Whether you've noticed it or not, you’re probably already using automation in your workplace. Whether it’s managing employees’ payrolls or sending customer newsletters at a specific time of the day, automation has likely made your job easier in one way or another.
But did you know that finance automation can do more than just that? It can also help you future-proof your finances so you won’t have to worry about your business struggling financially.
What Does It Mean to Future-Proof Your Finances?
Protecting your finances is the main point of future-proofing them. It’s essentially the process of preparing for potential challenges and changes so that such changes won’t negatively impact your finances.
When you future-proof your finances, you must also consider financial trends, possible risks and solutions to minimise the effect of these risks.
Use Cases for Automation
Here’s a little secret: Finance automation can do more than just make your work easier. These use cases for automation are prime examples of finance-related functions that you can automate to future-proof your finances.
1. Cash flow management
Cash flow management is the tracking of money that comes in and goes out of your business. Tracking this includes monitoring it vis-a-vis outgoing finances such as employee salary and bills.
You can start automating this process when you integrate the different sources of financial data, such as sales data and accounting systems, into a streamlined and centralised platform. When automated, cash flow management can forecast cash inflows and outflows following historical data, industry trends and customer payment patterns. All this allows you to be on track and have a complete overview of your financial health.
2. Accounts payable
A company’s accounts payable refers to its short-term liability—essentially the money the business owes to its suppliers who have provided goods or services.
The automated process involves electronic invoices received through different channels such as email. Automation helps capture relevant invoice data and ensure accuracy. It can also validate the data by matching it against purchase orders.
3. Accounts receivable
Accounts receivable is the balance of money due to the organisation for goods or services delivered to clients or customers.
When automated, accounts receivable uses electronic invoicing to send invoices electronically to customers. This allows faster processes, less waiting time and smaller risks of invoices getting lost.
4. Invoice processing
Invoice processing involves managing supplier invoices—from receipt of invoice to payment. When you automate this process, you can streamline and optimise the organisation’s invoices without the hassle of dealing with physical paperwork.
Automated invoice processing also has the capacity to capture and extract relevant data from the invoice using data extraction algorithms. The software then validates the data against purchase orders and contract terms.
5. Financial reporting
Financial reporting is done by generating data about the organisation’s financial standing and performance. It is usually presented to stakeholders such as investors and regulatory authorities.
Automated financial reporting begins when data sources, such as spreadsheets and accounting systems, are integrated into a centralised location. Financial reporting automation ensures that the data is accurate, updated and easily accessible.
6. Budgeting and forecasting
Budgeting involves the creation of a financial strategy that outlines the organisation’s expected cash flows and expenses for a specific period. The goal of budgeting is to make sure that the organisation's resources are used effectively and efficiently.
Forecasting is when you refer to historical financial data and market trends to predict outcomes. It’s fact- and history-based as it anticipates challenges and makes informed decisions.
You can begin automating the budgeting and forecasting process by consolidating financial data in a repository, which then serves as a foundation for your budgets and forecasts. Automation software allows users to extract and analyse financial data to produce insights and make informed decisions.
7. Bank reconciliation
Bank reconciliation is when you compare the organisation’s bank statements with your records.
Automated bank reconciliation starts by integrating the organisation’s bank statements and accounting system into a centralised location. This eliminates manual data entry and automatically retrieves bank transaction data. Advanced automation software can also compare each bank transaction with a corresponding entry in your organisation’s records.
8. Payroll processing
Any organisation with employees is familiar with payroll processing, which is the accurate management of employee compensation and benefits. Not only does it ensure the correct payment to employees, but it also ensures timeliness of payment and compliance with labour laws, company policies and tax regulations.
When you automate payroll processing, the software calculates employee wages, handles benefits, applies taxes and deductions and generates net pay calculations.
9. Taxes
Tax compliance ensures that the organisation follows all applicable tax laws and regulations. This is essential for companies because non-compliance will lead to penalties and damage to the company’s reputation.
Automated tax compliance and reporting enables updates so that any changes in tax laws and codes are reflected. With automated tax compliance, you won’t have to worry about whether or not the organisation is complying with the latest tax requirements, thus eliminating the burden of having to manually check and monitor tax updates.
How Can Automation Future-Proof My Finances?
Automating finances is one of the best financial practices you can do for your organisation. When you automate your organisation’s usual processes, you develop healthy financial habits. You get an aerial view of where your money comes from and where it goes, thus allowing you to make budget strategies and decisions.
When you invest in financial automation, you no longer have to make blind or uncertain decisions for your company’s future. Your decisions will be based on factual and informative insights, and you won’t have to worry about compliance because you’re sure that the processes comply with regulations and eliminate the risk of financial setbacks.
Automating does not only guarantee an easier work day, but it also ensures healthier money for the future!
