Financial and accounting processes are arguably the most complex and most demanding professional areas of business functions. Keeping up with an updated and ever-flowing data stream leaves even the most experienced accountants exhausted and dreary. Why? Because managing accounting and financial processes requires technical know-how, mental ability, pressure handling ability, and commitment. Introducing business automation processes in finance is the answer to this question. So what is business process automation in finance?
Simply put, finance process automation is the use of software and technology to automate critical finance-related tasks. It enables financial individuals to streamline processes and ensure that everything runs smoothly in the organization. Manual business processes are tedious, time-consuming, and prone to errors causing process bottlenecks and impacting company cash flows.
Technologies like artificial intelligence, optical character recognition, blockchain, and robotic process automation make finance automation a reality. Standard financial processes that are often automated include:
1. Credit control
2. Financial reporting
3. Bank reconciliation
4. Journal entries
5. Expense management
But how exactly does financial process mapping come into play in a company’s accounting processes? Is there a need to incorporate often this expensive software into your business? This article will discuss the benefits financials get from using automated finance processes. Please keep on reading.
Get Smarter Financial analysis on Real-Time
A financial automation tool gives a financial expert a comprehensive picture of the entire financial ecosystem. It provides powerful business reports like income statements, profit and loss statements, payment performance reports, and income statements at the ideal time. Using these reports, financials can effectively determine their revenue forecasting numbers, study their profitability index, calculate their earnings per share and make suitable changes to enhance their financial position.
Eliminate Manual Errors
Even if you have a good memory, keeping all financial records about your business can be challenging. While human errors are forgivable, slight mistakes in accounting can lead to costly and potentially embarrassing inaccuracies. Even an additional zero or elimination of a single letter can cost the business huge sums of money.
Finance automation eliminates these risks. It helps avoid inevitable human errors arising from incorrect data entry, copy/paste mistakes, or even changes in file formats that produce unexpected results when computing intercompany accounts. Automation in finance deals with everything from scanning invoices to reconciliation, giving financial personnel an easy time.
Reduce the Risk of Fraud
A leak or fraud in financial data can be disastrous for any business. It could lead to revenue loss, operational disruption, reputational damage, regulatory sanction, to name a few. The manual process of storing data in spreadsheets places an organization at risk as anyone can assess it. Let’s face reality. Does it require rocket science to hack into a spreadsheet?
Incorporating efficient financial software helps financial individuals to have complete control of workflow, only allowing authorized people to access their business financial data. The cutting-edge technology used in automation also plays a significant role in detecting and preventing fraud before they happen.
Automation Save Financials Time and Resources
A typical day of an accounting professional involves:
1> A lot of manual data entry
3> Reconciling accounting payable and receivables
4> Processing invoices
5> Making compliance payments.
These activities are usually time-consuming as they require extra care to avoid the probability of making losses.
Why go through such tedious tasks of filling the information manually when automation can take care of them accurately in a fraction of time? Automation in finance means faster financial processes allowing stakeholders to spend time on things that matter to the organization.
It Leads to Centralized Access and Control of Finance Operations
Aside from increasing the overall efficiency, automation software makes it easier for different teams to work together. It helps finance officials to track down how money allocated for a particular project is being used rather than just establishing an overall budget and hoping that it will be adhered to. This means that financials can effectively prevent expenses from getting out of control and anticipate when additional funding would be necessary. A cloud-based control system can help promote a centralized management function with clear insights and visibility. This is important for business leaders so that they can get a big picture of company direction, financials, and help to simplify, store, and manage bid data warehouses.
Cloud Computing Benefits
One of the most useful applications of business automation tools is to use cloud computing. This allows for big data, both structured and unstructured, to be organized, sorted, and easily accessible in an online database. Keeping all of your company information, financials, and other pertinent data in the cloud can help against cybersecurity threats, reduce costs, and boost best business practices so your company can run smoothly.
Whether budget approval, compliance payments, or a reimbursement claim, having an automated system will help financials save more than eight hours a week. As an added advantage, when all your systems are mechanical, you get a complete picture of your financial reports, which will help you to make faster and safer business decisions.
From a financial perspective, limiting errors, better control, speedy approvals, more intelligent financial analysis, and reduced risks are potent arguments for adopting an operations automation solution. However, the benefits of automated solutions come with a lot of obstacles. As long as you understand these obstacles and balance them to the benefits of these solutions, they should not interrupt your plans for acquiring automated financial systems.