Automating Accounting: From Invoice to Ledger

Accounting is necessary but not value-adding. Every hour you spend sorting receipts and typing numbers is an hour not spent on your actual business. The good news: 70-80% of accounting tasks can be automated. Here's how.

What Can Be Automated?

High Automation Potential (80-100%)

Medium Potential (50-70%)

Low Potential (Needs Humans)

• Year-end close preparation
• Tax planning
• Complex transactions
• Audits

The Automated Accounting Workflow

Overview

[Business Transaction]
       |
[Digital Capture]
       |
[Automatic Recognition]
       |
[Coding + Validation]
       |
[Approval (if needed)]
       |
[Posting]
       |
[Accounting Export]
       |
[Accountant/Bookkeeper]

Phase 1: Digital Receipt Capture

Incoming invoices:

Email to invoices@company.com
    -> Automatically into receipt system
    -> OCR + AI extraction
    -> For review/approval

Outgoing invoices:

Invoice created in accounting system
    -> Automatically sent via email
    -> Payment reminder after X days
    -> Reminders automatically

Cash receipts:

Photo with smartphone app
    -> Upload to system
    -> Automatic categorization
    -> Link to credit card transaction

Bank statements:

Bank API or CSV import
    -> Automatic matching
    -> Reconcile open items

Phase 2: Intelligent Coding

Rule-based coding:

IF Supplier = "Amazon" AND Amount < $500
  THEN Account = Office Supplies

IF Supplier = "Verizon"
  THEN Account = Telephone

IF Subject contains "Hosting"
  THEN Account = IT Costs

AI-based coding:

[Invoice text] -> GPT Analysis
    -> Suggestion: "IT Services, Account 6500"
    -> Confidence: 95%
    -> If >90%: Auto-post
    -> If <90%: Manual review

Phase 3: Approval Workflow

Invoice > $500:
    -> Slack message to approver
    -> "Invoice from XY for $1,234 - Approve?"
    -> [Yes] [No] [Details]
    -> On approval: Continue to posting

Invoice < $500 AND known supplier:
    -> Automatic approval

Phase 4: Posting and Export

Automatic posting:

Approval granted
    -> Create journal entry
    -> Post in accounting system
    -> Link receipt

Accounting export:

Monthly or on demand:
    -> Generate journal entries
    -> Receipt images as PDF
    -> Upload to accounting platform
    -> Accountant receives notification

Tools for Automated Accounting

All-in-One Solutions

Specialized Tools (Add-ons)

Automation Layer

Concrete Setup Guide

Scenario: SMB with External Accountant

Starting point:

• 100-300 incoming invoices/month
• External accountant handles books and close
• Currently: Folder of receipts sent to accountant

Target setup:

[All receipts digital]
       |
[Automatic capture + coding]
       |
[Approval by owner/manager]
       |
[Automatic accounting export]
       |
[Accountant reviews + adjusts]

Step 1: Tool Selection

Option A: Dext + QuickBooks

• Dext collects all receipts
• Automatic categorization
• Sync to QuickBooks
• Cost: ~$60/month

Option B: Hubdoc + Xero

• All in one ecosystem
• Learning AI coding
• Seamless sync
• Cost: ~$40/month

Option C: QuickBooks + Make.com

• QuickBooks for core functions
• Make.com for special workflows
• Flexible export
• Cost: ~$40/month

Step 2: Connect Receipt Sources

Email:
Set up invoices@company.com
Enable forwarding to tool

Bank:
API connection (if available)
Otherwise: Daily automated CSV import

Credit cards:
Ramp/Brex for corporate cards
Or: Bank connection

Physical receipts:
App on employee phones
Photo -> automatically in system

Step 3: Set Up Coding Rules

Create frequent suppliers:
Verizon -> Telephone
AWS -> IT Costs
Office Depot -> Office Supplies

Keyword rules:
"Meals" -> Entertainment
"Gas" -> Auto Expense
"Software" -> IT Costs
"Rent" -> Rent Expense

Step 4: Approval Workflow

With Make.com:
Trigger: New invoice in system
Filter: Amount > $500
Slack: Message to approver with buttons
Webhook: On click -> Update status
Continue to posting

