Building the business case for Accounting automation software

As a starting point, most Finance functions seeking to upgrade will be working with a legacy finance system alongside other operational software as well as standalone spreadsheets and reporting.

When working with a non-integrated combination of data sources and tools, employees will have to use multiple applications to complete a single task and view the resulting data. This is in addition to the extra work involved in dealing with any complications that arise.

The future of accounting, undoubtedly, involves automating processes such as invoice processing, accounts payable and receivable, and any other manual, repetitive tasks to reduce the number of human errors made by the accounting team. This can be achieved only by implementing a powerful accounting automation tool and training dedicated staff to get the most out of such software.

A cloud-based accounting software can integrate seamlessly with other applications and draw data into a single dashboard which offers various workflows and functionality to support the day-to-day processes carried out by Finance. Some of the steps involved in this can also be automated.

The key areas to assess to build your business case are summarised below.

Error rates

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 of it. 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.

Productivity and efficiency levels

By reducing the need for manual processing, more streamlined, purpose built 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 reporting can be done automatically, while other procedures can be streamlined. Expenses software, for instance, needs manual input and approval but makes calculations and keeps files organised by itself.

By choosing a Finance package that fits closely with the needs of your operation, it’s possible to cut down the amount of time and resources needed to complete regular tasks.

A cloud-based accounting solution with some elements of self-service can also help to reduce the workload for Finance for traditionally time-consuming areas such as timesheet to payroll, and expenses processing.

Clarity and opportunities for strategic insight

The decisions made at the very top level of your business depend on access to good-quality reports based on up-to-date data from each department.

When your systems depend on manual input, updates are slower, and when they are disconnected from one another, it’s impossible to cross-reference them in real time. This makes it much more difficult to report accurately, and your Board will not be as well-placed to react quickly and effectively to changing events.

Data shared within the business or between divisions or companies in a group should be easily accessible and not hard to find. There should never be a chance of information going missing due to a lack of organisation.

This can cause gaps in your data and means that time is wasted trying to figure it out and sort through it all to locate what is needed. As part of your business case, it might be useful to look at the amount of time and the number of people involved in compiling the reports provided to the Board on a regular basis.

Using automatic financial processing enables every part of your financial management system to be connected, which helps you see the big picture of what’s going on within your company. This makes it easier to follow trends and identify areas where improvements can be made.

Payment performance, penalties and cashflow impact

Unintegrated software often leads to disorganisation. This can cause huge issues, such as being unable to see and track who has been charged, at what rate, and who has paid during a transaction.

Without this information, a business can steadily lose income and not even realise it, so it is vital to become aware of any such issues and counter them. Another problem with disorganised finances is the risk that your company is missing important due dates and payments because of poor communication and may incur penalties as a result.

Conduct an assessment of your payment performance over the last year or three years; identify any penalties that could have been avoided; quantify the impact of problems that have taken time to identify and resolve.

Information security and disaster recovery

The firewalls, virus protection and ongoing investment in state-of-the-art security that cloud providers have to deliver will be far superior to anything an individual company IT team will be able to reasonably provide. That’s important because the cost to the business of dealing with a data breach or hacking event could be huge.

Even on a smaller scale, data leaks, breaches of employee privacy, or lapses in the confidentiality of customer data (even if unintentional) can cause problems that can damage the business and the brand and may also prove costly.

The Finance solution can address this in multiple ways. Firstly, because fewer individuals need to interact with the system, it’s easier to prevent the leaking of sensitive data.

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.

That also means that you can quickly identify who was responsible for any oddities in the data, so you can direct queries appropriately, and it makes every aspect of auditing faster and easier. It also significantly reduces the risk of fraudulent activity going unseen.

Compliance

Weak audit trails create risk in your business. If your accounting software lacks entry validation this could cause issues with compliance. You need to be able to easily track the history of transactions. Not only does this prove the validity of the financials but also protects against fraud as well.

Ultimately, more transparent processes are appealing to shareholders, reassuring them that everything in the organisation is above board.

And from a business case perspective, it’s easy to quantify the potential fines and penalties at stake as a result of compliance breaches for GDPR for example.

Talent retention

A new issue that has arisen for Finance teams recently is the upsurge in talented staff who seek out employers who offer flexible working. Finance systems have typically been located on site as traditionally that meant that security could be maintained most effectively

The advent of highly secure cloud-based solutions has changed that. Not only is a modern solution hosted in the cloud a much more secure way to maintain and back-up your financial data, a cloud solution can also be accessible from multiple locations.

That gives your Finance team much more working flexibility – and may help you keep the talent you currently rely on (and who would be expensive to replace).

In conclusion

A financial management system that can offer both automation and integration is a fundamental requirement for modern businesses.

Those that use financial software with functionalities such as optical character recognition (OCR) or automated invoice and expense processing are able to streamline their workflows and maximise their efficiency.

Data is input faster and with greater accuracy; all relevant departments and stakeholders are kept up-to-date through automatic integration.

Everyone involved in a specific project, both within and beyond the Finance team, can instantly access the latest information through a central dashboard that automatically updates in real-time.

Improving data sharing and communication in this way will, in turn, encourage more efficient collaborative work.