Whether your business consists of a couple of people in a small office or several floors of workers in a skyscraper, a large part of its day-to-day operations is likely to be concerned with finance.
Even just a decade ago, carrying out these functions - for instance, accounting and payroll - might have been covered by simple spreadsheets. However, Excel is now far less likely to make the grade. In the 21st century, financial automation through better technology is increasingly necessary if you're going to keep up with the competition.
Why is finance automation necessary?
There was a time when the aforementioned Excel was the leader in this field, but now there are scores of programs and solutions aimed at speeding up all kinds of accounting processes.
Maybe you think you can manage as you are, but it could be worth your while to take a look at some of them and the benefits they could offer:
Fewer inaccuracies and errors
Spreadsheets are renowned for being fallible in the face of human error, with various studies showing more than 80% of Excel sheets contain mistakes or gaps. That's not just in small firms, either - a famous example saw an investment bank undervalue Tesla's purchase of Solar City by a staggering $400 million after someone counted a value in a spreadsheet twice.
By automating more processes, you could cut the likelihood of mistakes like these.
More consistency
An automated machine can only process numbers one way, but a team of individuals may have multiple methods that could lead to inaccuracies - and even fraud. Software can reduce the chances of this happening.
Freeing up staff time
Inputting data takes so long that it used to be a separate role in itself. Preventing employees from needing to do this will free up their intelligence and insight to do more creative things, such as helping your business grow.
It could even reduce turnover, as a study by Friday Pulse found bored workers are four times more likely to leave their jobs than stressed ones.
Other potential advantages of finance automation software include identifying missed payments, spotting clients being overcharged, making it easier to compile end-of-year reports and highlighting suppliers with poor credit before they become a problem.
How to select finance automation software
Once you've decided to give accounting software a chance, your next job will be to select the tools you want to employ. This might seem daunting given the plethora available, but a good place to start is to work out exactly what you'll need from them.
You can then do your research on the competing programs available for each task before starting small and choosing more once you get used to them and see how they're working for you.
5 top finance automation functions
1. Bookkeeping
With accounting often considered one of the most stressful aspects of running a business, why not get some help in simplifying the entire bookkeeping process? Dedicated software will do it all for you, so you won’t have to check every transaction manually.
2. Invoicing
A recent MarketFinance Business Insights report found up to 39% of invoices are paid late, with the average being 23 days. This can damage cashflow, hinder investment and even lead to the risk of insolvency. By automating invoicing and accounts receivable, bills are more likely to be paid on time and employees in customer service will be free to work on other things.
3. Accounts payable
It's easy to forget to pay the occasional invoice, but doing so regularly could have repercussions for your company's reputation and put reception or customer service staff under pressure. Even if you’re on time, sending invoices for approval, organizing payment and logging transactions can be an arduous job. By automating it all, you'll have a record of payments and even handy reminders of deadlines.
Learn more: Understanding Accounts Payable: The CFO’s Complete Guide
4. Payroll
Annual leave, sick days, monthly salaries... there's a lot to think about when you have employees. And if you get something wrong with their wages, they're unlikely to be too pleased. Using software to manage it all could ensure greater levels of accuracy and fewer angry appointments for HR.
5. Compliance
Having a clear paper trail is vital for all companies to prove they’re sticking to relevant legislation should the authorities come calling. If you automate your recording of paperwork, you won't have to scrabble around for the documentation should you be subject to an audit or query.
Whichever software you choose, automating at least part of your finance and accounting process could make a real difference to the way your company operates - and may even impact your bottom line in the long run.
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