Checkpoints and Their Role in Accounting Automation

April 12, 2016 Meghan Blair-Valero

One of the most important components of financial systems and accounting are the checks and balances known as internal controls.  These controls serve to prevent loss from fraud and errors as well as keep our data accurate. Without checks, balances and analysis of our accounting data, errors and fraud can sneak right through all the way to the most important place...our bottom line.

The Challenge of Automation Without Checks and Balances

Who doesn’t want the time savings that comes when their time tracking app integrates with their payroll program and their payroll program integrates with their accounting software which integrates with their bank? When systems are fully automated and integrated, we are saving time. But, we are also removing the human oversight, internal controls and analysis necessary for both accuracy and management.

In a fully integrated and automated payroll system, an employee that forgets to punch out, and racks up a 100 hour week, doesn’t get their time clock punches corrected. That data gets integrated with the payroll service which pays overtime resulting in an inflated paycheck and payroll cost. That data is then blindly posted to the accounting software and matched to the automated sync with the bank. By the time someone reads an income statement and picks up the error, it’s too late. Your 100 hour week employee now has a fat bank account and the business is in trouble. Just imagine the effect of this type of error multiplied over a year and compounded by similar “automated” mistakes.

This is where internal controls, analysis and human intelligence comes into play.

Building the Ultimate Automated System

In the age of automation and integration, the advisors with the best systems will survive (and thrive!).

Automated and integrated systems that actually work well will:

1.    Acknowledge where automated systems intersect and create checkpoints.

2.    Have accountability built into their system.

3.    Use visual cues to prevent complacency and zombie-like click through.

Let’s reimagine the integrated and automated system with those three elements. Controls need to be inserted where one system meets the next, such as the import of time from the time keeping program to the payroll provider. At this checkpoint, employee time is verified, punch errors corrected and extremes are quickly and easily discovered by a designated person.  

Great systems and apps will signal variations from norms such as overtime in colors that draw one’s eye and beg review. Once approved, that time data can then easily and seamlessly be transferred to the payroll providers system in its corrected format.  

TSheets time tracking does this well.  Their requirement to approve time, color coded overtime and easy sync, meet the needs of an ideal process and incorporates all three key elements of a superior process and system. This can’t be the only internal control and checkpoint though. Other checks such as reviewing the payroll before it’s submitted and the cash is withdrawn, reconciling the bank accounts fully in the accounting software and reviewing reports would also be important steps to a truly accurate and complete process.

These human-centered steps are all simple and quick yet create the internal controls needed and also create opportunities for intelligent review.


Now with the hours saved by integrating our systems and automating components, we can do the truly important work of analysis. Without internal controls, we might have gotten to the end a tiny bit faster. But if the data and figures aren’t right, what’s the point?

About the author

Meghan Blair-Valero is a tech geek through and through. A QuickBooks ProAdvisor, and a member of the Association of Independent Professional Bookkeepers, Meg has contributed to articles and news stories for CNN, Forbes Magazine and various independent news sources related to the world of QuickBooks and small business finance.

Her firm, Fogged In Bookkeeping, was named a Top 50 Cloud Accounting firm by Hubdoc this year. Her focus on finding the right technology to help a business run at its best has become the cornerstone of the services Fogged In Bookkeeping offers to their clients around the country. 

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