The CFO's Finance Process Automation Playbook

Typically, businesses and finance professionals have relied on employees to carry out manual data entry and other related finance tasks. However, digital transformation and COVID-19 have hugely accelerated the adoption of automation technology for accounting departments.

Finance automation helps organizations coordinate business processes by eliminating manual tasks, simplifying collaboration and streamlining workflows. Here’s everything you need to know about finance automation.

What is finance automation?

Finance automation refers to the use of technology to complete tasks and financial processes that are usually performed by humans. With finance automation, companies can eliminate time-consuming, repetitive tasks, meaning team members can free up their time so they can drive more value for the business.

Not only does it improve efficiency and productivity in the workplace, but employing finance automation technology leads to better employee satisfaction and drives business process excellence.

What benefits can you derive from finance automation?

• Fewer human errors: It’s a fact of life that humans make mistakes. Automating data collection and entry reduces the possibility of human error by removing the need for individuals to copy and paste or input information manually.
• Reduced costs and increased efficiency: Finance automation reduces costs by taking over repetitive and time-consuming tasks. This means employees can dedicate time to more important processes, creating a more efficient workplace.
• Speedy approvals: Automation removes the possibility of reviews and approvals creating bottlenecks within your business. Ensure that the right rules are outlined so that transactions require the proper approval.
• Increased visibility: Finance automation provides total visibility into your finance pipelines without having to switch between different tools or manage data manually.

What financial processes should be automated?

Several financial processes should be automated to streamline your business operations.

Accounts payable 

Finance departments typically handle several manual processes every day. These include ensuring invoices are approved before payment is issued, that there are sufficient funds for payments and that payment terms are adhered to.

According to the Yooz State of Automation in Finance International Market Research report 2021, the top problems businesses face with manual accounts payable processes are being unable to operate efficiently with a remote workforce (36%), overly complicated processes (34%) and that they’re too time-consuming (34%).

Finance automation software streamlines these processes by connecting a company’s accounts payable system to other workflows for purchasing and reimbursement. This ensures that approved invoices are processed efficiently and on time. Additionally, this software can be integrated with financial planning tools to automate budget allocation.

Invoicing and accounts receivable

Invoicing and accounts receivable play an essential role in any business. However, many of the processes involved in this are repetitive, time-consuming and prone to human error. Moreover, accurate invoicing typically involves different teams and departments working together, which can further increase the potential for error and payment delays.

Finance automation software automates invoicing and accounts receivable processes such as generating and sending invoices, reconciling payments and sending prompts to customers.

Financial planning and analysis (FP&A)

FP&A departments spend a huge amount of time sourcing, formatting and aggregating data rather than on the tasks involved in planning and analysis. However, budgeting, forecasting and reporting play a vital role in ensuring business process excellence, which is why finance automation software should be used to automate these tasks, improve efficiency and free up time for FP&A teams to carry out other value-adding activities.

Expense management

Expense management is one of the most time-consuming and repetitive tasks for finance teams. It involves a number of complicated steps and it’s easy for expense requests to become backlogged. Some common pain points that arise in the expense management process include unclear expense policies, delayed reimbursements and poor visibility into expenses.

Finance automation software helps to address these issues by providing a structured workflow for expense management, allowing employees full visibility into their requests and integrating with other financial tools such as enterprise resource planning (ERP) and document management software.

How to automate your financial processes

Today, there’s a huge range of software solutions to automate finance tasks like invoicing and expense management. Here’s how to start automating your financial processes.

       1. Outline and standardize your processes

First things first, create a roadmap of your processes to identify inefficiencies and areas for improvement. This will allow you to see which processes can be streamlined with finance automation software.

       2. Build a digital form and workflow

Next, you should build a digital form and workflow and assign any resources you’ll require for different tasks. In this step, you can identify any processes that cause inefficiencies and slow down the time it takes to reach the desired outcome. Once this is done, you can deploy automation software across the organization so that finance teams can complete their tasks and achieve their goals more efficiently.

       3. Ensure integration with other tools

To truly benefit from finance automation, you should ensure that the software you choose integrates with other tools that your team rely on. For instance, your finance department may use customer relationship management software, payment collection tools and ERP platforms.

Why your existing processes don't work

Financial processes can be extremely time-consuming for the teams involved. Particularly tasks such as issuing and processing invoices, budget tracking and financial reporting. As a business grows, its processes inevitably become more complex. As a result, huge amounts of time can be lost on manual data entry and managing spreadsheets.

It doesn’t matter if your finance team is composed of the most efficient workers on the planet; manual data entry is tedious, slow and prone to human error. Manual processing often leads to a lack of control and visibility over your important financial data, which can result in inefficiencies and problematic decision-making while also making your business more vulnerable to fraud.

Which technologies and tools are used for finance automation?

Robotic process automation (RPA)

RPA technology has revolutionized the finance world. It involves automating repetitive and tedious computer-based tasks involved in financial processes that once relied on human action. These manual processes are still central to many organizations, but they can use up valuable resources and cause inefficiencies as your business grows. RPA enables companies to eliminate manual data entry with bots that use existing systems to carry out the same tasks an employee would.

Learn more: https://www.insightsforprofessionals.com/it/software/the-cfos-guide-to-rpa

Intelligent automation

Intelligent automation is a development of RPA that combines RPA capabilities including workflow orchestration, machine learning, advanced analytics and more onto a single platform to enable the automation of a plethora of manual tasks.

The application of intelligent automation in finance and accounting creates value for organizations in several ways, including enhancing capacity, productivity and accuracy, reducing risk and bolstering compliance.

Machine learning

Machine learning is a type of artificial intelligence that uses data and algorithms to imitate human thought processes and improves its accuracy over time. The finance industry is increasingly deploying machine learning technology to help in the process of automating tedious, time-consuming tasks to streamline operations and improve accuracy.

Process mining

Essentially, process mining refers to a number of techniques that leverage existing data to analyze, monitor and enhance business processes and workflows. It involves taking a deep look into what’s going on to understand each process better and identify any inefficiencies that are causing problems or slowing down your performance. Armed with information gleaned from process mining, businesses and finance professionals can take steps to make improvements.

Document automation

Document automation is exactly what it sounds like and refers to automating the process of document creation at scale. It relies on software that enables companies to automatically collect data and generate documents based on certain rules to streamline their financial office and reduce costs associated with printing and sending physical papers.

Should you integrate ERP with finance automation software?

ERP systems help organizations to manage a range of core business processes. Increasing operational efficiency is the main reason for deploying ERP for 61% of professionals across all sectors in the finance industry. Furthermore, almost two-thirds of companies invest in ERP to improve productivity and collaboration.

By integrating finance automation software with their ERP system, companies can leverage the full benefits of the financial data insights provided and utilize this information to make more strategic business decisions.

Rather than dedicating countless hours to manual data input across different systems, companies and business leaders can access the many benefits of integrating finance automation and ERP such as improved financial transparency, reduced reporting risk and access to real-time analytics.

Final thoughts

With all the technology at your fingertips today, your finance team shouldn’t have to spend their days poring over spreadsheets and manual data entry. Finance processes are the lifeblood of every business, but they don’t need to be unnecessarily complicated.

With the help of finance automation software, you can give your team more control and visibility over your company’s finance workflows while minimizing time spent on repetitive and time-consuming tasks. Not only will this lead to smoother financial operations, but it will also enhance business agility and improve your relationships with vendors and customers.