Step 5: Accounting Connection

Monthly export:
All approved entries
Standard format (CSV/QBO)
Upload to accounting platform
Email to accountant: "Data ready"

Special Case: Expense Reports

The Old Way

1. Employee collects receipts (paper)
Employee fills out spreadsheet
Employee submits
Manager signs
Accounting reviews
Accounting types in
Reimbursement
-> Duration: 2-4 weeks

The Automated Way

1. Employee photographs receipts with app (day of expense)
App extracts data automatically
Employee assigns project/cost center
At trip end: Click "Submit"
Automatic review (per diems, limits)
Manager gets notification -> Approve with one click
Automatic posting + reimbursement
-> Duration: 2-3 days

Expense Tools

Automated Collections

Setup

Invoice created -> Due date set

Day +3 after due:
    -> Check for payment (bank sync)
    -> If not paid: Friendly reminder

Day +10:
    -> Recheck
    -> If not paid: 1st reminder

Day +20:
    -> 2nd reminder with late fee

Day +30:
    -> Final notice / Collections warning
    -> Notification to management

Day +45:
    -> Handoff to collections (manual/automatic)

Automation in Make.com

Trigger: Daily at 9:00 AM

Fetch: All open invoices
Filter: Due + not paid
For each invoice:
   - Calculate days overdue
   - Determine reminder level
   - Select email template
   - Send email
   - Update status
Report to accounting

Bank Automation

Automatic Payment Matching

Daily:
Fetch account transactions (API or CSV)
For each transaction:
   - Search open items (amount + reference)
   - Match found -> Auto-reconcile
   - No match -> Queue for manual assignment
Report: X of Y automatically matched

Automate Payment Runs

Weekly (Friday):
Gather all approved invoices
Due this week or early payment discount deadline
Generate payment file
Import into banking software
Present for approval

Compliance Considerations

Requirements

• Immutability: Preserve original receipt
• Completeness: Capture all transactions
• Traceability: Log changes
• Organization: Systematic filing
• Timeliness: Prompt capture

Automated Implementation

Receipt incoming:
    -> Immediate timestamp
    -> Store original unchanged
    -> All changes in audit log
    -> Systematic naming
    -> Encrypted storage

Important: Use tools that are SOC 2 certified or meet relevant compliance standards (QuickBooks, Xero, etc.).

ROI Calculation

Example: Small Business with 150 Receipts/Month

Before:

• 15 hrs/month for receipt management
• Accountant: $400/month (lots of cleanup work)
• Late payment reminders
• Early payment discounts missed

Investment:

• Dext + QuickBooks: $60/month
• Setup: 8 hours (one-time)

After:

• 3 hrs/month for receipt management
• Accountant: $300/month (less work)
• Reminders on time
• Early payment discounts captured

Savings:

• Time: 12 hrs x $35 = $420/month
• Accountant: $100/month
• Early payment discounts: ~$200/month (estimated)
• Minus tools: -$60/month
• Net: ~$660/month

Frequently Asked Questions

Does the IRS/tax authority accept digital receipts?

Yes, if properly processed and stored. Paper receipts can be destroyed after scanning (documentation required).

What if my accountant won't cooperate?

Standard exports always work. Modern accountants appreciate digital clients - they save time too.

Is it secure?

Reputable tools are SOC 2 certified, use encryption, and store data on secure servers.

Can I switch later?

Yes. Transaction data can be exported. Receipts too. Vendor lock-in is minimal.

Checklist: Automating Accounting

Preparation

Implementation

Go-Live

Conclusion

Automating accounting is one of the most rewarding automation cases:

• Clear rules: Accounting is rule-based
• High frequency: Daily/weekly recurring
• Measurable savings: Hours become minutes
• Fewer errors: No more typos
• Better visibility: Real-time instead of month-end

You don't need to be a tech expert. Tools like QuickBooks, Xero, or specialized receipt apps make it simple.

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Want to automate your accounting? We help with tool selection, setup, and integration - so you can focus on your business.