As businesses continue to evolve and innovate, staying ahead of the curve is not just a strategy but a necessity. Finance departments are no exception to this. The traditional manual processes that once defined financial operations are now being replaced by a revolutionary solution that changes the way businesses manage their finances: finance process automation. How has it changed the game? In this blog, we talk about automation and how it makes a difference when streamlining financial processes.
What Is Automation in Finance?
Over the past few years, finance automation has evolved significantly, revolutionising the way financial tasks are handled in various industries. Automation in finance, or simply finance automation, is using technology to perform repetitive financial tasks without direct human intervention. This could be through tools, systems, software and algorithms.
9 Finance Processes You Can Automate
1. Invoicing
Invoicing used to involve manual creation, printing and mailing of invoices, which was not only time-consuming but also prone to errors. With automation software, you can send invoice templates to clients and track their payment status. You don’t have to manually update their data because the software will record these for you.
2. Purchase orders
Facilitate purchase order management by automating procurement processes. No need for spreadsheets as the finance automation software can manage the purchase orders for you.
3. Tax solutions
Finance teams can benefit from automation’s ability to do large data collection. A finance automation software’s scanning technology can help with paperwork like receipts, bills, invoices and inspection reports by extracting the data and organising it into a searchable format. During tax season, your finance team will no longer have a hard time because all the necessary documents are uploaded and organised.
4. Payroll
Payroll management is easier with automation because you get to add your employees to the payroll system, set their wages and rates and automate the frequency of the payroll process.
5. Accounts receivable
You can seamlessly stay on top of the money owed to you thanks to automation. Let it handle recurring invoices, overdue payments and recurring credit card payments to avoid any financial losses.
6. Accounts payable
Automate your finances in accounts payable so you’re sure that you pay your bills on time. With AP automation, you can set the date and amount and let the finance automation software do the rest.
7. Bookkeeping
Automation will help you manage collecting, inputting and analysing data. For example, it simplifies the tracking of business expenses by automatically categorising and recording expenses based on predefined rules.
8. Reporting
You no longer have to manually generate data and create reports as automation can consolidate all relevant financial data from their connected systems and create the report for you.
9. Expenses
Before automation found its way to the business world, employees would submit receipts and invoices using physical paper and wait for the admin to process them. Now, automated receipt collection extracts data for you and provides accurate insights. Other expenses to automate include:
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- Employee reimbursements — Say goodbye to manual check processing by setting up automated systems for direct deposit of reimbursement funds.
- Cash claims — An online portal where employees can submit cash claims allows the team to minimise errors, enhance compliance with policies and expedite the reimbursement cycle for employees.
- Currency conversion — Some automation platforms have real-time exchange rates to convert expenses into the organisation's base currency.
- Audits — Automated audit trails ensure transparency and assist in tracking and auditing claims.
7 Benefits of Finance Process Automation
Finance process automation is changing the game by changing the way financial tasks and operations are executed within organisations. Here are some ways finance process automation is making a significant impact:
1. Better visibility
When your systems and processes are integrated, you get a 360-degree view of your operations and finances. You’ll better understand the reasons behind your fluctuating financials so you can make faster and smarter business decisions.
2. Faster approvals and processing times
Imagine having to wait hours, days or even weeks for approval of a budget or a claim. It affects everything else after that! Having an automatic approval system will help you save time and get rid of long email threads where people check the status of every request.
3. Stronger data integrity
Manually entered data will always be prone to mistakes. When your data is managed by an automation platform, you don’t have to worry about manual errors.
4. Improved efficiency
Automation eliminates the need for manual human action in repetitive tasks, allowing processes to run continuously without breaks. This saves a lot of time, enabling employees to focus on more complex and strategic aspects of their roles.
5. Integration with other technologies
In addition to automating repetitive tasks, automation platforms also integrate with other technologies to streamline the whole financial process. When integrated, various systems create a seamless flow of information.
6. Reduced errors
Automation eliminates human errors and ensures that financial data is accurate, reliable and consistent.
7. Evolved roles for finance professionals
Automation is not replacing finance professionals—it’s expanding their skill sets. Since repetitive tasks are already automated, finance professionals get to develop, learn and focus on new skills.
How to Automate Finances
Transitioning to business finance automation doesn’t have to be difficult. Here are the five steps to start:
1. Outline your finance processes
List down your processes and map out the individual steps for each. This will allow you to organise your workflows and lay the groundwork for the transition. Doing this will help you identify where to further automate finance tasks.
2. Evaluate your current setup
Look at the systems and workflows that your company already has. Since automation can connect and integrate systems, connect yours and see how well they work together.
3. Associate automation with your business goals
What’s your priority? What are your most pressing needs? What do you need to meet your company goals? You don’t need to automate everything all at once. Just know which ones need to be automated first.
4. Look for an automation solution
Finance automation solutions are all different, so find the one that matches your processes and needs.
5. Set up and test workflows
Establish a workflow that will guide the automation moving forward. A workflow should consist of a trigger, an action and a result.
Investing in automation technologies is essential in the business world, particularly in the financial sector. Companies are realising the transformative potential of automation to enhance operational efficiency, reduce fraud and optimise processes.
