the cloud for up to 10 years
- Up to 99% data extraction accuracy
- Robotic accounting with self-learning booking suggestions
- Digital approvals with a standard bookkeeping system
- Integrations with bookkeeping systems
- Integrations with ERP systems
- Automatic fraud detection
- User sync, single sign-on, and 2FA
- Two-way matching of purchase orders and invoices
- Business expense cards for maximized cost control
Cons
- Does not perform three-way matching, yet.
2. Nanonets
Nanonets is an automated data entry software, that uses AI and OCR technology. It is best used for capturing data and extracting information accurately. However, it has a hard time further processing or managing documents, after the data is extracted.
Pros
- Uses AI to scan and extract information
- Seamless integration with existing bookkeeping software
- Performs three-way matching
- Custom approval for every business’s needs
Cons
- No invoice generation module
- Does not perform tax estimates
- Cannot detect fraudulent documents or duplicates
- Only upload documents via email
- No user sync, single sign-on or 2FA
3. FreshBooks
FreshBooks is a bookkeeping platform that automates all accounting processes within an organization. From balance sheets to accounts payable, FreshBooks keeps track of all financial processes.
Despite their focus on accounting and financial reporting, this digital solution cannot be integrated within an already-existing bookkeeping system.
Pros
- Customizable chart of accounts
- Allows for expenses and asset tracking
- Automated bank reconciliation
- Scans financial documents and extracts important data
Cons
- Does not perform two-way matching or three-way matching
- Cannot check for fraudulent documents or duplicates
- No integration within an existing bookkeeping system
- No document storage in a cloud environment
4. Xero
Xero is an expense management software that lets companies digitally process and manage financial documents, without additional manual processing.
It is best used to facilitate transactions and create smooth communication between companies and vendors, therefore its main focus is set on automated invoicing and inventory management.
Pros
- Keeps track of payment statuses
- Document archiving
- Batch payment to multiple suppliers
- Monitors employee spending
Cons
- Lack of document variety processing
- Minimum currency supported
- Does not automatically detect fraudulent documents or duplicates
- Does not perform two-way matching
- No certainty for the accuracy of extracted data
5. Accounting Seed
As the name suggests, Accounting Seed is an automated accounting platform designated to facilitate financial processes in organizations. While it supports processes such as accounts payable or accounts receivable, Accounting Seed has a limited number of activities it can automate.
Pros
- Seamless integration into bookkeeping systems
- Stores documents in a cloud environment
- Able to set up digital payments
- Bank reconciliation
Cons
- No certainty for accurate data extraction
- Does not verify the legitimacy of documents
- Does not feature 2FA
- Lack of financial documents supported
6. Tipalti
Tipalti is an automated data entry system, specializing in accounts payable automation. Its OCR technology accurately extracts data from invoices, helping streamline invoice management and inventory management processes.
Pros
- Easy reimbursement process
- Integration with ERP system
- GDPR compliant
- Performs two-way and three-way matching
Cons
- Does not detect duplicates
- Does not provide 2FA or user sync
- Does not store documents after processing
Start Automating Your Accounting with SpendControl
Finding an accounting automation solution that checks all the boxes is hard, but not impossible. SpendControl can help elevate your business and automate many accounting processes.
These are just some of the additional benefits offered by Klippa SpendControl:
- Easily submit files via the Klippa app, website, or email. Submitting them in bulk is also possible, to reduce effort and maximize efficiency.
- Gain access to all past invoices, located in a designated cloud environment. Keep track of all invoices and be well-prepared for your next audit.
- Extract data, using AI-data extraction technology, which helps recognize details such as the invoice number, payment address, and even different currencies.
- Prevent fraud, with the help of a built-in analysis that detects duplicates and protects you from invoice fraud.
- Automate approval processes and improve your organization’s productivity course. Create fixed or variable invoice approval processes and facilitate the workflow of your business.
- Experience seamless integration with a variety of ERP or accounting software, such as NetSuite, SAP, Xero, and many more.
Are you ready to automate your accounting process with Klippa? Or do you just want to know more about our solutions? Then don’t hesitate to contact us or book a free demo below. Our experts are happy to help you!