Jessica Veiga
Still wondering what automated bookkeeping actually means—or why everyone’s talking about it? You’re not alone. Many accounting pros aren’t totally clear on how it works or why it matters.
Here’s the reality: firms that adopt automation see up to a 40% reduction in time spent on manual bookkeeping tasks, according to a McKinsey report on automation in finance.
In this quick guide, we’ll break down what automated bookkeeping really is, how it works, and how your firm can use it to boost efficiency without blowing up your current workflow.
What Is Automated Bookkeeping?
Automated bookkeeping uses machine learning to automate accounting processes through software, reducing manual data entry and human oversight. While some tasks still benefit from a human touch—depending on firm complexity and preference—automation can enhance nearly every part of the workflow, from capturing and reviewing data to interpreting it.
The easiest way to understand how automated bookkeeping works is to break it up into its different subsets:
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Categorization: Machine learning technology performs transaction categorization. Instead of only applying basic rules, machines can consider hundreds (or thousands) of variables...at the same time! The use of automated bookkeeping results in greater accuracy and efficiency in accounting applications.
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Investigation: Machine learning tech can validate transactions, verify them, and then provide an idea of confidence level. It can even give feedback about unknown transaction activities and make suggestions about uncategorized transactions.
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Transaction enrichment: Without contextual information, it can be difficult to understand exactly what a set of data tells you. Automated bookkeeping relies on machine learning audits, which provide insight into old and new transactions for an easy overview of information. Eventually, client check-ins become deeper and more accurate thanks to parsed information from bookkeeping software.
Automated Bookkeeping Best Practices
Put a person or team in charge of supervising back-end aspects of the software or program.
The benefit of automation is that it frees your team up to focus on tasks they usually wouldn't have time for. With that said, it's important that you assign someone the task of overseeing the automation in general. We’re not saying you need someone to oversee your bookkeeping automation on a full-time basis — although you certainly could! The point is: someone should have a thorough understanding of how and why your automation system works.
Roll things out slowly, and educate your team.
Don't overwhelm your team with a landslide of changes overnight. Help educate them throughout the automation integration process. A thoughtful implementation plan can help your team succeed with automation. Be sure to ask your automated bookkeeping provider for help in this area; they probably have some great resources to pass on to you!
Start by automating processes you already use.
If it doesn't exist, don't fix it! Or rather, don’t create a process for the sake of automating it.
Work on using automation to solve problems you're already dealing with before you jump into shiny new tech. It might feel difficult to wait, but we promise that focusing on the present will pay off in the long run. Automate something you already have to do on a regular basis, like payroll.
Make sure your strategy for introducing automation aligns with your accounting firm’s goals.
As with any business decision, you should make sure that the direction you take with automation fits with the rest of your business goals. There’s no use in adopting automation if it’s not going to do anything for your firm’s growth!
Choosing the Right Automated Bookkeeping Platform: Features to Prioritize
You have options when it comes to how you want to automate your firm's bookkeeping. And while the ideal automation solution looks a little different for everyone, there are some features we suggest prioritizing in your search:
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Accounts payable/accounts receivable
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Bank reconciliation
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Billing and invoicing
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Cash management
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Collections
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Expense tracking
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Fixed asset management
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Payroll management
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Revenue recognition
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Reporting
How to Integrate Automated Bookkeeping into Your Firm: A Step-by-Step Guide
Ready to start using automated bookkeeping in your firm but not sure where to begin? The good news is that many manual, time-consuming tasks can be automated with the right tools—no major overhaul required.
Here’s a step-by-step breakdown of where to start and how to make the transition seamless:
Step 1: Automate Expense Management
Manually sorting through receipts and categorizing expenses? That’s a task automation can handle in seconds. Tools powered by machine learning can scan receipts, pull relevant data, and match it against bank or credit card transactions—then auto-categorize expenses based on learned behavior. No more end-of-month chaos.
Step 2: Streamline Payroll
Payroll is complex, but it doesn’t have to eat up your team’s time. Automated payroll systems can calculate wages, manage deductions, and handle tax filings without constant human oversight. Bonus: Employees can access pay stubs, submit timesheets, and update info through self-service portals, reducing back-and-forth with your team.
Step 3: Simplify Payments and Invoicing
Accounts payable and receivable are ripe for automation. Automated tools can send and collect recurring payments, track due dates, and flag unpaid invoices—making cash flow management faster and more reliable.
Step 4: Upgrade Practice Management
Don’t stop with bookkeeping. Many practice management tasks—like assigning tasks, sharing documents, setting reminders, and sending client communications—can also be automated. This keeps your firm organized, efficient, and client-focused without the administrative overload.
Automated Bookkeeping Can Become a Pillar of Your Accounting Firm
Automated bookkeeping isn’t just a nice-to-have; it’s quickly becoming the standard for modern accounting firms that want to stay competitive, efficient, and profitable. By streamlining repetitive tasks, reducing errors, and freeing up your team’s time, automation helps you focus on what matters most: your clients and your growth.
Ready to see how automation can transform your firm? Talk to Botkeeper to learn how our AI-powered bookkeeping solution can help you eliminate manual work, scale smarter, and deliver more value to your clients—without burning out your team.
