It used to be the case that finance professionals were forced to do many aspects of their jobs manually. These processes were not only time-consuming, but they also subjected companies to the inevitable inaccuracies that manual work involves. Finance teams were so focused on the details of their daily tasks that it was difficult for them to step back and see the larger picture.
Fortunately, that’s all changed recently with the advancement of automation finance and budget forecasting. Many aspects of the job are now faster, more efficient, and more accurate than ever before. This article will explore several ways in which this is happening.
Improved Accuracy and Data Integrity
One of the advantages of automating finance processes is improved accuracy. Thanks to advancements in AI, sophisticated algorithms are able to gather large amounts of data and process it without the risk of human error. This helps tremendously in managing expenses with greater precision.
In addition, having more accurate data helps to ensure compliance with regulations. If your numbers are off, you could be exposing your team to potential legal issues. With automation, these concerns are largely eliminated. Also, automation enables teams to see results in real-time, which means that you can keep on top of things and make any necessary adjustments as needed. Teams can analyze the accuracy with which forecasts compare to the results of budgeting operations, as well as make analyses more personalized. As a result, they can hone their approaches and refine results in subsequent efforts.
Enhanced Efficiency and Time Savings
Another advantage of finance automation is that it saves huge amounts of time for people. In the past, information gathering and analysis needed to be handled manually, which was incredibly time-consuming.
Now, with automated functions finance teams can free up their time for more important tasks, such as larger strategic planning and goal setting. In fact, one study found that more than a third of businesses polled are saving more than 500 hours a year with the use of automation tools. And results are more accurate, as well. This is a huge saving for the companies that employ these tools.
Better Decision Making
The ultimate outcome of this is that finance professionals are able to make better and more profitable decisions for their companies. When you have solid, reliable information to deal with and your team has the time to plan carefully and be confident in the numbers they are seeing, you will surely make better decisions as a business.
As automation assists teams in generating more accurate numbers, both for forecasting and analysis, it also helps people better understand the larger picture. If managed correctly, automation can identify trends and patterns that they wouldn’t normally be able to see if they completed processes manually.
Being able to make more educated assessments can enable businesses to invest in scalability in their business growth. In other words, businesses can more accurately adjust their resources to meet market trends when they have a better idea of where they stand vis-a-vis their competitors.
When companies don’t have to pay their employees to do a lot of manual work, they can save a lot of money on operating costs. Because automation can take care of a lot of the work that would normally be done by people, companies can save a great deal of money, as well.
In fact, there are whole positions that once required long amounts of manual work that can now be automated. Many different types of back-office tasks, such as manual data entry and invoicing, accounts payable, accounts receivable, spend management, and expense management can now be automated. This allows companies to shift their focus and be able to think about the larger aspects of strategic growth.
Improved Collaboration and Accessibility
With automation, data becomes widely accessible to all the members of any given team. This gives more people insight into the details of company processes and helps to promote company-wide awareness. Consequently, teams have a clearer picture of both the data they are working with, as well as their respective positions. This helps not only in helping individuals with their own tasks but also in enabling collaboration between team members.
Specifically, finance automation helps to avoid data discrepancies between departments and streamline communication between them. Data sharing between the finance and IT departments is particularly important in ensuring that processes continue seamlessly.
Best Practices for Implementing Automation
Given all these benefits, the next logical question is, what is the best way to go about it? Let’s take a look at some best practices for making sure you get the most out of these processes.
Finance automation can be applied to a number of different areas:
- Accounts receivable, including creating recurring invoices, late payment notifications, and recurring credit card payments
- Payroll, including adding employees, setting wages, and automating frequencies of payment
- Purchase order solutions, including procurement processes and payment reconciliation
- Reporting and analysis, including account status, expenses, cash flow, etc
- Accounts payable, including invoice capture, coding, approval, and payment
- Tax solutions of various sorts
In terms of the process of setting up automation, you should keep in mind the following steps:
- Review your current processes and make an assessment of which ones are taking up too much of your employees’ time and could benefit from automation.
- Assign a stakeholder to the processes you choose to automate. Even though they will be done more easily, someone still needs to oversee things to ensure that they are running smoothly.
- Set up and test your workflows. This should include triggers, actions, and results.
You’ll want to test things out a few times to ensure that they run smoothly and correctly and make sure the changes are reflected in your larger business development plan. Once you do, you can be confident that your finance department will start to function much more efficiently and effectively.
The automation of finance and budgeting procedures has been a real game-changer for finance teams. People now have more time to focus on their larger strategic goals and don’t have to worry about the possibility of making mistakes in many of their calculations as a lot of what used to be done manually can now be automated. While these processes still require some oversight, the balance of detailed to larger strategic work has completely shifted. And this means big changes for the businesses involved.