When looking at how to solve these problems with your finance function, there can be some hesitance about moving away from their usual way of doing things and trusting automation in finance to streamline time-consuming processes.
As leaders in financial management software, we work with businesses of all sizes, showing them how implementing new finance management software that uses automation provides numerous efficiency gains and cuts out needless administration.
In this article, we will give you the low-down on automation in finance and how embracing automation can free up time from tedious tasks to take on more exciting work that will drive financial operations forward.
What is finance automation?
Across all industries, the modern workplace is evolving, and the finance industry is no different.
Automation in finance is eliminating the traditional roadblocks and operational inefficiencies finance professionals had previously experienced. Automated financial systems are streamlining workflows and boosting businesses' bottom lines.
Businesses must recognise their deficiencies and choose financial management software that employs accounting automation to improve their accounting jobs and reduce human error caused by manual processes.
The right automated finance software can elevate any accounting practice to a market-leading position – even those without the resources and workforce of larger businesses.
Financial management software can handle repetitive manual tasks, allowing employees to focus on professional development.
What is financial process automation?
Financial process automation is when finance and accounting software streamline functions that may be considered necessary but repetitive.
The best practice for finance process automation is where they are standardised across your entire firm, considered time-consuming, and consistently repeated.
Why should embrace automation in my business?
Automating some financial processes has long been a goal in business, and today it's essential if you want to keep up with the competition. But just what is it that makes it so invaluable?
What can it bring to your business that you don't already have? When you take the leap and introduce financial automation software into your workplace, you'll start seeing the benefits straight away, including the following:
Improved data integrity
As a rule, the less human interaction there is with your data, the less likely it is that errors will be made. When a piece of data is entered incorrectly into an automated system, it’s easy to track it through that system and resolve the problem, quickly identifying any further calculations it has affected and any reports that are inaccurate as a result. Standardisation of both input and output means that you’ll notice more quickly when something is wrong. Easy synchronisation of financial software with other systems you use reduces the risk of data corruption.
Improved efficiency
By reducing the need for manual processing, finance software significantly reduces the amount of time that employees need to spend on routine tasks and frees them up to make better use of their abilities. Routine activities such as managing payroll, sending and receiving invoices and drafting MTD reports can be done automatically, while other procedures can be streamlined. Expense management software, requires manual work and approval but makes calculations and keeps files organised by itself.
Improved security
Because fewer individuals need to interact with the system, it’s easier to prevent the leaking of sensitive data. This not only makes the company less vulnerable to corporate espionage, but it also helps to protect the privacy of employees, customers and clients.
You can control exactly who has access to data at different stages of processing, and you can monitor which devices are used to access it. For instance, if several people are working on a project, you can have a pretty good idea as to who accessed the project financials within a given period.
Makes faster approvals possible
Manually entering inter-company approvals is frequently lengthy and time-consuming and requires all of the employee’s attention and focus. In companies that use manual processes, extremely long email chains often need to be checked and approved.
Automated processing helps companies by cutting down the time this takes, using keywords and fact-checking AI to verify that everything is correct. While record-keeping remains important to ensure the quality of the work, it requires no additional effort.
Improved transparency
Using automatic financial processing enables every part of your financial management system to be connected, which helps you see the big picture in your company.
This makes it easier to follow trends and identify areas where improvements can be made. It means you can quickly identify responsible for any oddities in the data so you can direct queries appropriately, and it makes every aspect of auditing faster and significantly reduces the risk of fraudulent activity going unseen. More transparent processes are appealing to shareholders, reassuring them that everything in the organisation is above board.
The benefits of automation in finance
Introducing financial automation software to your business requires a big adjustment, but it's a change that you're highly unlikely to regret. Automation makes it much easier to integrate your systems and improve performance across your entire organisation.
Here are five ways that automation could benefit you.
Improved efficiency
Why go through the laborious process of completing tasks manually when you could have a computer take care of them for you in a fraction of the time? When you enter data into an automated system, you only need to do it once, and the same goes for any updates, as information is immediately propagated across the system.
This makes it much easier to manage payroll, expenses and other processes that require inter-departmental working. When employees no longer have to spend as much time on data entry, they're free to use their skills better, improving the analytical and creative aspects of your business. It’s also easier for them to communicate and quickly access records as required.
A reduced error rate
Reducing manual financial data entry reduces the error rate in your records and means you won't have to deal with clashing records in different parts of your system.
You'll find it much easier to track errors back through the system when they occur, and you'll only have to fix them once. Making queries is simplified, reducing delays in invoicing and payroll, which keeps your employees and partner companies happy.
