How to boost productivity by automating your accounting

7 mins

April 06, 2022

By Panama Harris

Automated accounting: how does it work? Increase productivity by automating your accounting

“Time is money”. An age-old maxim that is ever more true for freelancers, who literally sell their time to their clients. A precious, limited resource, to be sure. But when you start off as a freelancer, it doesn’t just pay to be an expert in your field.

Whether you’re a developer, a community manager or a Head of HR, you need to wear the hat of both the salesperson and the chief administrator for your business. While both are accessory yet vital functions for your business, they can be time-consuming as well. What’s more, the time available to dedicate oneself to these tasks diminishes with every new mission that comes in for the month.

The good news is there’s new advanced technology out there that allows you to automate many of the accounting tasks necessary for freelance work. Routine work that adds little value to your business can now be handled by these management tools. So you can concentrate on what’s important: your company.

What is automated accounting and how do you set it up? Find out more in the article below.

Automated accounting: how does it work?

Before we get into good practices for productivity, let’s review your accounting obligations as a freelancer, including the ones that can be automated.

What sort of accounting is expected from freelancers?

Every freelancer has accounting obligations. Whether you’re a micro-enterprise, an individual enterprise or whether you’ve created a sole-proprietor company (EURL or SASU), accounting is unavoidable. These obligations include tasks such as:

Logging all collections and disbursements that will affect the holdings of the company in chronological order (purchases, sales, etc). Your general ledger gathers and organizes all this activity.
Registering and archiving various accounting documents that justify transactions (bills, payment receipts, etc.). Keep in mind this applies just as much to invoices you send as they do to those you receive. Also, be sure not to forget receipts for your purchases.
Creating an inventory at least once a year to monitor the existence and value of your active and passive assets.
Building out yearly accounting summaries, which includes a balance sheet, a profit and loss statement and an annex. These need to be drawn up for every year-end close.

If you’re an auto-entrepreneur, you benefit from simplified accounting requirements. All you need to do is keep an accurate ledger of payments and purchases (if you sell merchandise).

Why automate your accounting?

Accounting isn’t exactly your passion? Automating your bookkeeping tasks may not necessarily change your opinion about them, but it will certainly make you more efficient!

How does accounting automation work? It all comes down to a function called robotic process automation (RPA). What does that mean, exactly? Any repetitive tasks are taken over by a robot directly within the management software.

What kind of tasks can the robot handle? Various accounting processes can be taken over by robotization: accounting entries, categorizing expenses, synchronizing transactions, declaring social charges and VAT, sending out client reminders and even preparing balance sheets.

What are the benefits of automation? The robot essentially handles some of your accounting tasks in your stead. That means you don’t have to spend as much time on bookkeeping as before. Not to mention you dramatically decrease the risk of human error by collecting information automatically. You can rest easy knowing your calculations are spot-on from the start. Time saved, errors avoided: productivity gained.

Now that you understand how automation works, it’s time to put it to use for your business.

Increase productivity by automating your accounting

If you put off your accounting until the end of the month, you may be setting yourself up for a stressful time, between juggling work, stacks of receipts, and back-and-forths with your accountant. This is where automation can work its magic.

Rather than do all your bookkeeping at once, a few days - or, let’s admit it, a few hours - before deadlines, you could spend a few seconds every day doing it, and your accounting software would take care of rest. It’s quick work - and it’s work well done.

Preparing your accounting using your professional account

How? First step: find a professional bank account that allows you to do your bookkeeping, with the help of features such as:

