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Over the years, a lot of people have set up their businesses in Dubai, perhaps because of the fact that its economy is flourishing and that they are likely to earn higher profits and returns here than in other places. There are different kinds of businesses that operate on all kinds of levels, but one thing that is common for all of them is that they need accountants.
Businesses run successfully when there is an interplay of different operations or departments such as those that deal with sales, marketing and advertising strategies, human resources, research, finances, etc. While it goes without saying that each of these has an important role to play in terms of determining how the company functions, they all can implement their ideas and strategies only when they have the funds to do so. In order to know how much money the company has earned (revenue) and how much money it can allocate to different departments after having spent it on payments, salaries, investments, etc., someone needs to keep a proper track of all the company’s financial transactions and analyze it to determine its financial state. This is where accounting comes into the picture.
Why is accounting important for every business?
Every company needs professionals to organize, record, and analyze all financial transactions and related data so as to prepare reports on the same. This is known as accounting. In other words, an accountant is responsible for compiling all the company’s financial data, organizing it into different categories, recording it, going over it thoroughly to derive an idea about the company’s financial situation, and preparing reports on the same. Besides this, accountants also help file tax returns, audit, prepare financial statements and activity reports, etc. These reports are highly crucial for a business since they provide an image of how it is faring financially, where it is spending too much and where it needs to allocate funds, how it can save money etc. and are also presented to tax collectors, auditors, regulators, investors, etc. Without the work of accountants, it would be difficult to take not only money related but also other kinds of decisions, since they all depend on company funds.
What is Accounting Automation?
It is well known that finances and accounting form the base of any business, and thus, it is very important to go about them with utmost care and precision. Over the years, many technological advancements have brought about many changes in how businesses are run, making almost every kind of work much easier and faster. There has also been a change in how accounting is done. Accounting automation refers to the use of advanced technology and artificial intelligence or AI to carry out the basic functions of accounting, such as maintaining records of all financial transactions, entering all the data, calculating and processing all the information with minimum to no errors. This not only minimizes human effort and eliminates the need to physically enter the same kind of data but also helps companies stay ahead in the competition while serving their customers to the best extent possible. Since it is not as time-consuming, is more accurate than human work, can store large amounts of data, is more convenient, and is also cost-effective, there is a growing demand for accounting automation softwares.
Accounting Automations That Can Help Save Time
It is true that the introduction of new technology has made accounting much easier and has reduced the amount of human effort required, but it cannot replace human work altogether. However, it is good to know that accounting automation can save a lot of time, and here is why:
- Optical Character Recognition: As an accountant, not only would you have to deal with financial data available on computer systems but would also have to deal with and organize different kinds of financial information on paper or in books. In order to systematically organize all this data and to store it securely on a single system, you would need to compile all of it onto a computer. If you have to manually enter all the handwritten data onto the computer, it will take a lot of time and effort. OCR or optical character recognition is a great way of accounting automation wherein the application or device would be able to recognize all the handwritten information and would be able to convert it into digital data onto the computer.
- Employee Field Tracking: Whether you have just a few employees or hundreds of them, you would need to keep track of when they clock in and clock out. Keeping a record of this on paper with reference to your field employees would be a tedious task. Installing time tracking applications on mobile devices would help them to clock in and out wherever they are, and you would be able to work on their payroll without having to worry about compiling large amounts of data.
- Automatic Invoices: As a business, you are most probably engaging in commercial activities with others, such as selling your products. In such cases, you would need to generate invoices that contain details of the purchase between you and the buyer. Instead of having to prepare invoices manually, installing programs that automatically generate invoices and send them to your clients on a regular basis is a good idea since it would save a lot of time as well as effort.
- Prepare Expense Reports: Depending upon the size of the business, there is a lot of information that is generated simply with respect to the company’s expenses, and this information can be in the form of physical or digital receipts, invoices, bills, etc. It is very important that all this data is recorded and organized systematically, so having an application that will allow employees to immediately enter this data and create reports would save a lot of time. For instance, there are applications that allow you to take photos of receipts, and the information will be added to an Excel sheet or other document. This will significantly reduce the amount of time you would need to spend on preparing expense reports.
- Expense Data onto Financial Statements: Every company is required to prepare its financial statements annually, half-yearly or on a monthly basis, and these financial statements need to include data about all the expenses as well. Manually entering all this data while preparing the financial statement can be extremely time-consuming, especially since there will be a lot of data regarding your company’s expenses. In such situations, accounting software that automatically adds expense data onto the financial statement is an example of accounting automation, which will save a lot of time as well as energy.
Accounting automation saves a lot of time when it comes to entering and processing data, calculating, analyzing, or verifying financial reports, etc., besides making it much easier to detect the smallest of discrepancies and fraud. The use of AI or other kinds of technology has made it much easier to go about different business functions or operations since it ensures greater accuracy, less time, and less effort on the part of humans, and it is the same with accounting. It is important when employing such technology, to ensure that it is updated and is safe since it would contain all the information related to your company’s finances.