Accounting automation: How to start automating your workflows

Accounting automation leverages software to automate different processes that accountants perform. It’s used by accounting firms of all sizes to save time and focus on the highest value work.

A guide to accounting automation called 'Accounting automation: How to start automating your workflows'


  • Accounting firms use accounting automation to automate their processes—it saves them time and allows them to focus on value-driving work.
  • Manual accounting is too costly, risky, and time-consuming.
  • Automating your accounting firm’s processes will increase productivity, time savings, and efficiency.
  • Not everything should be automated—there are certain tasks where the return on investment (ROI) isn’t worth it.
  • Automation technology will not replace accountants, accounting departments, finance or accounting teams.
  • The right accounting automation tool is critical in realizing the benefits of automation.

Accounting automation is currently reshaping the accounting landscape:

Despite the increased noise about accounting automation, artificial intelligence, machine learning, and robotic process automation (RPA), robots will not replace accountants.

Instead, automation tools and generative AI will make you more efficient, save you time, and help you add more value to your clients and your relationships with them.

How manual accounting and bookkeeping creates risk and inefficiencies

While some accounting firm leaders find comfort in the sense of control they feel when manually completing accounting tasks, the risk can be severe. There’s a reason why automation is set to reach $9 billion USD by 2026 (29% annual growth rate). 

Here are the risks of manual accounting processes:

  • Prone to error: Manual accounting processes are prone to human error. And in an industry that is as reliant on real-time and accurate data as accounting, human error can result in time-consuming and costly fault-finding.

  • Time-consuming: A survey of business owners found that the two things most wanted from an accountant was a trusted advisor and quick communication. Spending too much time on repetitive tasks reduces the time spent on providing valuable advice and prompt responses.

  • Information falls through the cracks: Expending brain power on manual tasks means you’re distracted from your value-driving work. As a result, work can fall through the cracks. This means missed deadlines, communication breakdowns, and scope creep.

  • Poor data security: The biggest security risk to your firm is your staff. Human error accounts for 88% of security breaches. The more you can automate, the more you can reduce that risk.

How accounting automation benefits accounting firms

Leading accounting firms are saving hours by automating their accounting business processes. In fact, some firms are saving 16.5 hours each week, per employee. Here are some benefits of automating your manual processes:

  • Saves time: Automation can save you hours every week and improve your team’s productivity by reducing the manual inputs required to get work done.

  • Reduces errors: Automation reduces errors by removing—or minimizing—the human element. It ensures consistent and accurate work.

  • Enables you to focus on high-value work: Automation enables you to focus on  revenue-driving work. The time you save on manual tasks can be rerouted to advisory work, growing your small business, hiring, or even more family time.

  • Standardizes and streamlines your processes: Introducing automation will help you standardize your firm's processes. Because automation relies on structure, you will be forced to standardize your processes (and as a result, streamline them).

  • Improves security: Accounting firms are one of the biggest cyber attack targets. By automating your accounting processes, you’re protecting your firm and clients against harmful compromises.

Australian firm, DigitPro, saves 8 hours per week through automation. Learn more about their story.

Are there risks to automating accounting workflows?

No system is perfect. With accounting automation, there are risks to be mindful of before taking the steps to implement.

  • Incorrect setup: Any robust tool that is designed to automate your accounting workflows will require some setup. And often, you’ll only get out what you put in. Look for accounting automation tools that offer guided implementation options, resources, and plenty of free support content to help you set up and make the most of your automation.

  • Assuming correct results: Don’t assume the automation output is correct every time. It’s important to test and review the automation’s actions regularly to ensure it’s working as planned. One of the downsides of generative AI tools like ChatGPT is the fact that it can produce incorrect and biased information—so if you’re using generative AI to automate your processes, you must review what it produces.

  • Automating tasks that should not be automated: Not all tasks are easily automated. Sinking too much time into automating a high complexity task might not be worth the effort you’re putting in.

  • Overdependence on automation: It’s important to remember perhaps the most important element of your relationship with your clients: you. Too much automation may actually build barriers between you and your clients.

How to get started automating your accounting processes

Process automation starts with asking yourself some questions:

  • What should I automate?

  • What shouldn’t I automate?

  • Is now the right time to start automating my processes?

  • What results am I expecting?

  • Do I have the right tools to enable me to automate my workflows?

Watch: Advanced techniques for automating your workflow

What should you automate?

If you’re not sure which processes you should automate, here are some ideas to help you get started:

  • Low complexity tasks: Your firm’s simple and systematic processes are solid automation candidates. For example, you can automate your expense processing with tools like Dext and Hubdoc.

  • Highly repetitive tasks: Repetitive tasks are time wasters. Repeating workflows like periodic payroll are ideal for automation. Explore payroll processing templates to help you automate and streamline your workflows.

