The last decade saw automation steadily strengthening its positions in offices across the globe. Investing in business management process consulting, enterprises have increasingly streamlined various cumbersome workflows, reaping productivity and cost optimization
benefits in return.
However, amid this persistent corporate automation trend, finance departments were frequently overlooked in the transformation strategies, left to handle their spreadsheets, paper forms, and accounting books manually. Only recently, finance management automation
has started to rise to the fore, with 68% of CFOs expecting to dedicate more effort to it this year, according to
Gartner’s Top Priorities for Finance Leaders in 2021.
In this article, we will explore what real-life finance automation use cases are already making a difference for the adopters and why more and more enterprises today are pivoting towards it.
The modern state of finance automation
Contrary to how it may appear, financial automation does not imply that bots will hold the reins and handle corporate accounts, transactions, and financial decisions unassisted. Instead, it involves integrating custom or out-of-the-box software, robotic
process automation (RPA) tools, or AI algorithms into the financial department’s workflows to take over certain separate tasks and processes, while employees stay in control and supervise the bots’ performance.
Today, with the advancement of automation and the proliferating fintech market, companies can choose to entrust a wide range of tasks to bots and algorithms. At the moment, the most popular candidates for automation are tedious, time-consuming or error-prone
processes that drag financial teams down. To better illustrate how automation can take day-to-day workflows up a notch, here are a few most common use cases right now:
- Financial accounting. Apart from tools that take care of the day-to-day grunt work, there are also more advanced RPA solutions that can handle account reconciliation, invoice processing, and cost allocation.
- Tax accounting. Aimed to free up hours of routine work for tax controllers, automation software extracts tax data from bills, receipts, invoices, and other financial documentation, calculates tax provisions and adjustments, and ensures corporate
- Payroll management. Payroll systems schedule and automatically perform a variety of employee payments, from monthly salaries to hourly wages. Using data from corporate time-tracking and project management tools, they can also calculate overtime,
pay raises, bonuses, and reimbursements and add them to the final sum.
- Reporting. Powered by RPA and AI engines, this type of software helps CFOs and other key decision-makers to prepare quarterly and annual statements by gathering and analyzing vast sets of corporate financial data.
4 key benefits of finance automation
Now, with a clear picture of the finance automation state and capacity, let’s look into the ways the technology elevates traditional financial operations and helps drive better business outcomes.
The scope of the financial department’s responsibilities is typically a wide one, with some tasks requiring analytical expertise or customer service skills, with others being mundane paperwork. In this context, perhaps the most appealing advantage of financial
robots and algorithms is their invariably high performance. Unlike human workers, automated tools can operate 24/7 tirelessly, performing manual and repetitive tasks, like entering and consolidating data, or sophisticated operations, like budget approval,
much faster while delivering equally high-quality results each time.
Thus, leveraging automation software, companies can digitize and accelerate the most time-consuming operations, enabling their teams to work more efficiently without investing extra effort or hiring new talent. In the long run, automation can contribute
to a 30-40% work time reduction in financial departments, states
The PwC Finance Benchmarking Report 2019-20.
No matter how expert your finance team is, they are only human, prone to making mistakes out of oversight, fatigue, or negligence. Unfortunately, when it comes to corporate money matters, errors may entail a range of repercussions and reputational risks,
from underpaid salaries to poor investment decisions.
By letting algorithms handle high-volume data entry and complex calculations, financial departments can eliminate potential human-factor faults and improve the reliability of their output. In a year, according to Gartner, automation can
save finance departments up to 25,000 hours, or 30% of an average employee workday, of avoidable rework spent on correcting the mistakes.
For accounting and other financial operations, consistency is an underlying guideline. However, each new employee joining the department is likely to be unfamiliar with your established practices and will need time and guidance to adopt them. Also, companies
may update the principles to better suit their evolved needs, so until all team members get used to them, reports and accounting books might become riddled with mistakes and inconsistencies.
When an automated solution is in charge of a financial process, you can rest assured it will perform the task using the same method and deliver standardized results each time. In case your operational guidelines change, all you need to do is to tweak the
algorithm, and reports will conform to the new requirements from that moment on.
Contrary to technology pessimists’ beliefs, automation won’t steal jobs but reduce the workload and make the workday more meaningful and fulfilling instead. AI and RPA solutions can take over cumbersome manual tasks that eat up hours of high-skilled employees’
time and give them the opportunity to focus on more intellectually demanding analytical or creative assignments.
As a result, working at a relaxed pace but nevertheless bringing the same or higher value to the company, team members are very likely to become more engaged and motivated. Down the line, these sentiments will have a direct impact on corporate growth.
The modern business landscape is growing more digital and fast-paced, and to stay competitive, companies can’t afford to be held back by the time-consuming and error-prone manual processes that finance and accounting departments abound in. Against this backdrop,
automation emerges as a sure-fire way to optimize and streamline key financial workflows, allowing finance teams to focus on more strategic tasks.