We read numerous articles that talk about how technology is impacting the accounting functions of companies. We hear that if companies don’t keep up with technological advances, they will fall far behind the competition or even fail.

I did not really understand what this meant until I started my own virtual CPA firm last year and began licensing new technology to support my firm and clients. As such, I wanted to share several ways to improve and automate your company’s accounting function:

1). Implement a cloud-based accounting system

The first step is implementing a cloud-based accounting system. This is the future of the accounting function, and desktop accounting applications will be left in the dust in a matter of years. My firm uses Xero (pronounced “zero”) as a cloud-based accounting solution, and we also implement it for clients.

I like Xero because it allows me to collaborate with my clients in real-time about any accounting issue that arises. We can leave notes for each other in the software at a transaction level or on a specific report, which eliminates the additional time needed to have meetings and phone calls to discuss these items.

Second, Xero is easy to use, and its reports truly are beautiful. It is also super easy to customize a report, group certain accounts, and you can even add custom formulas to each report (for example, gross margin %). Third, Xero uses dashboards to help you make quick decisions based on data around cash flow, receivables and payables.

Finally, the biggest reason I like Xero is because it has an application marketplace where you can license other software that integrates with Xero. Examples categories of integrated software include inventory, payments, CRM, time tracking, invoicing + jobs, point of sale, payroll + HR, eCommerce, reporting, bills + expenses, and so much more!

With Xero, you can either license the software yourself, and invite an advisor in to do the work, or the advisor can foot the bill and include it in a monthly fee for services.

2). Use financial document automation

Financial document automation, simply put, has revolutionized my clients’ businesses.

They can import a receipt or other financial document into the cloud by taking a picture of it from their mobile phone or tablet. They can also email the receipt or other financial document to a customized email address or add it from their computer desktop.

The software then runs optical character recognition (OCR) technology in the cloud and pulls out key data from the receipt or other financial document. You can then set up rules to take this data and push it into your cloud accounting system. Once you import the receipt or other financial document into the cloud, you can throw it away. You will NEVER have to keep paper receipts in filing cabinets anymore.

If you are ever audited by the IRS, you will always have the receipts and invoices for backup and can pull them whenever necessary.

The software my firm uses for receipt automation is called Hubdoc. I like it more than other similar software because it can pull bank statements, cell phone bills, and other financial documents from vendors automatically.

3). Manage and automate receivables and payables

There is a phenomenal company out there called Bill.com that helps automate receivables, payables, invoices, and payments.

You can pay and process bills in a short amount of time, and it can make payments by check or ACH. You can also send invoices through Bill.com and accept payments by check, credit card or ACH.

The software reconciles transactions with Xero or other cloud-based accounting systems, which cuts out a significant amount of time reconciling payments to invoices. Also, all of your customer information and financial statement accounts sync between the accounting software and Bill.com.

Again, no need to keep paper copies of any invoices or bills anymore. You can always jump back into the software to retrieve this data.

These are just three simple ways to improve your company’s accounting function, which will give you immeasurable benefits in terms of efficiencies gained. The challenge now is keeping up with all of the new groundbreaking technology that can further improve the accounting function, which continues to come out at a very rapid pace.