The finance function is poised to be reshaped by automation and artificial intelligence over the next few years. By automating the right processes and being prepared for business disruptions, organisations can experience a new era of productivity and performance.
While traditional accounting software and on-premise ERP systems remain functional, they are outdated and still require manual work on behalf of the finance department. This ultimately leads to slowed progress, uncertainty in decision-making in a fast-moving society and less productivity.
However, by introducing automation to finance operations, more work can be accomplished in the same time frame without reducing workplace productivity. This has all been made possible by advances in artificial intelligence and machine learning. Put simply, finance processes can be sped up, simplified, and automated using Cloud accounting software.
CFOs who have implemented Cloud accounting solutions have already reaped the rewards of this innovation. Reduced finance operations costs, quicker turnaround times, fewer errors, and minimal human intervention are just a few of the benefits. By increasing their focus on higher value-adding tasks, these advances have empowered finance teams, increasing their operating performance overall.
The sudden surge of technological advances can seem overwhelming. This is why our guide to finance automation has been compiled to help CFOs and finance directors better understand the benefits of Cloud accounting software and the potential it holds for the future of finance.
What is finance automation software?
Finance automation software is technology that uses machine learning and artificial intelligence. It is used for financial analysis, payroll administration, invoicing, collections action, and financial statement preparation. The leading benefit of using such automated software is that it reduces the need for human intervention for these financial activities.
What is stand-alone automation in accounting?
Finance industry professionals have long used standalone accounting software. In the past, traditional accounting software was typically purchased from a physical store, delivered as a physical product like a CD, and downloaded onto one device at your home or office.
Even though stand-alone accounting software is still available, it is not the most reliable version of the product, and as cloud computing grows globally and the need for remote working increases, stand-alone accounting systems feel slow, less flexible, and obsolete.
With the implementation of a cloud accounting software solution, CFOs can increase the flexibility, productivity, and security of their finance teams within an industry that is competitive and constantly changing.
How will automation affect finance?
Accounting and expense management are just a few of the core financial processes CFOs can automate to save time and boost productivity within the finance team. As well as ensuring accurate and consistent financial records, this also helps with agile decision-making and meeting compliance.
This will free up the finance team from having to manually maintain Excel spreadsheets so that they can focus on analysing and interpreting financial data and trends and helping the other parts of the company to create efficiencies and grow their business.
Automating tedious financial processes with accounting software is a small price to pay when the benefits are so significant. It is important to understand where you can save time by implementing finance automation.
Which finance processes to automate?
Accounts payable (AP)
Receiving, processing, and paying supplier invoices are all components of the accounts payable (AP) process. The accounts payable section of an account is where these transactions are recorded before the payment is made. Before automation existed, finance teams had to go through invoices manually, try to understand the data, then forward them to systems to complete their records. Anomalies in invoices were rarely discovered and suppliers were regularly contacted to resolve any issues.
Today, finance teams can focus on value-add activities thanks to invoice automation. Using invoice automation, most of a company's invoices can be processed automatically. In the past, this was also true for invoices received through Electronic Data Interchanges (EDI). The amount of automation also increased for invoices with purchase order numbers (PO), since the purchase order included all the necessary details about the invoice. Therefore, it was sufficient to get the purchase order to process the invoice.
There is, however, a significant share of invoices submitted without purchase orders. Deep learning has become an important component of modern accounts payable automation. Businesses can now automatically identify duplicate invoices, extract relevant invoice details, and create accounting entries based on automatically captured invoices.
Generally, accounts receivable is part of the order-to-cash process and refers to the money owed to a company by customers for goods or services delivered. Getting data from order forms submitted by businesses as images is the most difficult part of automating the process. Another deep learning approach, however, you can also automate this part of the process. Additionally, automation can be used to monitor receivables, send automated notifications to customers to keep track of long outstanding bills and calculate the provision for doubtful debt.
Reconciliation of accounts is another low-skill manual task for finance teams that takes up time. Any human errors made in the process, however, might cause significant disruption to businesses.
But, with automation, finance teams can:
- Instant access to ERP systems to extract the relevant information
- Verify balances between bank statements and general ledgers
- Reconcile accounts using a standardised format
Financial planning and analysis
Financial planning contains the long-winded process of preparing and compiling financial statements using a variety of departments in the Financial Planning and Analysis (FP&A) framework. Fortunately, elements of this framework can be partially automated.
- The collection and cleansing of data for analysis
- Generating standardised financial reports
- Validating and consolidating budget and forecast inputs
Source-to-Pay (S2P) is also known as purchase-to-pay or procure-to-pay (P2P) and involves a selection of a supplier for the completion of all payments. It typically involves the collection of invoice and payment information from multiple sources such as supplier emails, ERP systems, CRM programs, banks and retailers. But since not all of those systems provide simple integration methods, there's usually a degree of manual labour involved by finance teams.
Fortunately, CFOs and finance directors can use finance automation technology to identify manual steps to identify bottlenecks in these processes by using process mining tools.
A payroll administration process is essentially a way to arrange employee compensation. Employee hours, pay rates, and compensation can all be regulated and accounted for.
Here are some of the tasks which can be automated under payroll administration:
- Syncing data across multiple timekeeping systems
- Identifying and flagging timesheet errors
- Auditing reported hours against schedule
- Calculating deductions
How to start process automation in finance?
Accounting software and Cloud accounting software have become increasingly popular among medium and large businesses, though some are still wary of making the switch.
However, Cloud accounting software is very similar to the traditional systems that CFOs and finance teams have grown accustomed to. The main difference is that Cloud applications run off-site via an internet connection rather than on an individual desktop.
A key part of modern accounting and finance involves accessing and storing data anytime and anywhere. It is essential to the continuity and growth of business strategy. If it's chasing debts, staying informed about the next crisis, deciding business strategy, or paying wages, you'll need to be on top of it all.
It's time to discover what the future holds for finance
With our Advanced Financials accounting software, you'll have access to powerful and in-depth software for managing finances and automating manual tasks.
Increase agility and workplace productivity within your finance team by spending less time on tedious tasks, and more time on value-adding projects.