Of all the departments involved in the day-to-day management of any business, finance above all others can depend on technology to resolve complexities in the financial process.
From the processing of payments, generating invoices that in turn need to be matched to purchase orders and proof of receipt, each workflow and process in the finance department needs a range of people, systems and data that insists on being error free.
In this newsletter we consider how an automation ensures a full coordination of all elements, eliminating manual actions, ensuring collaboration whilst dealing consistently and accurately, maintaining detailed records and reporting at each and every stage of the finance workflow process.
It is understood that finance processes are complex but that doesn’t mean they have to be complicated. With the correct levels of automation, it is possible to bring control, accountability and efficiency across finance staff, colleagues, customers, vendors, and approvers.
As we often do in these newsletters, we begin with a base definition of what we describe as finance automation.
Finance automation involves the use of technology allowing tasks to be completed with minimal human contact. This of course doesn’t replace individuals with robotic actions. More it means the use of automation to deal with those repetitive manual tasks which are time consuming as well as open to human error. By automating these tasks, finance departments are able to better direct their efforts to creating value and driving strategy, while ensuring higher levels of business standards and excellence.
Finance teams that rely primarily on a manual process such as email or spreadsheets to manage financial data can be in danger of confusion, data loss and errors. By using automation and standardisation and then integrating these processes, mistakes are minimised, while overall productivity is enhanced. Data collection allows full visibility into all elements of the finance pipelines in a single location. Contracts, invoices, client information etc. can be viewed without the need to access multiple tools and sorting through information manually. By integrating with other current financial tools such as Excel automation ties together all aspects of the financial operation.
The streamlining of process provides an assurance that compliance and approval are not only met, but also removes the bottleneck often created. By applying built in rules, it can be ensured that no actions or transactions can be made without first receiving the correct levels of approval. Request for approval ensures that dashboards requiring action are highlighted quickly and correctly. Not only is it easy to create a request, this request can be tracked, viewed and reported, while customised forms add consistency with triggered requests for action and notifications.
Examples of Finance Automation
Examples of Finance Automation
In this part we consider standardised finance management elements and consider how an automated system offers real value. We look at just some of those areas which can cause issues and concerns and look at how automated systems can address them.
Accounts payable, this tends to require several manual processes including the relevant approval before agreeing payment, allocating funds, adhering to payment terms that may vary then physically making the payment.
A fully automated system connects to the accounts payable system and then directly to the reimbursement workflow. This in turn ensures only approved invoices are actioned. This can then be used to budget allocation automatically, even before payment is actually made.
Next, we look at the reimbursement of expanses. These can become severely backlogged when multiple employees submit requests, often using multiple channels. They can be exacerbated by employees unclear of policies, unstructured forms completed, late filing or missing information. These can be addressed by providing a detailed level of information centrally, a structured workflow, automatic notifications to approvers and in turn allowing employees to track the status of their requests. Expense trends can be analysed using gathered data for consideration on how the expenses generated can be monitored and managed.
Now we move onto Purchasing and improvement. The very nature of many purchasing requests can result in missing, incorrect, or incomplete information and detail. Thes in turn can lead to a lack of spending control and purchases outside the procurement process. Inaccurate data through unstructured request forms, data entry error even receiving the same request through multiple channels. Of great importance is the confirmation of contract compliance which must be confirmed by the finance department when considering multiple suppliers. All of these can be avoided by the standardisation of purchase requests, set conditions, mandatory actions, and dedicated automation rules.
Nowhere are the stakes higher than in payroll, especially when employees pay does not appear in accounts when expected. Payroll can be extremely complex and difficult to manage with differing salary levels, holidays, sickness pay, tax, and any fringe benefits to be factored. By automating not only does the manual element disappear, but also the difficulties of accuracy removing a huge amount of staff stress and time. Centralised reports also offer the opportunity to look for inconsistencies, changes, or revisions.
Lastly in this section we can look at tax compliance and reporting. Often a business needs to resort to support from an experienced (expensive) professional to even begin to calculate tax due. Not only is this process laborious it is often difficult to follow and understand. Now any business can automate tax requirements calculating taxation requirements for every transaction. This provides clarity and a full understanding of obligations even if occurring across different jurisdictions. Not only does this save enormous amounts of time and ensuring an accurate, timely and accurate audit, risks can be identified easily and early in real time.
By automating your finance processes, it is a simple process to ensure that all these are communicating with each other at a central point and in turn with any automation included within the business itself ensuring that all departments can share information quickly and easily. Without doubt the most valuable commodity in any business is information.
Now it is possible to look back on the time when a highly qualified finance team spent large parts of the working day entering copying and pastings data onto Excell spreadsheets. Employing automation that same team will be free to analyse and interpret information and trends, realising efficiencies and growth.