  • High value generators: If you’re going to invest time and money into automating a process, it should genuinely add value to your firm. Your client onboarding is a perfect candidate for automation. Canadian firm, Tabworks, decreased their client onboarding time by 80% thanks to automation within Karbon. They’re now doing real-time work within 5 business days from prospects enquiring about their services.

  • Forgotten or ignored responsibilities: If you’re struggling to find the time to tackle certain tasks, consider how you can leverage automation. Consider how you might save time by automating your content marketing efforts, for example.

Here’s a list of 10 time-saving automation ideas for your accounting firm.

What shouldn’t you automate?

Not every task is a good fit for automation. Here’s what not to automate:

  • Everything: Just because you can doesn’t necessarily mean you should. Not all your accounting processes need to be automated.

  • One-off, low-effort tasks: The effort required to automate irregular tasks isn’t worth it. Prioritize your most repetitive tasks first. This is where you’ll reap ROI.

  • High complexity tasks that require human judgment: If a task needs human judgment or decision-making, it shouldn’t be automated. However, the elements that don’t require that human element can be automated.

  • Tasks with low or no ROI: If you can’t genuinely foresee a worthwhile ROI by automating a task, it’s probably not worth your time.

  • Client and prospect touch points: Anything that requires a human touch is best done by an actual human. While it’s tempting to automate all client communication, it’s important to remember that your clients are your clients—not a robot’s.

A graphic in Karbon's guide 'Accounting automation: How to start automating your workflows' that lists what accounting processes should be automated vs. what accounting processes shouldn't be automated.
Not everything should be automated. Here’s what you should and shouldn’t automate at your firm.

Steps to automate your accounting firm’s processes

Broadly, there are seven steps to implementing, evaluating, and improving an automation process.

  1. Find a starting point: To choose the most appropriate processes to automation, create a matrix. On the X-axis is task complexity (easiest to hardest, left-to-right) and on the Y-axis is time to complete (quickest to slowest, top-to-bottom). Your top left quadrant will house your easiest and quickest automation candidates (you should spend your time here first).

  2. Set your success criteria: Set a concrete goal reflecting your business needs, ideally one that can be measured. For example, if you’re automating your tax preparation, your goal might be ‘reduce tax prep time by 50%’.

  3. Ensure you’ve got the right automation tools: Start by checking if your existing tools can automate your selected process. If not, you’ll need to search for something that can.

  4. Implementation and collaboration: Work with your team members to implement your automated process.

  5. Track your results: Always come back to the success criteria you established. Have you hit your mark? Why or why not?

  6. Refine and iterate: If you didn’t reach your success criteria, it’s time to make some changes. Review if the automation tool was set up correctly or if it’s being adopted by your team. If you did reach your goals, take your learnings and use them for your next process.

  7. Repeat with a new workflow: Review your matrix and learnings and select the next process to automate.

A matrix chart in Karbon's guide 'Accounting automation: How to start automating your workflows' that helps to answer the question of 'Which accounting process should you automate?' It's a matrix that is broken up into four quadrants, with the top left quadrant highlighted as the 'quick and easy' process to automate first.
A matrix guide to help you understand where to start automating your processes.

It’s always important to track the results of an automated process. If it isn’t accomplishing what you were hoping, you need to know so you can dig into why before giving up.

Accounting automation examples

Here are some accounting-specific automation ideas:

  • Monthly accounting

  • Client onboarding

  • Payroll processing

  • Individual tax preparation

  • Accounts receivable and payable

  • Financial reports and forecasts

Monthly accounting

As a recurring process, monthly accounting is ideal for automating. The Karbon Monthly Accounting template streamlines the process by using workflow automation and automated Client Requests, which request details from your clients (like monthly bank account and credit card statements) via automated emails. 

A screenshot of Karbon's Monthly Accounting Workflow template from the Karbon Template Library, which utilizes automation to automate key parts of this accounting process.
Karbon’s Monthly Accounting template uses workflow automation to automatically request client information

This month-end template can be downloaded as an Excel spreadsheet to be used with any practice management software, but you’ll benefit the most by using it directly within Karbon.

View and download the Monthly Accounting template.

Client onboarding

The quicker you complete client onboarding, the quicker you can actually service your clients and generate revenue. 

A practice management solution that integrates with proposal software (such as Ignition and GoProposal) will automate key steps in this process.

Karbon’s Client Onboarding Best Practice Checklist template includes a pre-built client onboarding structure that you can customize for your own firm.

A screenshot of Karbon's Client Onboarding Workflow template from the Karbon Template Library, which uses automation features to automate the client onboarding process for accountants and bookkeepers.
Streamline your client onboarding process with the Client Onboarding Best Practice Checklist template

Payroll processing

Automating the repetitive and complicated nature of payroll (taxes, overtime rates, etc.) will help reduce errors and save time. Gusto and Wagepoint automate payroll processing, including time tracking, automated reminders, and leave requests. 

