Guide: 10-step action plan to automate finance processes

Automation offers significant benefits to business operations. It not only allows companies to work more effectively and produce superior quality data, it also enables them to work much faster too.

Automating your finances and accounting manual processes can make a huge difference to your business operations, improving operational efficiency, streamlining processes and freeing your Finance team from the drudgery of mundane, time-consuming, error-prone tasks.

If you are planning to begin your journey towards Finance automation, the key stages are covered in this 10-step action plan. 

Are you ready to get started?

Here's your 10-step action plan to automate finance processes

1. Create the business case

It is likely that key people across your business will have already noticed that the Finance team are struggling to cope with the volume of activity undertaken day-to-day.

This issue is magnified if data is held in separate spreadsheets and systems; it’s also very apparent for companies actively pursuing a growth pathway. When it comes to financial data collection and processing, manual work often leads to human error and, ultimately, poor business decisions.

A good starting point, therefore, is to set out the business case for investing in a new automated solution so it’s clear how everyone benefits, not just the Finance department.

For most businesses, the best solution is cloud-based software which enables the integration of all sectors and departments into one efficient system and thereby unlocks a host of practical benefits including:

• Improved cashflow
• Better use of time and resources
• Enhanced coordination between staff members
• Improved margins
• Reduced risk of error
• Improved customer retention

Build the tailored business case for your individual business by evaluating and quantifying how these elements will be impacted by a new, more efficient, automated Finance system.

2. Set up an automation team

Before you begin, it’s obviously important to form an in-depth understanding of what is needed. You need to engage everyone involved or impacted so that they fully understand why automation is necessary, how it’s going to help, the process involved, and any special circumstances that need to be taken into account.

Some of these individuals may need to become part of the automation team that creates the solution specification, as human intervention is necessary to establish a strong foundation for automating financial processes successfully.

Potential primary and secondary stakeholders of automated finance software include:

• CEO/Managing Director
• IT director
• Finance Director
• Members of the finance team
• Heads of department
• Staff who submit purchase requests, timesheets, expenses and absence requests
• Indirect users of the system (such as staff who request information)
• Customers
• Suppliers
• Prospective customers
• Auditors

As you set up your team to define and roll-out the automation project, it’s worth taking input from all stakeholders as well as involving key individuals in the project team.

Also bear in mind that once you have started altering things within your company, you may realise that you need some additional expertise – either because you simply don’t have enough time to automate using the staff you have, or because you need more specialist knowledge. Bringing in an expert or two to your team, as well as a few people with key skills or experience, can make a positive difference, and the results will mean that it more than pays for itself.

3. Review integrated technology solutions

Deciding which automation software to use is a big step. Before you take it, you should do as much research as possible. Not only will your company have its own set of individual needs, but also be aware that every finance software package will have its own specific price points, qualifications, terms and conditions, as well as numerous specific features to offer. What is deemed a positive for one business may be completely inappropriate for yours, and what your business needs now may be different from what it needs in the future, so it’s also important to consider scalability in order to allow room for growth. Only the software solutions that can be scaled up as your business grows will prove to be the best long-term investment for your company.

Create a shortlist of providers and solutions that might be a good fit for your business and then request product demonstrations to establish how well each rates against your requirements.

Key questions to ask include the following:

• What database platform is the software built on?
• How easy is it to access information held in the system?
• Can the user change reports without any specialist technical ability?
• Will the software grow with my business, and what is the upgrade path?
• How can a BI (business interface) be used to integrate information from different systems and between departments?

Once you have reviewed demonstrations from several providers, you should be able to determine which software options best meet your needs. It is safe to make your final decision based on a combination of affordability, features and compatibility.

4. Assess workflow

Make sure you take enough time to fully map out the various workflows into, across, and out of the Finance function. This will be vital when planning how to transition from old to new systems and will enable you to focus in on the areas where automation can bring the most benefit.

With improved organisation, including predefined workflows that manage the exchange of information, approvals and rejections, you’ll save a lot of time and trouble in the long run.

A streamlined workflow will also help to meet regulatory requirements for core areas such as payroll, data protection, carbon emissions tracking – all with reduced risk of error.

Introducing financial process automation into workflow areas with a high burden of admin or manual data entry (such as expense payments, accounts receivable) should significantly increase employee satisfaction too.

5. Streamline processes

Defining your processes and workflows as part of your automation project also provides the opportunity to make changes and streamline what happens to better effect. The switch to automation will typically give you a system that is highly configurable and customisable. That’s not only a positive for your internal teams; it can make a difference to your customers too by introducing flexibility which allows their preferences to be incorporated into your standard processes. Key areas to consider for streamlining include purchase orders, quotes, payment processing, invoicing and reporting.  

6. Data cleanse and transfer

It’s well worth spending time cleaning your existing data before moving across to a new solution for the obvious reason that if you put inaccurate, duplicate or out of date content in, it’s guaranteed to cause issues. The transfer of your data from existing disparate systems (or even standalone spreadsheets) must be done properly to ensure that your finance automation project gets off to a good start.

It is worth it. As well as ensuring your core workflows and processes work properly, you also have increased control going forwards, including an approval system based on multi-level routing for example. And you’ll have increased access to key information, allowing quick and easy distribution of reports to decision-makers at all levels. Better insight, control, and day-to-day use of your data helps to increase business scalability and remove barriers to growth too.

7. Phased implementation

When faced with a large-scale task, it’s easy to feel overwhelmed. When this happens, it’s most beneficial to pick something small and do it to get the ball rolling. The same applies to automation. Begin by choosing a small area to work with that won’t be too difficult. Then, after you make one small change and adjust to it, you can begin brainstorming what to do next and take more small steps, learning as you go along. Begin by defining a process that needs to be done, codify it, automate it, and continue.

Integration of Finance with other systems should be part of your bigger plan as a joined-up approach will unlock further benefits by creating a more connected and effective network which enables managers, employees and other organisations to easily interact. Successful integration means getting all systems and departments to communicate and work together in a harmonious way, simplifying administration and facilitating more effective collaboration.

8. Implement financial controls

One of the powerful benefits of benefits of finance automation and using a modern software system is the ability to incorporate automated ‘gate-keeping’ – something that has a significant impact for Finance. Effectively utilising key features to create streamlined approval processes, generate alerts when specific parameters are hit, identify errors in a timely fashion, and put in safeguards that reflect multiple inter-dependencies are all ways to implement more effective financial control. This level of active business protection puts Finance firmly in the driving seat and enables much closer monitoring in real time.

9. Educate and train

Once your new system is up and running, you’ll need to make sure that all your employees are engaging with it successfully. Provide sufficient training and ensure everyone knows who to turn to with questions if they don’t understand something. Be firm about the final switchover point even if some are resistant. It’s natural for people to be hesitant about change, but once they get going, they will usually manage much better than they expected.

10. Review and adjust

Finally, it’s unlikely that the first implementation of a new system or set of automated processes will be completely right for every employee or business. It’s useful to set a review date when any problems identified can be dealt with. Taking time to review how the system is working, encouraging feedback, and continually looking for ways to tweak or enhance specific elements is a normal part of the evolution of your business finance transformation.