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(2022) Automated Bookkeeping Tools & Best Practices
Manual bookkeeping can be tedious and time-consuming. However, keeping your financial accounts up-to-date is an important task for any business to complete. Why?
Poor bookkeeping can lead to financial disaster, while good bookkeeping can help a business stay organized and make informed decisions. Bookkeeping helps track expenses and income. This information is essential for making sound business decisions.
Understanding your company’s financial health through proper accounting helps you more efficiently plan your cash flow budget. Moreover, good bookkeeping can help a business qualify for loans and other financing options.
Despite this, mundane bookkeeping tasks can eat up your time and stop you from focusing on running your business. That’s where automated bookkeeping tools can help your business out. These accounting automation tools cut out those irritating, time-consuming tasks that make bookkeeping such a difficult job. Ultimately, these automation tools help you cut down on your accounting costs in the long run.
At SynkBooks, we believe bookkeeping should be a simple and hassle-free process for all small businesses. That’s why we’ve developed an accessible suite of bookkeeping tools to make tracking your expenses and preparing for tax time an absolute breeze. We’ll introduce them to you alongside some other useful tools later on.
What are the best automated bookkeeping tools out there? How can they help optimize your data entry and report generation? What are some best practices for using bookkeeping automation for your small business?
In this article, we’ll explore the best automated bookkeeping tools for your small business and give our best tips on how to use these tools to optimize your accounting workflow in your small business.
Why do you need automated bookkeeping tools?
Bookkeeping refers to the composition and maintenance of accurate and up-to-date records of all your financial transactions – known as ledgers. This includes tracking your sales, expenses, loan payments, deposits, payroll etc.
In the old days of bookkeeping, accountants would meticulously update their spreadsheets by hand. Remember, collecting and categorizing each piece of financial information and handling each data entry manually is extremely time-consuming.
Luckily, those days are over and automated bookkeeping tools exist to streamline this process and use AI to do the heavy lifting for you. Here are some of the most notable advantages of bookkeeping automation:
- By automating your bookkeeping, you reduce the chance of human error and mistakes. For example, bookkeeping software that is correctly configured is extremely unlikely to fill in an IRS form incorrectly – eliminating the risk of costly penalties.
- Automated bookkeeping software gives you access to real-time data. As your transaction data is handled immediately, there’s no need to wait for a bookkeeper to complete your accounts. This allows for real-time insights and instant reports.
What Automated Bookkeeping Tools do I need for my small business?
Let’s introduce you to the best bookkeeping automation software for small businesses:
Automated Expense Categorization Tool: SynkBooks
One of the most tedious responsibilities of a bookkeeper is organizing expense entries into set, distinct categories. This is especially true if you need to retroactively categorize past entries.
However, well-categorized bookkeeping allows your small business to understand where your funds are being spent – affording you the ability to better manage your cash flow budget.
SynkBooks' custom bookkeeping services are the best way for you to easily and quickly categorize your transactions. In addition, we also offer outsourced bookkeeping services, and our team of expert bookkeepers can look through your accounts and sort them into distinct categories.
Synkbooks is a specialist bookkeeping service provider that also offers a web-based bookkeeping tool that helps you keep track of your income and expenses.
These categories include, but are not limited to:
- Account statements
- Credit card receipts
- Unpaid & Paid
- Capital contributions
- Non-taxable deposits
Prefer to do it yourself? SynkBooks' standalone bookkeeping software includes an AI-trained categorization tool.
By automatically sorting your financial information into the exact categories the IRS is looking, SynkBooks also helps you get ready for tax time.
It’s easy to get started with SynkBooks. We’ll ask you a few short questions about your business and our tool will automatically assign your business to an IRS category.
Then, once you’ve connected your bank account, the SynkBooks AI will get to work scanning and categorizing your expenses for you into distinct categories understood by the IRS.
SynkBooks' AI tool can understand your financial records with up to 92% accuracy. Need a 100% accurate service? We recommend our outsourced services for that.
Once you’ve imported and organized your financial records, your SynkBooks team will continue to process & categorize your bank transactions as you go along.
What other tools does SynkBooks provide?
Aside from an expense categorization tool, Synkbook also allows you to generate profit/loss reports and even auto-fill tax forms!
As mentioned before, the best way for your business to stay on top of your accounts in to use SynkBooks' outsourced bookkeeping service.
SynkBooks' standalone bookkeeping software starts at $15 a month – giving you access to everything listed above. This is significantly less expensive than other options – making our tools perfect for small businesses, startups and partnerships.
Starting at $200 a month, we recommend letting our professional bookkeepers deal with your expense record categorization with our
With this plan, a SynkBooks’ accounting team will take over your bookkeeping and/or tax preparation and get you started with a fresh start. We’ll also meet with you every month to make sure your bookkeeping is on track.
Receipt Scanner: Expensify
Handling both paper and digital receipts can be unwieldy, making it difficult to track what your business has been spending. That’s where an automated receipt management tool can help.
Expensify is a cloud-based receipt scanner and expense management app that bills itself as the complete package for tracking expenses. Here, we’re most interested in Expensify’s one-click receipt scanning tool.
With the Android & iOS smartphone app, you can snap a photo of any expense receipt and their SmartScan technology will automatically capture all the details in an expense report. This information can be analysed through Expensify’s expense ledger or be exported to your bookkeeping management dashboard of choice.
A recent innovation from Expensify is their Expensify Debit Card. This removes the need for paper receipts altogether and will automatically track and log your expenses each transaction.
What other tools does Expensify provide?
