How have your business processes evolved in the last few years? To what extent has the use of tech to drive automation gone from being a "nice to have" to a "must-have"?
According to a 2019 report from Gartner, automating finance processes can:
- Save as much as 30% of a full-time colleague’s day.
- Avoid thousands of hours of rework in auditing and correcting human errors.
Those numbers paint a pretty clear picture that you should consider finance automation a must for your business!
What is finance automation?
Gartner gives a great definition of finance automation, so let’s hand things over to them:
“Finance automation technology integrates machine learning and artificial intelligence for use in areas such as financial analysis, payroll administration, invoice automation, collections action, and preparing financial statements. The use of such automated software reduces the need for human intervention in these activities.”
How does finance automation work?
It depends on what it is you want to automate!
There are several ways you can implement automation in your business, including:
- Automations that require human triggers as input to start a process.
- Automations that you set up once and that can then repeat at an instructed frequency.
- Integrating finance automations with other apps you use to automate wider-reaching workflows and processes.
The best way to look at how finance automation works is to consider the processes you can automate.
Accounts payable and receivable
Paying invoices and ensuring you receive payments on time is vital to the operation of any business.
Using software to manage your accounts payable processes means you can easily integrate procurement with finance processes and automate the whole process from generating a purchase order and a contract to the payment itself.
With accounts receivable, not only can you automate the creation of invoices, but you can also automate the following up process to send reminder emails, for example. You can then integrate this with other tools to help you manage any delinquent accounts, depending on your business model and debt recuperation strategy.
Bookkeeping and accounting
How much does your business pay to accountants each year? Whether you outsource your bookkeeping and accounting or have an in-house finance team, it can be a hugely inefficient process when done manually.
Of course, these are essential processes but can quickly be done by software.
Payroll is a fantastic example of a process that you can automate, but that may need to be triggered by users.
For example, users may be involved in an automated payroll process by:
- Clocking in and out to ensure they’re paid correctly.
- Using either your payroll software or an integrated HR tool to request holidays.
- Self-managing things like pension payments.
However, once your payroll software has all the information it needs, it can do everything itself. Wave goodbye to filing cabinets full of payroll spreadsheets and checking up manually when someone says they weren’t paid correctly!
Expenditure and wider financial analysis
When you are busy running a business, it can be challenging to keep abreast of everything you are spending. You may even use your expensive accountant or employ a financial analyst to keep tabs on everything.
Again, not necessary!
You can use software to automate financial analysis, trigger alerts, and prompt a further investigation for dramatic changes in expenditure or if specific trigger points are reached. Of course, you can complement this with some human involvement, but get the software to do the bulk of the work for you!
Remember integrations, too!
We have looked purely at financial processes above, but remember that you could integrate finance automations into your wider workflows. For example, financial automations could be part of everything from contract and other document automation to your CRM and client off-boarding processes! It is not going too far to say that financial automation could play a role in every part of your business!
How can finance automation help grow your business?
Utilizing finance automation has the potential to be a gamechanger. When talking about automation, it is tempting to always look at how it does things like save time and increase productivity.
Of course, they are genuine reasons, but what does automation help you to do on the back of these benefits?
You can scale your business easier
If you are an old-school business with all your processes carried out in person, you are always limited by how much you can do. As such, when you want to grow your business, that means hiring people to take on the additional workload. This can then leave you in the situation of being an ambitious business leader, but being uncertain of whether pursuing growth is worthwhile if a new hire will put pressure on your margins.
You have none of those concerns when you are automating financial processes. Sure, you might need to move up to the next tier of the software you use. But you won’t ever need to worry about your automations not being able to handle the workload!
You grow trust in what you do
Word of mouth is the best marketing there is, and when your business can be trusted, people will talk about it.
However, growing trust is not just about attracting new customers but about keeping your existing ones happy. Eliminating human error does not just save you time and money; it helps your clients, too. If they need to spend less time following up on invoicing or servicing queries, they have more money to spend elsewhere. Perhaps even on what they pay you for your services!
On a larger scale, individuals and businesses who know that your company is trustworthy with data – software beats spreadsheets every time – will find it much easier to decide they want to work with you.
You can grow your most impactful departments
This is not designed as a knock against your finance team! They do an essential job for your company.
Still, with your finance processes automated and taken care of, when you need to hire people, you can look at filling roles in impactful departments rather than needing to hire for repetitive work. This means you can supercharge your business growth, all on the back of using automation!
Implementing finance automation in your business
Finance automation is about far more than saving a few dollars by choosing a great piece of payroll software. It can be transformative for your entire business, integrating with every department to make everyone more effective and help your business grow.
How much more impactful could your finance team be if they got hours of their time back each week because a piece of software could do their job?!