Accounts payable, or AP for short, is the department within your business that’s in charge of handling money and accounts for suppliers, contractors, freelancers, and vendors. It’s your company’s financial housekeeper. Not only that but it also manages taxes so you can accurately track your business finances. If you operate a small business like a sole proprietorship or partnership, then you’ll probably have one account payable department. But if you have clients or other vendors that may require payments from time to time, then it’s likely you will have more than one AP department within the same company. With all the functions involved with automated accounting systems (AAS), it makes sense to implement them at the earliest possible opportunity to get the most out of them over time.
What is an Automated Accounting System?
An automated accounting system is a computer system that’s set up to handle the accounting duties of your business. The most common type of AAS is a software-as-a-service (SaaS) system. SaaS accounting systems are cloud-based solutions that you access through an internet browser. With SaaS accounting solutions, you don’t need to own, manage or operate any hardware or software to get them up and running. You can sign up for a free demo and see how easy it is to start tracking your business finances and taxes.
The Benefits of an Automated Accounting System
As a small business owner, you’re probably already aware of how important it is to keep accurate records. But what about the benefits of automated accounting for a company with multiple departments and vendors? – Accurate Financial Tracking – An AAS can help you keep track of your finances in a more precise way. – Improving Your Tax Effort – Automated accounting can also help you improve your tax effort by keeping better track of expenses and providing more accurate financial records for tax purposes. – Better Vendor Management – With the ability to view your vendor invoices from any device and assign individual due dates, you’ll be in a better position to manage your vendors and get paid on time. – Better Customer Service – Automated systems make it easy to assign customer service responsibilities and provide seamless support to your customers.
How Does an Automated Accounting System Work?
Your accounting system is essentially a software application that collects data from your business and stores it in a centralized database. With an automated accounting system, you’ll be able to view your financial information, such as sales, expenses, and cash flow, in one location. This centralized database will help your managers and accountants stay more organized and make decisions more efficiently. Most AAS also offers several software features, like inventory management, that can help small businesses grow and thrive.
Types of AAS
– Software as a Service – This type of AAS is hosted on the cloud, so you don’t have to worry about managing the hardware or installing any software. All you need is an internet connection. Popular accounting software platforms, like QuickBooks Online and FreshBooks, are our SAAS solutions. You can access your account data, including transactions, from any device with an internet connection. A lot of MSPs and other businesses use this type of accounting system. – Software as a Service – This type of AAS is hosted on the cloud, so you don’t have to worry about managing the hardware or installing any software. All you need is an internet connection. Popular accounting software platforms, like QuickBooks Online and FreshBooks, are our SAAS solutions. You can access your account data, including transactions, from any device with an internet connection. A lot of MSPs and other businesses use this type of accounting system. – SaaS Accounting Systems – SaaS accounting systems are the most common type of AAS. They’re hosted online and accessible from any device with an internet connection. This type of accounting system is convenient because you don’t have to manage any hardware or software. Popular accounting software platforms, like QuickBooks Online and FreshBooks, are SaaS accounting solutions.
Which type of AAS will you choose?
When you’re starting the process of implementing an automated accounting system, you’ll want to investigate what types of AAS are available. You can usually narrow down your options by the size of your business and your needs. A midsized to large business could benefit from a hybrid SaaS/SAAS system, while a smaller company could be better off with a SaaS solution. If you have a few different departments, you could go with a hybrid SaaS/SAAS solution to help you centralize record-keeping and view all of your financial data in one place. Another consideration is the type of data your system will store. Some AAS can store data such as customer information, inventory, sales, and expenses. Other systems, like accounting software platforms, can handle all of this data and more.
Developing a DAAS: The Setup Phase
You’ll want to start the process of developing your automated accounting system by identifying the department that would benefit the most from it. The accounting department would likely be the best candidate for a modernized system. After you’ve identified the right department, you’ll want to identify the areas of their department that would benefit from an AAS. Some key areas to assess include the ability to track sales, manage expenses, track taxes and improve the customer service experience. You may also want to survey your employees to gauge their opinions on the idea of an AAS. Employees are often the first ones to complain when they have to enter their data manually, so you want to make sure they feel comfortable and confident with the new system.
DAAS – The Development Phase
In the development phase, you’ll start with a Discovery Assessment, also known as a Needs Assessment, to identify the department’s key business metrics and what data is crucial to keeping track of. From there, you’ll want to create a Business Strategy and an Implementation Plan to help guide your implementation. In the Business Strategy phase, you’ll outline the goals you want to achieve, such as more accurate financial tracking, improved tax effort, and better management of vendors. In the Implementation phase, you’ll follow a step-by-step process to complete key implementation tasks. For example, during implementation, you may want to create a data model, get your data into the system, assign access and manage user permissions.
DAAS – The Maintain Phase
In the maintenance phase, you’ll want to identify key performance indicators (KPIs), such as the number of accounts payable transactions processed per hour, and track your metrics. You’ll also want to repeat your needs assessment to make sure your system is achieving the business goals you set out in the beginning. You can also use the data from your initial assessment to make improvements. To stay on top of your automated accounting system, you’ll want to conduct an annual check of your system and make any necessary adjustments. This way, your system will continue to be beneficial for your company.
Integrating a DAAS: The Wrap-up
In the wrap-up phase, you’ll want to test your system and make any necessary adjustments. You may also want to look at extending your system’s lifespan by upgrading to a more robust version. If your system is performing well and you’ve identified key metrics, you may want to consider upgrading to a more robust version. You can also decide on the future of your system by evaluating the options and choosing the best one for your company. When it comes to implementing an automated accounting system, there are many factors to consider. Making sure you choose the right system for your company is essential to a successful implementation. It’s important to select a system that has the features you need, such as the ability to view information about sales, expenses, and taxes.