The Karbon Template library also has payroll processing templates that work with both Gusto and Wagepoint:

Individual tax preparation

Automating the individual tax preparation process involves your accounting workflow tool to update task due dates, statuses and assignments, automatically request information from your clients, and adjust for extensions.

Accounts receivable and payable

Automating your AR and AP will save time, reduce risks and the need for manual data entry. Finance teams will significantly benefit from automating this particular function.

Financial reports and forecasts

Forecasting your clients’ cash flow and financial reporting is key in their business decisions. Being able to automate that will protect against errors.

Will automation replace CPAs and accounting professionals?

Sensational headlines can cause a lot of stir, particularly when technology like Open AI’s GPT-4 can prepare a tax return.

But there’s not necessarily much to back up these initial claims.

“The biggest thing accountants are facing right now is the fact that our clients see all the same headlines that we see every day. Some of those are helpful, some of those aren't, especially in an age when people just learn from headlines,” says Jason Staats, accounting automation expert and owner of accounting community, Realize.

The reality is that AI and automation are tools accountants can use to make their lives easier. They will not replace accountants. Instead, they will save them time, foster creativity, reduce errors, and mitigate risks.

Key features of accounting automation software

Not all accounting workflow automation platforms are built equal. But they should, at a minimum, offer the following: 

Cloud-based or cloud-native

What’s the point of investing in automating your firm’s processes if the firm itself is using outdated, on-premise software solutions?

Integrations with accounting apps

You’ll make the most out of your automated processes if your accounting automation tool integrates with other accounting software, like general ledgers Quickbooks and Xero. Integrations with non-accounting tools like Zapier will help connect apps that don’t integrate.

Internal collaboration tools

The ability to collaborate with your team within your accounting automation tool is critical to your firm’s communication strategy. Collaborating where the work is happening will reduce confusion, save time, and reduce context-switching.

Workflow templates

Your automation tool should offer a series of robust accounting-specific workflow templates that make use of its automation capabilities.

Automatic status updates, assignee updates, date updates

It’s critical that your accounting automation tool automates the small and repetitive tasks, like updates to statues, assignees and dates.

Guided implementation

Your software provider should offer various levels of support so you can ensure your automation tool is set up correctly  and customized appropriately to suit your firm’s needs (and so you can realize ROI sooner).

Time tracking and billing

This will help you plan your team’s capacity, track hours spent on projects and clients, and charge clients accurately if you bill against time.

Reporting and business analytics

Your automation tool should analyze its data. It should help you understand efficiency, revenue and productivity metrics at both the employee-level and client-level.

Email integration

Having an automation tool that directly integrates with your email will be one of the most powerful impacts to your time savings. It ensures your client and staff communications are centralized along with your workflows.

Client portal

Automated accounting software should offer a secure client portal so you can communicate with your clients and request information and documentation, like bank statements, financial statements, purchase orders, journal entries, and expense reports.

Document management

Your accounting automation tool should enable you to store, manage, and track documents in a single source of truth. For an added level of automation, Karbon automatically creates folders in your Document Management System for repeating work items.

Automate common, time-consuming tasks with Karbon

Karbon is an accounting practice management tool that is designed to automate common, time-consuming tasks to allow your team to provide higher quality service to clients.

With Karbon, your team can easily automate processes like client and staff onboarding, client chasing, monthly accounting, and more.

On average, accounting firms using Karbon save:

  • Overall: 16.5 hours each week, per employee.

  • Automating low-value tasks: 2.1 hours each week, per employee.

  • Chasing clients: 3.2 hours each week, per employee.

Accounting firms using Karbon for practice management save an average of 16.5 hours per employee each week.
Thousands of accounting firms across the globe are saving hours through Karbon’s accounting automation features

Book a demo to learn how Karbon can save your firm time and money.

To explore the benefits of using Karbon’s workflow automation capabilities, you can calculate your firm’s ROI using Karbon’s ROI calculator.

For example, if your firm has 20 employees, you would:

  • Save 858 hours per year, per employee

  • Save $29,824 USD per employee

  • Increase revenue by $455,000 USD per year

Karbon's ROI calculator explaining that for a firm with 20 employees using Karbon, they would save: 858 hours per year per employee, $29,824 USD per employee, and increase revenue by $455,000 USD per year.
Karbon’s ROI calculator

Things to remember about automating your accounting firm

While the concept of automating your firm’s processes might seem overwhelming, it should also spark some excitement.

The potential time savings and boosts to efficiency will benefit you, your firm, team, and clients.

It’s important to remember:

  • Manual accounting processes and manual data entry are prone to risks, errors and inefficiencies.

  • Automating your firm’s processes will boost productivity, revenue and save time.

  • But you can’t automate everything, like infrequent tasks or processes that require a human element.

  • Automation will not replace accountants—it will make you more effective in your role as your clients’ trusted advisor.

  • The right accounting automation technology is key.