Because reports can be produced and compared quickly, it's easier to identify anomalies that might otherwise have been overlooked. The integration that comes with automation will make it much easier for you to see your organisation's overall financial position clearly and spot areas where things may be going wrong.
Better collaborative working
Automation software makes it much easier for different teams to work together by improving overall efficiency and integration between the systems used by different departments. It greatly simplifies project work, allowing the finance department to follow how money is being spent within a project team rather than just establishing an overall budget and hoping that the project manager will look after it competently.
This means that it's easier to keep expenses from getting out of control and anticipate when additional funding will be reasonable and necessary, allowing budgets to be adjusted more smoothly over time. Increased transparency reduces disagreement between departments and team members, improving the working experience.
Reduced costs and increased profits
There are numerous ways automating your systems can save you money. You won't have to spend nearly as much on employing people to do manual data entry.
You won't have to worry about invoicing errors leading to customers being undercharged or overcharged. Swift responses during online sales processes and fewer delays when problems occur will improve the customer experience, increasing customer loyalty and driving up your sales.
You'll experience improved integration – especially if you're using innovative equipment – which means you'll know immediately when equipment is approaching the point when it needs to be replaced. This makes budgeting more accessible, and you can even opt to have consumables such as paper and printer cartridges reordered automatically so that you never have to pay extra because you've run out.
Reduced barriers to growth
Automated systems are much easier to scale up than traditional multi-part systems. You'll still have the option of scaling up individual parts as needed (databases being the obvious example), and smooth integration means you won't have to worry about unexpected incompatibility. However, you'll also find that your system has a significantly improved ability to expand naturally as data sets grow and processing demands increase.
This reduces one of the significant costs associated with growth. When you do need to switch to more powerful systems, upgrading is simple and doesn't require halting production to make adjustments. Your staff won't have to learn new systems but will be able to continue as usual, with faster results.
The impact of automation on finance professionals
The ubiquity of finance automation tools in the mainstream market makes for an exciting time for all finance professionals.
Advancing technology and a diversity of automation solutions are driving down the cost of this valuable software, and the predicted benefits include everything from an uplift in profit margins to a drastic increase in productivity.
Recently, McKinsey & Company conducted a deep-dive investigation into the automation opportunities in Australia, revealing the immediate and long-term effects on the national economy.
From machine learning and artificial intelligence to advanced robotics and automation tools, the research firm explored the "enormous opportunity to restore momentum to the Australian economy and extend its 30-year boom in an inclusive way inclusively extend its 30-year boom".
By the end of the 2020s, intelligent automation will be a staple of our work lives, no matter what industry.
CFOs note that automation technology allows business finance departments to be more efficient and provides customers and clients with better outcomes because staff are more engaged.
According to McKinsey's research, this is driven by automation, which now accounts for up to 46% of current work activities.
That leaves more time for employees to support their clients while making them more productive and boosting economic growth.
If most Australian businesses seize this opportunity, McKinsey believes it could add $4 trillion to the economy by 2030.
Leveraging robotic process automation in finance
There is no denying that artificial intelligence in accounting will help our industry evolve.
Robotic process automation (RPA) is a business process automation technology based on artificial intelligence. When applied to automation, it can help replace manual processes in finance operations that are considered to be both sophisticated and mundane.
Far from being the technology that replaces finance teams, robotic process automation (RPA) is allowing businesses to do more with their resources.
Other levels of finance automation include predictive analytics, which improves data quality by providing finance teams with real-time insights to make informed, proactive decisions.
The future of finance is automated – are you ready?
In an age of hyper-connectivity, the need for automation solutions is more critical in financial services than ever. Now that you understand why automation is essential, please don't waste time incorporating it into your business systems.
Before adopting new finance systems and overhauling your entire business model, you must do your due diligence and uncover your business's most significant pain points.
Once you've conducted this exercise, your finance staff can shift their focus away from administration and onto the areas that make a difference to your business: monitoring markets and competitors, identifying opportunities, and finding ways to make your money more productive. Their analytical skills will come to the fore, and you'll discover their capabilities. Boredom is commonly cited as a reason for changing jobs, and this will likely result in a happier, more engaged, and loyal workforce.
Although all new software requires a bit of adjustment, automating your financial processes is one of the most straightforward changes you'll ever make. With improved data integrity, efficiency, security and transparency all on the table, it's a change you'll be happy you made.
We hope this article has illustrated how automated finance processes will play a vital role in disrupting financial professionals and the broader economy over the next decade. If you are ready to face your competition head-on and leverage the power of finance automation, remember to watch our 4-minute demo.