Expensify has been slowly diversifying its services over the past few years. Now, you can sync tax rates from your accounting software and track sales taxes & VAT accurately.
As part of their expense tracking, the app has always allowed you or your employees to track mileage expenses. But now, their Concierge Travel feature helps you access medical advisory information, emergency transportation, and additional travel risk services. If you’re using the Expensify card, this travel management suite is free!
Expensify’s base plan is free. It offers your entire team Expensify cards to track and reimburse expenses and pay bills.
Their Collect plan unlocks custom coding, accounting integrations, and expense approval. This starts at $8 per month per user. For access control and multi-level approval, you’ll need the Control plan. This costs $18/user/month.
Given that, you can save 50% on paid plans by bundling it with an Expensify card. Remember, applying and using an Expensify debit card is absolutely free!
Payroll Automation: SurePayroll
Tracking and calculating your payroll for your small business is vital to ensure your employees are paid on time and correctly. However, manual payroll calculation is a tricky and time-consuming process.
An automatic payroll tracker and calculator are helpful here – ensuring your employees’ pay is correct and that payroll is run on time. Our top tool for this job is SurePayroll.
SurePayroll can automatically track employees’ hours through their integrated time clock and calculate their pay.
Then, their automatic payroll tax calculator will figure out how much local, state and federal taxes will need to be paid at the end of every payroll period and automatically file this for you.
Through the web app, you’ll be able to see a real-time up-to-date payroll summary and generate customizable reports. Then, when payroll needs to be run, SurePayroll will do this automatically.
All their automated filing services come with a payment, calculation and filing guarantee. That means that if SurePayroll is at fault for any tax penalties, they’ll resolve and pay them for you – without any risk to you!
SurePayroll’s pricing plans start at $19.99/mo – plus $4 for each employee. However, it’s important to note this plan doesn’t include tax filing.
For the full-service plan, SurePayroll is asking for $29.99/mo plus $5 per employee. Given that, both plans do include live support as standard.
Best Practices & Tips for Automating your Bookkeeping
Here are some of our top tips for getting the most out of bookkeeping automation tools and AI-enhanced automated accounting.
Consider whether the task should be automated
Remember, not every bookkeeping task is best left to an automated tool or AI. In general, automation is more suitable for small, tedious and repetitive tasks that require data entry, calculations, tracking repeatable transactions or tasks that can be handled by API calls.
Many finance and accounting decisions will need to be made by you, your accountant or your finance manager. Any task that needs human input or human interaction should best be left to a real person.
Why? Real accountants are able to use their “creative touch” to come up with solutions and optimizations for your small business.
In general, you should never exceed the so-called 80/20 split. This rule states that 20% of your bookkeeping and accounting tasks should never be automated. But, we recognize that small businesses can’t always hire a full-time accountant for these jobs.
That’s where using an outsourced accountant or bookkeeper can solve your problems. At SynkBooks, we offer an outsourcing option for your bookkeeping needs. If you’re interested in how using an outsourced service provider can help your small business, check out our blog post on accounting outsourcing here.
Use cloud-based tools instead of local software
Even for small businesses, the volume of financial data can quickly eat up a hard drive or network space. Keeping all of your transactions on one locally stored spreadsheet will also be extremely difficult to search through and share with colleagues or partner firms.
That’s why it’s particularly useful to use a cloud-based tool to track expenses and keep accounting records. With a cloud automation SaaS tool, you’ll be able to access your records anywhere on any device.
Moreover, this adds an aspect of location redundancy. If your hardware fails or if there’s a fire at your premises, your important financial information is safely stored in the cloud.
Regularly monitor your books and financial accounting tools
Whilst accounting automation tools are extremely helpful and can save you a considerable amount of time, no AI tool is perfect. SynkBook’s expense categorization tool is one of the best in the business, but even that is not 100% accurate (92% in fact).
Luckily, these automation tools make it easy to manually correct any errors. For instance, you can re-assign any incorrect categorization in SynkBooks within a few clicks.
Our best practice tip here is don’t leave automation tools to complete their job without any input from you. These automation tools are designed to help bookkeepers and small business owners optimize their bookkeeping workflow. They can’t entirely replace bookkeeping responsibilities; they only enhance them.
Discover the joys of custom bookkeeping services
Here at SynkBooks, we believe that bookkeeping and tax preparation should be as simple as possible. That’s why we’ve developed a brilliant standalone bookkeeping platform and also offer personalized outsourced bookkeeping services for your small business.
Our standalone accounting and bookkeeping software costs $15 a month. This includes:
- The previously mentioned AI-powered expense categorization helps you understand all your spending.
- The ability to automatically sort your financial information into the exact categories the IRS is looking for in your tax returns.
- The ability to automatically import your bank and credit card transactions and easily create unlimited expense entries.
- A beautiful report generator for profit & loss and tax-time ready reports.
This brilliant software suite is designed for do-it-yourself bookkeeping. If you don’t think you need to outsource your bookkeeping just yet, this is a great option for you.
However, it’s our custom bookkeeping services that offers the best help for your small business. These plans start at around $200 a month. A team of three professionals will:
- Categorize your income and expenses for you.
- Record your cash transactions
- Produce income statement reports
- And even represent you if you’re audited for no extra costs.
Your dedicated team will know exactly how to help small businesses like yours and will work with you throughout the year - getting you ready for tax time!
Access Your Own Bookkeeping Team Today!
It’s easy to get started with SynkBooks! Simply head to app.synkbooks.com or get in touch with us today! We’ll ask you a few short questions about your business and your very own dedicated bookkeeping team will handle all your bookkeeping and tax preparation needs for you!