Embracing Automation of Finance Processes

Finance Automation

The trend over the past decade has been to adopt and integrate more innovative ways of working across critical business services. Many of these improvements have focused on finance processes, given their significance in supporting enterprise operations. Nevertheless, lucrative opportunities remain.

Every workflow and process in your finance department involves a range of people, systems, and data. Automation helps in coordinating all the moving parts by eliminating manual tasks, enhancing collaboration, and keeping work items in motion. This is not to say that it replaces people with robots. It simply means we use automation to handle repetitive, time-consuming manual tasks. By automating these aspects, people in your department can direct their efforts toward creating value and driving strategy.

Finally, the trend over the past decade has been for finance functions to partner with the business in a more collaborative way, to support the latter’s objectives. Meeting service-level agreements alone is not enough. Today, given the ability to automate transactional work, functional teams can focus on the underlying data and intelligence that is so critical to the enterprise. Moving into a true business partnership role defines enterprise success!

The need to automate finance processes

The roles and responsibilities of the finance teams are constantly changing. With the range of technologies now available there is no excuse to soak up your finance team’s valuable time and effort with clunky manual processes. The primary goal of finance automation is to improve process efficiency by reducing or eliminating repetitive tasks or activities that do not add value and achieving business process excellence. Let’s dig deeper into the importance of automating finance processes

• Increasing Operation Efficiency: you might think this is something that is very difficult to achieve but, it is as simple as freeing up your team from repetitive manual activities by automating the process which in fact helps to ensure that processes are executed faster and with less effort.
• Reducing the errors: Manual tasks and transposing information from one place to another – between Excel sheets and core applications, open potential for human errors. Automation helps to address this and reduce the scope for inaccuracies and ensure consistency of accounting processes hence preventing any escalation.
• Enhance customer experience: Finance processes involve interaction and communication with an organisation’s customers. If you do not have the ability to interact with digital channels or have up-to-date data, this can leave a negative perception on the client. If you are still sending physical invoices in the post /manually attaching them to emails or chasing customers for debt that has already been paid are clear signs that your processes need attention.
• Improve employee engagement: Teams that are forced to work with outdated processes and applications quickly become frustrated and disengaged. That can affect productivity and impact customers which will lead to dissatisfaction. Bringing in automation can help sort this issue in an effective way.
• Complying with regulations: By consolidating data from disparate systems and auto-generating compliance reports you can limit the risk of reputational damage and fines.

Core finance processes that can be automated

We know there is a colossal list of processes in finance, but we cannot automate everything as it has some limitations, so let us discuss the core process which can be automated to so keep your business floating. Let us start with addressing the elephants from the list.

• Accounts Payable

An accounts payable typically includes several manual processes, such as:

1. Making sure invoices are properly approved before issuing payment
2. Ensuring sufficient funds for each payment
3. Adhering to payment terms that vary from one vendor to another

With finance automation your accounts payable system directly to purchasing or reimbursement workflows to be sure you process only approved invoices. You can also use automation to integrate accounts payable processes with financial planning tools so that budget is allocated automatically before invoices reach accounts payable.

• Reimbursements

Requests that seem straightforward can become bottlenecks when there are many employees submitting requests in multiple channels. Common challenges include:

1. Poor visibility into expenses because of unstructured forms or lack of integration with other systems
2. Delayed reimbursements due to expense reports that are filed late, or are missing information

Automation can address these pains by:

1. Providing a repository for clear information
2. Providing a structured workflow for each reimbursement request
3. Sending automatic notifications to approvers
4. Allowing employees to track the status of their requests

• Purchase and Procurement

The ad hoc nature of many purchasing requests results in purchase requisitions with missing or incomplete information. Common problems include:

1. Lack of spending control and visibility due to impromptu orders and purchases made outside the company’s procurement process
2. Incomplete or inaccurate data due to unstructured request forms, manual data entry, or receiving requests from multiple channels
3. Contract compliance issues arise when a finance department must examine the contractual obligations of multiple suppliers

You can avoid these issues by using finance automation to standardize purchase request creation, and set purchasing conditions, mandatory actions, and automation rules that prevent errors and ensure policy compliance when purchasing requests are processed.

*Source: Gartner (April 2022) Report

The Future of Finance Process Automation

• Digital Workflows –  The use of digital workflows allows your organisation to move from manual and physical processes to robust and efficient electronic ones. Digital Workflows ensure that the process steps are followed to the desired outcomes and in the correct sequence.

• Document Processing – Process Mapping and document processing automation applications help you to dramatically reduce the manual keying of data from documents that are needed in subsequent processes, e.g., supplier invoices, expenses, and remittances. Data is automatically read, validated, and pushed into appropriate applications.

• Robotic Process Automation: RPA assists your finance function to alleviate the transposition of data between systems. Tasks often involve you using Excel as a way of pulling together information from multiple sources and manipulating it into a generic format. RPA allows these tasks to be automated by ‘mimicking’ the manual process as a series of process steps.

• Blockchain:  To make transactions secure and data reliable. Blockchains enable digital, real-time contracts, faster operations, and reduced costs for maintaining a central database. As integration and governance improve, blockchain is transforming the F&A process.

• Cloud-based software: It offers flexibility, scalability, and performance while optimising costs, improving governance, and allowing remote workers immediate access to databases and records previously restricted to the on-premises-only system.

AMO & Finance Automation

The team at AMO combines unmatched technical and business expertise to create innovative, tailor-made software solutions that deliver world-class financial operations and insights. From assisting our customers to automate their end-to-end finance and procurement processes, to delivering applications for financial review committees, we have enabled them to bring control, visibility, accountability, and efficiency to their finance workflows.

Want to know more about finance automation, join AMO Consultancy and Nintex in London on the 15th of November. This in-person event will focus on creating value in Shared Services Organisation and how to rethink your finance and procurement functions amidst uncertainty.