Automated Transactional processing is a system in which every cash entry is automatically matched to its 📝Accrual Accounting entry as soon as it is entered into the books.
In conventional bookkeeping, cash activity is recorded first and accrual adjustments follow later, often during the 📝Month End Close. Automated transactional processing collapses those steps: the rule or system that records a cash transaction also posts its accrual treatment to the 📝General Ledger, so the books stay current without a periodic catch-up.
The difficulty of automating a transaction ranges widely. The simplest case is a recurring bill, such as a Verizon bill paid on an Amex card connected to QuickBooks Online, with a rule that posts it to the general ledger automatically. A more complicated case is recognizing the revenue of a software contract that includes both product modules and professional services, as at 📝Crowdbotics. The most complicated is revenue recognition for the sale of an infinitely transferable digital good.
All of our weekly accounting clients run at least the simplest form of this, with bank and card rules posting routine bills straight to the general ledger.