Financial processes are not just important, but absolutely crucial to the success and growth of any organisation. They serve as the backbone of a company, ensuring that money flows seamlessly through every department.
From budgeting and cash flow management, to payroll and expense tracking, these functions are responsible for the efficient circulation, management, and processing of funds throughout the entire business.
They provide valuable insights into the financial performance of the company, enabling the management team to identify areas of improvement and make strategic decisions to drive growth.
With such importance placed on these functions, many organisations look for ways of automating business processes. In this article we outline the five financial processes that will benefit the most from automation.
Financial process automation removes manual, time consuming work and replaces it with computer software and / or artificial intelligence to reduce errors and speed up operations.
Tedious tasks such as re-keying data from one source into another or printing documents to manually process them are no longer required.
Where automation is implemented correctly, it can significantly improve efficiency, accuracy, and speed in various financial processes.
Automation can streamline the entire accounts payable process by applying digital workflows. Automation tools can automatically capture data from incoming invoices, match them with purchase orders and receipts, and route them through approval workflows.
Financial processes are improved greatly as the manual effort required for data entry is reduced as information is taken straight from the invoice, accurately captured and pushed into an ERP or finance system.
Automation minimises errors where data may previously have been keyed in wrongly while simultaneously speeding up the payment process.
For large organisations in particular, expense reporting can be one of the most time consuming financial processes, due to the large volumes of transactions and receipts that need to be recorded.
Automating expense reporting allows employees to easily submit receipts and expenses through a digital platform rather than a spreadsheet or via paper. The system can verify policy compliance, flag potential discrepancies, and accelerate the reimbursement process.
The platform saves time for both employees and finance teams as paper receipts no longer need to be collated and submitted. At the time of the expense purchase, the receipt can be photographed and uploaded into the expense management software. Similarly, electronic receipts don't need to be printed as the same rules can be applied.
A digital system reduces the chances of fraud or errors as automatic checks are in place in the software so discrepancies are automatically rejected. Paying employee expenses quickly keeps your teams happy and motivated.
Automation enables data to be gathered from various sources and consolidated into one system. Information can be pulled from ERPs, finance systems or CRMs to create a dashboard where data can be easily tracked and compared.
Financial reports can be generated with minimal manual intervention as the most up to date information is being used.
This is particularly valuable for routine reporting tasks, allowing financial professionals to focus more on analysing data and providing insights to support decision-making.
Financial processes like accounts reconciliation involves comparing and matching data held in general ledger accounts, balance sheets, bank statements and sub-ledgers. With lots of steps and moving parts the chances for error are greatly increased.
Automating accounts reconciliation can help identify discrepancies and errors more quickly, reducing the risk of financial errors. Automated reconciliation tools provide audit trails for better transparency which then improves quality and compliance procedures.
With the increasing sophistication of fraudulent activities, implementing automation in this area is crucial to effectively identify and mitigate risks.
Automation can enhance risk assessment and fraud detection by using algorithms to identify unusual patterns, anomalies, or suspicious activities in financial transactions. Machine learning models can continuously learn from historical data to improve accuracy in detecting fraudulent behaviours.
Automation allows for immediate alerts which enables swift action to be taken to prevent further damage.
We believe invoice processing automation should be a key focus when looking to improve financial efficiency and is the reason why many of our clients initially came to us.
Automated invoice processing involves using technology to streamline and expedite the handling of invoices within an organisation. Tackling financial processes efficiently requires an approach which will reduce manual data entry, minimise errors, and accelerate the overall invoicing and payment process.
The below image shows how invoice processing automation typically works.
It's worth noting that while automation can greatly improve financial processes, careful implementation and monitoring are essential. Proper setup, ongoing maintenance, and oversight are required to ensure that the automated systems are working effectively and that potential issues are addressed promptly.
Additionally, the role of human judgment and decision-making remains crucial, especially for complex financial matters and exceptions that may not be easily handled by automated systems.
Implementing software to manage financial process automation requires selecting the right software or service provider, integrating it with existing systems, defining workflows and approval processes, as well as training staff on the new system.
Regular monitoring and adjustments are important to ensure the system continues to meet the organisation's needs and objectives.
For more information on automating your financial processes get in touch with our team.