Automated accounting is an approach to maintaining up-to-date accounting records with the aid of accounting software. Business software of this type is often configured to allow for easy cross posting of receivable and payables, eliminating the need to enter multiple postings in order to keep accounting records in compliance with generally accepted accounting principles. Many of the more popular automated accounting systems can be adapted to suit the needs of the company that purchases the software, making it possible to create customized reports as well as make use of the standard report formats included in the software package.
The process of automated accounting can save a great deal of time when posting credits and debits. Rather than having to make entries in different books, as is common with more traditional methods, most accounting software packages are structured to allow manual entry of the transaction in one field on one page. From there, the software automatically relates the transaction to all other relevant records within the software package. Once the transaction is entered, the data will be included in any report generated that is structured to cover the date of that entry.
Along with simplifying the process of manually entering data into an automated accounting system, many bookkeeping software packages can be linked to credit card and bank accounts. By using the interface that is built into the software, payments can be remitted to vendors and automatically applied to the appropriate vendor account and invoice number within the accounting records. At the same time, customers may remit an online payment via links that the system includes with any electronic invoices distributed to those clients. By using the link to submit payment, the software automatically receives the payment, posts it to the correct customer account and invoice number, then routes the payment to the bank account specified by the end user.
Today, automated accounting is considered a basic component of most enterprise resource planning or ERP strategies. The secure features and the time savings can greatly increase the efficiency of the accounting team. In addition, the accounting software includes features that allow the generation and distribution of electronic invoices to customers is an extremely efficient tool. Using those features makes it possible to receive payments in a short period of time, either because the customer is able to approve the payment and mail a check in less time, or because he or she uses the option to submit an electronic payment. In either scenario, the company benefits from an increase of receipts on its receivables in a short amount of time, giving the business access to more cash in hand to manage the day-to-day operation.