Spending categorization In order to handle your accounting and make declarations (URSSAF, VAT, etc.), you or your accountant need to sort your business’ transactions into different categories. Thanks to robotization, any activity on your business account is automatically categorized, whether it’s expenses (food, transport, taxes, office rentals, etc.) or revenue (sales, reimbursements, or other revenue). If ever the category is incorrect, you can correct it in a click. Along the way, the algorithm learns and will better anticipate future similar transactions. Even beyond a purely accounting perspective, categorizing your expenses gives you a detailed view of your transactions type by type, allowing you to perform analyses of your business activity.
Matching email receipts Traditionally, every time you would make a purchase from your business account, you would have to think to store the paper slip in a dedicated folder for your accountant to access when the time came. If you ever forgot to store them, you had no other choice than to scan your account transactions to track down which line items were missing their proof of purchase. What if you could upload your receipts directly to the appropriate transaction, directly from your business account? You get a clear vision of which line items have their receipts, and which don’t (yet). Even if this step isn’t entirely automatic, you still save time. You can scan your paper receipts, so there’s no longer any need to hold onto the paper version: they’re certified by the app and have the same legal value as their paper counterparts. That’s already a step up, but it’s possible to take it even further. With Qonto, you can assign the right receipt to the right transaction automatically. And rather than needing to download receipts as attachments so you can add them in your business account app and attach them to the correct line item, all you need to do is forward your email receipts to your dedicated email address. The robot will simply scan the email receipt for the pertinent information and attach it to the right transaction - automatically.
Automatic VAT detection One of the more common accounting tasks out there is VAT declaration. As a freelancer, this applies to your business if you surpass a certain threshold as a freelancer, or if you selected a different legal status. If you have an accountant, they’re usually the ones that handle VAT. You can help prepare their paperwork in this respect via automation. Once you upload your receipt to your business account, the robot can read the receipt and automatically detect VAT and the associated purchase amount. Two key pieces of information that will come in handy once your monthly or quarterly deadlines come around.
Accounting integrations Being able to natively integrate your receipts to their corresponding line item on your account statement certainly makes it easier to prepare the necessary paperwork for your accountant to handle. The good news is that you can also make this action automatic. What does that mean? It’s a computerized connection between your business account and your accounting software. Bye bye Excel exports. Your transactions and receipts are automatically collected. You’ll find them directly in your accounting software, without lifting a finger.

The end result of all this automation? A stress-free end to your month - everything’s already ready. You’re spending less time on your accounting, and you’re no longer sweating the deadlines. It’s handled.

Automating your accounting declarations with accounting SaaS

It’s generally recommended to use accounting software to efficiently manage your bookkeeping. How come? Using Excel spreadsheets to sort customer sales and Word documents as invoice templates has its limits. Using accounting software is easier and faster because everything is preconfigured - but more importantly you have every assurance that your business will follow every legal obligation to a T. Bonus: you can also automate those tasks for even more productivity.

If you prepared your bookkeeping in your business account, you’ve already gained some precious time. Thanks to its automatic connection to your accounting software, all your bank transactions and receipts appear there almost instantly. And automation can take the process even further to reduce your workload.

Automatic social charges and VAT calculation Whether it’s you or your accountant who performs this step, it’s undoubtedly tedious work. Once all your transactions are integrated into your accounting software, you have to take the time to calculate the amount in charges you owe the state. On one hand, you have the URSSAF social charges, and on the other, you have VAT, if you’re subjected to withhold it. Thankfully, your accounting software is capable of calculating these amounts for you. It can give you a real-time report of how much in charges and taxes you owe, thanks to its live integration of your business’ transactions. That’s great news for when it’s time to make your declarations, but it can also give you good visibility over the state of affairs along the way.
Automatic declarations Depending on what kind of charges you need to pay (URSSAF, VAT) you need to make monthly, quarterly, or even yearly declarations on the applicable website. But thanks to your accounting software, you can automate this task so it’s submitted on your behalf. No need to change interface, find your password, or question which fields to fill. Just sit back and let the robot do the work for you.
Financial projections Another way in which automation can simplify the running of your business: financial projections. Thanks to the data your accounting software collects, it can automatically generate graphs and tables for you to look over, without you having to manually enter the details. What’s more, it can use past data to better predict your business’ future. You understand what the next few months hold and can respond accordingly.

What are the best tools to automate your bookkeeping as a freelancer? Here’s our shortlist:

For a business account: Qonto, the professional account that boosts freelancers. You accounting tasks can run on autopilot, saving you time.

As for accounting software: these 3 tools are specially built for freelancers and allow you automate your accounting process. Freebe is for freelancers and micro-enterprises and our partner Acasi is there for all freelancers, whether they’re a micro-enterprise or a company.

We don’t usually get into freelancing to handle admin and accounting. Yes, it’s an obligation. But the process doesn’t have to be complex and long-winded. Thanks to the automation of your accounting, you save time on the repetitive tasks that bring no added value to your company. So you can concentrate on what’s most important: you business.

Looking to boost your freelance business? Start by getting a professional bank account that suits your needs.

Try Qonto for 30 days.

For free. No obligations.

Open a business account

ABOUT THE AUTHOR

Panama Harris

Panama is a Copywriter at Qonto with over 15 years' previous experience working as a freelancer around the world. Her mission is to take the mystery out of entrepreneurship and make it more accessible.