Data entry isn’t just tedious; it’s also prone to errors, and those errors can end up costing your company a fortune. Consider the 2017 crash of Amazon AWS, which was caused by a data-entry error by a debugging programmer and resulted in a $150 million loss for S&P 500 companies alone (and likely even more for the countless smaller companies that used the service). While that may be an extreme case, it’s a grim example of how a single, basic user error can wreak havoc on a wide scale.
The finance industry has been quick to embrace automation as a way to reduce the relatively large number of data-entry-driven accounting tasks. AccountingWeb reports that in the next few years, roughly 40% of common accounting and finance tasks will be performed by Artificial Intelligence (AI). But there’s no need to wait any longer to incorporate automation into your daily grind; hundreds of accounting programs, bots and plugins are already here and eager to help. Here are some of the most common accounting-related data entry tasks and the tools you can use to get rid of them for good.
1. Generating invoices
Depending on the size of your business, you may send anywhere from one to thousands of invoices out every month. Having to manually enter any significant number of invoices is time consuming, especially if you have a complex billing model. Luckily, you have several options for setting up recurring invoicing and generally simplifying your billing process.
- Zuora is a terrific system for businesses that use a subscription model, which includes practically all SaaS businesses.
- Smaller companies might want to try Wave; it’s not as robust as Zuora, but the basic service is free, making it a great place to get started with automated invoicing.
2. Inventory management
Businesses that sell a physical product face the often-formidable task of correctly managing their inventory. They must have the right inventory, at the right price, purchased at the right cost, and stored when and where it’s needed. There’s a lot of crunching numbers involved in getting inventory management right, and a single data entry error could put you out of business. That makes automating inventory management a high priority for product-driven companies.
Most general ledger systems have some kind of built-in inventory management, but they’re not all equally robust.
- Small businesses with significant inventory needs should consider Zoho Books, as this particular bookkeeping platform has the strongest inventory management tools of its class.
- Businesses that are large enough to need a full-scale ERP may want to turn to Oracle NetSuite; it includes a particularly powerful inventory management module.
3. Processing expenses and reimbursement requests
If your employees have a lot of reimbursement requests, you’ve got a potential data entry nightmare on your hands. Not only do the employees have to do tons of data entry to get the receipts into the system and fill out your expense forms, but then someone on the finance team has to process all those reimbursement requests and get them paid.
- Teampay does a superb job of minimizing data entry by essentially eliminating the reimbursement process through virtual cards (you can link physical cards to your Teampay account as well).
- To make handling receipts easier and more automated for employees, you can set them up with an app like Receipt Bank.
Guide to Payables Automation
4. Processing vendor bills
Taking care of the business’s bills is usually a two-step process. First, you have to get vendor bills into your general ledger system. And second, you have to issue payments in the correct amount by the time they’re due. Both steps involve a fair amount of data entry, and errors could damage relationships with your vendors or even cause a drop in your business’s credit rating.
- For a higher level of billing automation that won’t break the bank, consider a plug-in like Entryless.
- Circulus AP is an accounts payable platform that comes in enterprise and small business versions; the latter integrates fully with QuickBooks.
5. Bank reconciliation
Getting transactions from bank accounts and credit cards into the general ledger system can be quite a task. For businesses with tons of small transactions, such as many e-commerce businesses, manual bank reconciliation simply isn’t an option. Then again, given the kinds of disasters that could result from a bank reconciliation data entry error, businesses of all sizes and types would be wise to consider automating this process.
Automatic bank reconciliation is well supported by most general ledger systems.
- Small business bookkeeping platforms like Xero and QuickBooks automate bank reconciliation by connecting to your bank’s online system and transferring transaction records directly into your books.
- Larger companies can automate bank reconciliation into their ERPs with Cashbook.
6. Preparing payroll
Payroll is one accounting task that you really don’t want to mess up. Setting aside the disaster that could result from either overpaying or underpaying employees, a data entry error in your payroll processing could result in making the wrong federal and state withholdings and tax payments. That could get your business into a remarkably large amount of trouble very quickly. Since the math can get quite complex, calculating all the various employee wages and withholding amounts may require some level of automation.
- A business with just one or two employees can get away with fairly light payroll support, such as SurePayroll.
- If you’ve got more employees than that, consider outsourcing your payroll to a processing company like ADP. Most large payroll processing companies will guarantee your tax payments, meaning that if they make an error they’ll be responsible for the penalties, not you.
Automating data entry frees up valuable human resources for more complex tasks and significantly reduces the risk of user error. Once you incorporate automation solutions into your finance and accounting process, you’ll wonder how you ever managed without them.