Automation in finance and accounting services can be likened to installing a new backbone into your business; propelling your company forward, driving business revenues and elevating your reputation with clients, trading partners and financial partners.
Digital transformation and automation in your finance processes enables you to establish robust objectives and goals for your business, while adapting manual processes to streamline into digital technology - upgrading your business workflows and increasing efficiency and accuracy.
For your business to compete in the marketplace, a dynamic and effective accounting department is needed; delivering a fast turnaround in the processing of payments, chasing debts and creating reports for business strategy. Automation accomplishes this by ensuring consistency and accuracy of data and minimising administration.
Regardless of how big your business is or what it does, robust finance and accounting systems are an essential part of its success. In fact, when your business is assessed externally, the primary scrutiny will be to examine finance and accounting systems.
What is automation in finance?
Using business process automation software in your accounting reduces repetitive administration tasks such as - credit control, expense management and bank reconciliation. Furthermore it integrates systems and data, streamlining financial data processes.
Manually these same tasks consume hours of time from employees and are susceptible to errors - leading to bottlenecks, uncertainty and negatively affecting cash flow.
Relieving employees from manually processing this data drives compliance, consistency and strengthens professional relationships with both clients and trading partners.
Finance and accounting processes that are often automated include:
- Expense management
- Financial reporting
- Credit control
- Bank reconciliation
- Journal entries
Identifying where to implement finance automation
Businesses often look to automated finance processes for solutions to unify systems and data and reduce errors and wasted time.
The following areas are red flags, alerting you to where you could benefit from finance automation. Are you regularly :-
- Overcharging or undercharging customers
- Missing payments
- Storing data in multiple databases
- Seeing low and slow productivity from employees and a high % of errors
- Inadequate and minimal reporting to senior management - resulting in minimal strategic planning and bad decision making
- Dealing with non-payments from customers with a bad credit history, jeopardising the company and putting it at financial risk.
The importance of automation in finance
C-level executives, sales and marketing teams, human resources, customers, suppliers and auditors all require and expect to receive accurate, up to date financial data.
A poorly managed accounting and finance department not only affects your internal operations, your relationship with clients and traders, it can directly affect your company cash flow. Your cash flow enables you to continue trading, stay afloat and invest in your business.
Long-term and consistent errors will hemorrhage your cash flow and have an adverse and potentially critical impact on the day to day running of your business. You also risk being scrutinised by regulators and in the worst- case scenario going out of business.
Automation in finance and accounting assists your business in delivering efficient, accurate and timely finance processes. It also takes the pressure off your staff and frees up their time to spend on higher level and more rewarding activities.
Automation can serve your company and staff in the following ways:
- Reduces the risk of being exposed to fraud and credit risk
- Increases the efficiency and speed of processing financial data
- Reduces the need for manual data entry, which in turn leads to human error
- Improves compliance
- The delivery of timely and correct reports enhances strategic planning
Considering a transformation of your financial processes?
Planning the automation of your finance and accounting systems? vH3 recommends considering the following points to assist and accelerate your journey:
- Start small; then build and increase the number and complexity of your automated processes
- Let your employees and key personnel contribute to the building of the systems
- Have a digital transformation expert (and team) assist you in planning and delivering your objectives and strategy
- Research business process automation software that has a good reputation for integrating business systems and automating business processes.
Planning your digital transformation in finance
Digital Transformation in finance comes with its challenges but overwhelmingly, it brings opportunity.
As with all areas of digital transformation, we put a great emphasis on strategic planning. It can be challenging to decide which finance processes you want to automate.
So the first steps we advise in reforming your finance and accounting systems are:
- Include your team in the planning and strategising for reform
- Set clear objectives for your business
- List your current processes and look at how and if they align with your objectives
- Make a list of the areas and processes you want to improve
- Examine if your objectives and planned digital transformation reforms will deliver the results you want for your business.
- Determine and strategise a blueprint for rollout
- Be sure to analyse and measure the changes to determine how successful they have been.
Determining what systems to automate?
Researching the financial processes and manual tasks that other businesses have automated will help you in determining where you want to make changes. We have put together a list of some of the common finance automation systems that our customers use to help you in your research.
Journal entry automation
Journal entry is extremely time consuming for staff. Often they have to manually complete data validations, error corrections and approvals and upload them into an ERP system. Delays and errors often follow as the data has to be collected from different databases and sources. Journal entry automation however, enables you to automatically create, update and approve journals - which in turn can be inserted to your general or sub ledger system or ERP solution.
With journal entry automation, there is no risk of losing documents or having to make estimates and errors are reduced. Your overall company performance will improve and in turn, better decisions can be made for the business based on accurate data and you will have an audit trail.
Summary of journal entry automation:
- Automatically create, update, and approve journal entries
- Automated PO accrual process
- Automatically upload journal entry posts to general or sub ledger system or ERP solution
- Achieve audit trail 100% of the time
- Store supporting documentation digitally
Automation of Expense Management Processes
It is common for businesses to manually process expenses through employee expense claims, tracking employee spending and reimbursing travel and entertaining expenses. Processing this manually is time consuming and subject to human error. Expense management automation removes the need for these manual tasks and frees up your employees time for higher level tasks.
