Finance and accounting processes are a vital element of business. Business leaders expect the finance and accounting department to run as efficiently as possible to ensure that payments are processed quickly, and reports are created on time to share insights and aid decision making. Finance automation is no more a ‘good to have’ for businesses. It has become a necessity to replace error-prone manual finance functions.
Automation in finance and accounting is a key metric to business success, achieved by reducing repetitive administration tasks and ensuring data is consistent and error-free. To thrive in the competitive landscape, finance professionals need to take on the role of a crucial strategic business partner rather than doing time-intensive repetitive manual accounting tasks.
Also Read: RPA Implementation: 5 Best Practices
Importance of automation in finance
Automation in finance plays a vital role for an organisation as all financial data must be free from error, as even one error can cause financial loss to business such as unwanted transaction, additional amount paid, etc. If an error appears within a finance process, it can have a significant effect. This can include coming under scrutiny from business regulators.
Automation in finance helps organisations to ensure that their finance processes are efficient, accurate, and delivered on time. Impact of automation in finance include:
- Reduction of manual data entry tasks and related human error
- Increased speed in processing financial data
- Seamless decision making due to error-free reports
- Improved compliance
Impact of Process Automation on Finance
A finance automation tool gives an organization a comprehensive picture of their entire financial ecosystem. It can generate business-critical reports such as Profit & Loss statement, income statements, cash flow statements, etc. automatically. Using these reports, organizations will be poised to take business decisions faster.
There is significant value in embracing automation for finance processes such as:
- Eliminate manual errors – Finance professionals can do away with manual data entry and balancing accounts as automation will take care of everything right from scanning invoices to reconciliation without any manual intervention.
- Save time and labour – Automating manual data entry, invoice processing, reimbursements, payable & receivables reconciliation will save time and improve efficiency across the team.
- Improved financial data accuracy – Finance automation will ensure that data is always accurate and consistent across systems.
- Faster processing – Automating reminders, payment alerts to vendors can fast-track collections without having to depend on manual interventions. It helps to reduce processing times resulting in accurate and timely debt chasing and assisting in automatically notifying associated personnel of critical activities.
- Increased data visibility – Increasing data visibility means that financial and accounting data can be used across the business and be processed more efficiently. Providing leaders with data visibility across finance levers that will help them to make strategic decisions faster.
Process Automation in Finance
Process automation in finance has fast become a valuable tool to improve productivity and increase output. Deciding on the finance processes that must be automated can initially seem like a challenge. One of the first steps in determining your process automation strategy is to understand your business requirements.
Few of the tasks or processes that can be automated with the help of RPA (robotics process automation) are as follows:
Month-ends for finance executives are always chaotic because of reconciliation of statements. If the bank statement does not match the book of accounts, it can be a sign of distress. Automating the reconciliation process will ensure accuracy and highlight entries that require attention. It will help to accelerate the process and enable faster rectification of mismatched entries.
Accounts Payables & Receivables
Payables – It require collaboration between the procurement and finance departments.
- Product finalization by procurement
- Purchase order Generation
- Invoice Generation
- Payment Processing
- TDS calculation
Automation of some of these steps can save a lot of time for both teams. Automation can help with uploads and tracking of invoices and purchase orders along with processing TDS of payments.
Receivables – Automation of accounts receivable ensures that payments are received on time. It allows tracking of sales invoices and matching them with the subsequent receipts received from the customer. Manual tracking of invoice can be tedious, whereas, RPA bots can create and send GST compliant invoices, and read the receipts in minutes.
Journal Entry Automation
Journal entry is a time-extensive labour-driven process which requires the completion of data validations, error corrections and approvals to be uploaded to an ERP system. This manual process can lead to delays in collating data from numerous sources throughout the business, which could result in failing to meet essential deadlines.
Journal entry automation helps you to automatically create, update, and approve journals which can be inserted to your ERP system. The benefits of automating the process are:
- Automatically create, update, and approve journal entries
- Automated PO accrual process
- Automatically upload journal entry posts to ERP system
- Guaranteed audit trail for each activity
- Store supporting documentation digitally
First Step towards Digital Transformation
Automation provides organization with a platform for digital transformation. RPA provides finance leaders with the ability to integrate systems and automate any business processes quickly and easily to improve the way the whole business operates. RPA can be applied to procurement, warehousing, sales and marketing activities, reports, MIS, etc. to remove manual dependencies from redundant tasks that cost the organization time and money.
Over and above RPA, some organizations have already started to utilize cutting-edge tools and technologies such as intelligent automation (IA), advanced analytics, robo-advisors, and self-learning programs.
Clover Infotech has developed its own center of excellence for automation that enables organizations to leverage process automation to reduce costs, enhance employee productivity, increase data visibility to facilitate better business decision-making and offer broader insights into financial health and integrity.