Benefits of Automating Accounting Processes for the Manufacturing Industry

The manufacturing industry has taken gigantic strides in automating almost all its processes with robotics and nanotechnologies, taking it to never before reached heights. With the manufacturing sector running round the clock there is now an imperative need to ensure that other backup sections keep up with it. One of the key areas that this industry, albeit any industry relies on to know real-time the state it is in is accounting and finance.

While the manufacturing sector has zoomed forward at breakneck speeds riding on advanced technological innovations and state of the art systems, its accounting and finance procedures are often relegated to the background and still, rely on the traditional spreadsheets for data gathering and information. This is a drawback for manufacturing as it must have constantly updated data to make crucial assessments going forward.

In the highly competitive environment of manufacturing, decisions have to be taken at the speed of light if one has to stay ahead of its competitors. To keep up with changing global regulations and expectations of stakeholders, decisions have to be taken fast, like NOW. And this can only be possible when manufacturing business accounting is automated so that it can keep in tune with the constantly evolving manufacturing industry.  

Hence, when a manufacturing industry chooses to automate its accounting processes it stands to reap rich dividends. 

Here are a few of the ways that automate accounting can be done:

 Matching multiple transactions automatically – Manufacturing is a huge mix of global supply chains, tracking huge inventories and dealing with various divisions and inter-company matters. This is not only extremely time-consuming but error-prone too if done manually as it means laborious “ticking off” of millions of transactions. Instead by simply automating the process, all the matched items are eliminated in a moment leaving the un-reconciled items only to be dealt with. With such automated systems in place, accounting for manufacturing companies will become a lot less tedious and laborious. 

Continually validating account balances – The manufacturing sector today cannot afford to be bogged down with traditional accounting processes where preparation of balance sheets is an annual affair. Now account balances are required everyday to get an accurate position of a range of variables such as profitability of different business units, the output of production facilities and balance of currencies. All these are key parameters and data on them has to be received real time. This is only possible by automating manufacturing business accounting systems.

Streamlining Inventory Reconciliations through Automation – Inventory reconciliation is the backbone of the manufacturing industry and has to be constantly updated. However, conventional account procedures are not only very time-consuming, errors to are bound to creep in. Automating this process ensures accuracy and quality in high volume reconciliation of inventories while strengthening internal control processes.     

     Automating Journals Management – What generally slows down accounting processes is the number of layers of sanctioning authorities a journal passes through before it is validated. This movement itself works out to hundreds of man-hours before data is ready for processing. Manufacturing companies can have systems in place that can automatically create, approve and review journals and other constantly evolving data such as bank feeds and credit card statements. Thus recurring entries can be continually tracked and monitored for greater internal controls and quick analysis of data.

      Incorporating automation in Current systems – At the end of the day, all efforts to automate procedures of accounting for manufacturing companies will come to naught if they do not blend in seamlessly with the existing systems. Data integrity has to be ensured as well as zero error conversions for data imports from bank files and other sources. IT resources should run ad-hoc reports till the conversion is complete to verify whether the changing of files is accurate and on right track. Only then will the whole effort be worth it.

When the manufacturing industry is keeping pace with technological developments, it is essential that accounting and finance keep up with it to provide the necessary support and backup.

If you are looking for an expert team of accounting professionals to help you in transforming the procedures prevailing in your organization, get in touch with us at Cogneesol. We guarantee top of the line services to our clients. 

For more details, email us at info@cogneesol.com.