Expense management automation integrates an expense management system, such as SAP Concur; collecting, storing, processing and reporting on employee and business expenses, automating the transfer of this data to other business systems. This spares your employees from manually tracking receipts, invoices and payments and removes the mistakes that can come from manually processing this data.
Expense management automation processes commonly include:
- Integration with ERP systems, e.g. SAP Business One, Sage, Microsoft Dynamics, Access Dimensions, SYSPRO etc.
- List item synchronisation, e.g. for cost centres, profit centres, expenses for a specific project
- Invoice automation
- Automated expense reports
- Automatic scheduling of supplier payments
- Automated creation of general ledger entries
Automation of Intercompany Management
Intercompany transactions are complex and time consuming for employees; who often have to manually work out foreign exchange differences, time delays and various accounting and finance systems. Disagreements can arise over pricing and incomplete documentation for accruals and balance journals. Further difficulties may arise with record to report process deadlines.
When you are trading between two or more companies, intercompany process automation gets rid of the manual processes and enables you to reduce errors - increasing the production capacity throughout your business.
Examples of intercompany trading processes that can be automated include:
- Automated transfer (and transformation) of financial data between company finance systems
- Automatic creation of purchase orders, invoices and payments
- Automated transfer (and transformation) of specific data, e.g. supplier or product codes between business systems
- Consolidation of master files, e.g. CRM or supplier data
- Automatic creation and delivery of data-driven or scheduled reports
- Real-time notification of data changes via email or SMS
- Automatic creation of workflow approval processes
Automating Balance Sheet Reconciliation
Likewise balance sheet reconciliation has an integral role in any business. It is also susceptible to human error and inconsistencies and is time consuming (and tedious) for staff to manage manually. Data is manually copied and collated from existing systems such as ERP software, online bank statements and other business applications, so that any discrepancies can be reported for further investigation. If we manually process balance sheet reconciliation in our businesses there is the probability of errors and a lack of visibility and control of the process for management.
Automating balance sheet reconciliation empowers you to standardise data documentation; improving data accuracy, increasing visibility and reducing financial risk.
Below is a list of solutions that automating balance sheet reconciliation can enable:
- Integration with ERP and accounting systems
- Automatically match transactions against a general ledger
- Automate single and multi-level approval workflows
- Automatically update corrections and journals into your ERP system
- Provide a comparison of multiple account balances and identify discrepancies
- Automatic alerts and notifications via email/SMS to employees regarding discrepancies
Automation of Credit Control
One of the most detrimental drains on company cash flow is the poor management of credit control processes. Credit control processes can be time-draining, costly to manage and prone to errors when done manually. Teams managing the credit control process are responsible for monitoring and maintaining a steady cash flow and making sure procedures and processes are followed.
Automating credit control enables and safeguards your processes by ensuring they follow business protocols. It reduces aged debt times, removes human errors and maintains a consistent cash flow. Staff working in finance will be freed up and relieved of the repetitive administration that comes with credit control - increasing their productivity levels and giving them back their time to focus on higher level tasks.
Automated credit control processes include:
- Creation and delivery of credit control letters, emails and business rules
- Creation and delivery of invoices and statements
- Informing employees of credit control status changes via email or SMS, e.g. account placed on credit hold
- Scheduling debt collection phone calls
- Alerts for unallocated invoices
- Automated aged debtor reports
The benefits of finance automation
Let’s recap on the advantages of automating financial processes. Implementing automated financial solutions ultimately enables you to align and streamline multiple divergent processes, information and operations, whilst reducing administration and costs. Automation can allow you to create processes for preparing statements, account reconciliation, data entry and internal management. Other automation benefits include:
Improving the accuracy of data
Automating financial processes ensures data accuracy and speeds up processes by eliminating the repetitive and time consuming manual administration tasks from staff. Financial systems and data can be integrated and synchronised between all databases and systems; updating data in one system will correlate throughout all your business operations.
Faster Processing
The right automation software will likewise increase efficiency and ensure your financial operations are leaner, meaning staff are able to respond faster to demands and requests. Automated workflow approval software will equip your team to respond quicker to the challenges and opportunities in the marketplace, because they can trust the consistency and accuracy of data. With faster processing times, debt chasing can be managed effectively and staff can be automatically notified of important deadlines and inconsistencies.
Increased data visibility
Automation in finance increases data visibility and enables that data to be streamlined automatically throughout all business systems. The results - employees are equipped with up-to-date accurate data with which they can make informed strategic decisions to drive the company forward towards its objectives.
A platform for digital transformation
Business process automation software for accounting and finance offers you a platform for digital transformation throughout your business; integrating systems and automating business processes quickly and seamlessly. The software can be incorporated into eCommerce processes, procurement, warehousing and sales and marketing - removing tedious manual tasks from staff and saving time and costs for more valuable, higher level activities.
How to automate your accounting and finance processes
If this article has inspired you to automate your accounting and finance processes, vH3’s expert team of system architects are available for a consultation.
We have worked in multiple industries with a wide range of business systems and applications including software such as SAP, Microsoft, Sage, Access Group, Epicure, SYSPRO and more. Codeless Platforms’ BPA Platform have a respected and proven track record, providing automation tools that can automate manual processes and integrate all your existing business systems. We can assist you in building a bespoke BPA Platform to suit all your business’s requirements and objectives.
Contact us here and book a call with one of our system architects today or download our brochure at vh3.digital.
