Why Automation is Finance’s Greatest Asset
Technology continues to advance faster than anyone imagined, yet the finance function often finds itself spinning in place. Even with the unprecedented developments in FinTech over the past few years, the adoption of finance digital transformation technologies lags behind many other sectors. Though the reasons are many, a large part of the apprehension comes down to a common misconception: Automation will eliminate jobs.
In all reality, automation technology does not replace finance professionals with machines. It saves time and makes their job more efficient, productive, and valuable by relieving them of the most repetitive tasks. Almost everything associated with “Accounts Payable” can benefit from AP automation. Process automation streamlines operations from invoice management and payment reconciliation to billing and tax compliance. There are no two ways about it.
Take something like month-end close. The amount of data handled manually is second to none. This alone can be an inefficient use of time, especially with the automation tools now available—and that’s not even accounting for the potential of human error, which is relatively high. The slightest accounting mistake can have significant consequences for your business, not only costing you money but potentially damaging your reputation in the process.
Understanding the Benefits of Automation Technology
While greater efficiency and accuracy should be reason enough to incorporate workflow automation into your financial processes, the technology holds the potential to improve many other aspects of the finance function as well. For example, if you were to enable payment automation, you’d offer vendors and suppliers visibility and control over invoicing and payments. This can help strengthen supplier relations and keep friction-filled communication regarding payments to a minimum.
Obviously, that same payment automation functionality can also minimize the potential for late payments, which means more money in your pocket. The added fees are now a distant memory. More importantly, however, the technology allows your company to take advantage of the early payment discounts and offer them to your vendors and suppliers, saving you additional funds while improving the cash flow for those you do business with.
Depending on your choice of automation technology, the system can be programmed to find anomalies and unusual activities. And though this should go without saying, it makes detecting and identifying fraud much easier. It also reduces the number of legitimate transactions flagged as fraudulent. Fewer false positives can improve vendor satisfaction.
Beyond that, automation tools simply improve the productivity of finance teams. One survey found that 44% of employees said automation saves time. Another 43% believe automation enables them to close tasks faster. With all the benefits of automation technology, businesses often see a 15% annual increase in revenue. The investment is minimal when compared to the gains experienced overall.
Paving the Way to Strategic Finance Through Process Automation
While automation technology impacts each company in different ways, there’s one advantage that’s shared by all. Automation can reposition the finance function for your operations, moving it from simply operational to strategic. For one, the time saved through process automation allows finance teams to focus on additional value-added activities. The technology also enables finance teams to turn real-time data into valuable insights that can improve not just the finance function but all departments companywide.
In fact, process automation offers finance leaders the opportunity to take on a more strategic role in the company. They are no longer spectators in discussions involving the long-term vision and growth of the company. They’re seated at the table, brought in to offer insights and advice on how the capital structure can best support business objectives. They’re now taking on additional responsibilities, driving the decision-making process, and executing strategies that reach beyond the finance function. You’ll even find them involved with strategic decisions around HR and IT.
Today’s business environment has made finance even more critical to a company’s success. Finance leaders and their teams are now tasked with transforming financial management into a function that does more than merely handle a company’s finance. It prioritizes business objectives and arrives at strategies that can overcome challenges and maximize market value—both in the short-term and the long term. Automation technology paves the way for such efforts.