How predominant is the role of automation in pre-accounting?
Dec 29, 2023
When we refer to the term ‘pre-accounting’ it is appropriate to envisage a new concept in the financial accounting arena. Behind the definition lies an unsaid story that needs to be retold and heard.
Usually, it is a norm for management to trust the financial data entrusted by their accounting team. Through this data business decisions, tax filing & compliance and future strategies are drafted. However, the accountants do not possess a magic wand to bring all the source documents in play such as bills, invoices, bank statements etc.
Hidden in the curtains are the laborious tasks of accumulation of financial proof of the business transactions. These data are collected, collated, coded and synchronized in order for real accounting to happen. All are not enthusiastic to ‘roll up their sleeves’ as it is a dull, tedious and persistent job without a learning arc. Yet, one cannot escape from this job because it builds the foundation for accountants to construct the edifice.
This process is called ‘Pre-accounting’, in common man’s parlance, it is an ‘old wine in a new bottle’.
Role of non-accounting and accounting team in Pre-accounting?
Since, pre-accounting sets the tone for accountants to perform their tasks, it takes a bulk share of manual tasks. The employees are inherently from non-accounting academic background doing menial tasks. Due to this it facilitates the possibilities of avoidable errors, accounting irregularities and fraudulent activities etc. Henceforth, it is understandable that pre-accounting takes priority in accounting.
Non-accounting tasks to be handled:
- Accumulation of vital information related to source documents.
- Checking & recording the information without violating the firms’ policy.
- Custodian of the documents in a safe place for future reference.
- Resolving issues related to the source documents due to discrepancies.
- Authenticating the collecting data with supporting documents (like bank statements etc.
Accounting tasks to be handled:
- Verification of all receipts/claims for compliance as per policy governance.
- Ensuring the documents have the approved signatories as per the firms’ hierarchy.
- Due diligence done of processing of claims in order to avoid fraudulent activities.
- Archiving confidential documents under lock and key.
- Retrieval of information for future audits or reference at any point of time.
Also read: How accounting firms can benefit from automation (or RPA
Where does inefficiency in ‘pre-accounting’ lead to?
It is now apparent that accounting solely depends upon the data provided by the team performing the pre-accounting tasks. Therefore, any form of discrepancies from their side has lasting repercussions to the accounting processes the data is fed into. Which can lead to
- Unproductive person-hours and wastage of resources
- Employees going through stress due to workload
- Opening the corridors for misappropriation of funds
- Leading to deficit budgets and not allocation of funds to meaningful projects
- Lacking accountability and compliance
- Audit trails leading to unhealthy work practices and tarnished reputation.
To construct feasible solutions for the challenges posed by pre-accounting is more critical for the business. Identifying those variables that disrupt the smooth functioning and selecting the right mix is the most crucial to stay float.
Many viable solutions were tried & tested but making a lasting impact is robotic accounting automation. The appropriate mix to keep the taps running in the firm is to automate ‘pre-accounting’.
How embedding robotic automation helps pre-accounting?
Robotic automation helps to automate the processes where errors are bound to happen. Through this it helps to save the reserves of the firm. Let us delve a little deeper into the subject, where automation bot has a role to play.
- Expense Statements:
Employees’ expense statement is a sensitive place where emotions run high due to a tussle between the HR and employee. The reasons are multitude in the form of
- Over claiming of the amount than the authorized policy limit.
- Not supported by backup documents.
- Late submission of the statements.
Since it takes time, money and effort, the management does not get the real picture of the money spent. In case of policy violation, it red flags and notifies the authorized person. Thus through automation bots, the team is alleviated from the problems and helps in tracking the expenditure and gaining control. - Reconciling corporate credit cards statements:
Again one more way of controlling corporate credit cards is employee spending. There is no need to wait for the statements at the end of the month. Through Robotic automation all the corporate credit cards are directly fed into the system and any transaction happening is monitored, reconciled and auditing becomes easier.
Additionally, if information on credit cards are synchronized with GL, then even that gets solved. There is more visibility both the finance and non-finance teams. - Expenses workflow automation:
In order to avoid any form of discrepancies, automating the workflow of expenses ensures compliance to perfection and flawless. Through accounting bots are able to confirm
- the submission of various documents like invoice, checks etc,
- red flag the duplicate submissions,
- eradicates expenditure misappropriation,
- configures the approval tiers and
- prevents overlapping by enacting policies and procedures.
- Financial reporting and Interactive Dashboard:
Since any form of discrepancies are prevented in pre-accounting stages through robotic automation. The real time dashboard helps to know the status of expenditure, helps tracking on expenses happening & avoidable zones. With this both the financial and management can show austerity measures.
Through this a vigil takes place and the documents presented to the audit gives us assurance of compliance.
Also read: How does Quickbooks online robotic process automation bots work?
From the above discussion we can conclude that pre-accounting automation does not fall on the category of ‘luxury’ product but a ‘needed’ product for building a better future for a firm.
Robotic automation of pre-accounting tasks could become essential for running an accounting operation. Our firm Integra Global Solutions has all the expertise to provide services at all stages of pre-accounting automation. Call us to allow our experts to help you provide an automation solution.
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