Accounting software is constantly taking advantage of new and improved technologies including automation and artificial intelligence. But these are features that need to be understood and activated before they can be of use. To optimize your time and obtain the best results from your accounting software it’s best to aim for as much automation as possible.
Bank feeds have revolutionised the way we now reconcile our bank and credit card accounts. A bank feed just means that your bank or financial institution uploads your bank transactions into your software on a regular basis (usually daily). Even transactions from other applications like PayPal and Stripe can be set up to feed into your software. Having your transactions fed into your software removes the need for laborious data entry. The ability to quickly match transactions based on machine learning and on rules you set up, assists in speedier reconciliations of your data and more up to date information for your reporting. Some software allows for cash coding so even small businesses are not weighed down with intricate coding.
Creating bank rules that allow you to automatically match bank transactions is another way of speeding up the process. For example you might set up a rule that every time a description includes the term “Officeworks”, the expense is automatically coded to the stationery expense. Being mindful of using meaningful and identifiable bank references through internet banking can assist in getting the most out of your bank rules. There can also be an advantage in having a business credit card as these tend to highlight suppliers names in the transaction listing. Even recording transfers between your bank accounts and credit cards can be automated with bank rules. Regular loan payments, wages and drawings can all be set up using bank rules.
So utilizing these features in your online software enables up to date information hence more control over your time and your cash. But automation comes with a downside. When using rules or relying on machine learning there’s always a larger margin for error of mis-coding, and once an error is made it tends to repeat. So importantly, you should invest a little bit of the time you save into a quick review of your general ledger and profit and loss statements to identify and correct any errors. The rest of the time saved is all yours.
Other related blogs:
What are bank feeds?
Choosing the right accounting software
Author: Kay Giles
Email: kay@faj.com.au
