Automation does not remove humans from the process, it empowers them. When machines are trained to do the mind-numbing, we as humans, can spend time on the activities which have the greatest impact on an organisation.
With that in mind, here's my top ten ways to automate your finance department.
1) Bank Integration Bank integrations provide the single biggest benefit in financial automation. Integrated bank statements are used to automatically generate cashbook journals based on the statement text. In turn, these transactions are automatically reconciled on the bank.
For payments, a bank integration removes the requirement to upload a BACS file to your bank, saving time and providing added security. As the system knows what it’s paying, it automatically posts the cashbook payments and reconciles those invoices on the supplier ledger.
2) Optical Character Recognition OCR technology is utilised on purchase invoices to reduce the level of manual data entry. Where purchase orders aren’t being used, smart systems employ machine learning to predict GL analysis based on past behavior.
Where appropriate, it goes one step further. By reading the company number on an invoice, a supplier is automatically setup with an out-of-the-box integration with Companies House.
3) Expenses Module Modern expense modules remove the requirement for finance departments to manually enter transactions into their finance system. Mobile friendly systems let managers approve expenses on the go and let end-users easily and efficiently submit expenses by taking a picture of the receipt.
4) Cloud-based Integrations With true cloud finance systems, everyone utilises the same server. Given this, only one integration is made between two systems to serve thousands of customers and users. For cost effective, reliable integrations, think cloud.
5) Re-occurring Invoices Re-occurring invoicing goes much further than sending out the same invoice each month. Even if you invoice the same customer but bill them a different amount, smart systems generate draft invoices, filling out 90% of the work, leaving you to change only what’s necessary.
6) Workflow Supplier and Purchase order workflow ensures the right information is automatically sent to the right people in your organisation for approval. Electronic approvals will ensure the organisation has oversight of the entire approval process and purchase order accruals can be automatically made at the point the goods are received by the organisation.
7) Automated Debt Chasing Whilst debt chasing may always involve an element of human intervention, automated reminder letters help sort the wheat from the chaff.
8) Automated Re-allocations Month end tasks often involve a level of routine reallocations. The same task completed each month is always a candidate for automation and monthly reallocations are no different.
9) Automated Prepayments and Accruals Modern finance systems have the capacity to automatically prepay and release invoices when posting a transaction. This ability is also used to accrue invoices received after month end but before the period close. This level of automation removes the requirement to manually prepay and accrue transactions each month.
10) Automated Upgrades With true cloud, everyone sits on the same server and everyone gets software updates immediately and seamlessly with no work required on the client side. With a highly configurable system and no custom code, you get a cutting-edge accounting system without having to cross your fingers each time there is an upgrade.
In Conclusion... I hope that you have found my Top 10 ways to automate your finance department useful. Remember, technological transformation is a journey, not a destination. As organisations change, technology adapts and the most successful will be those who continue to invest not just in technology itself, but in its employee’s ability to unharness potential.
If you have any questions, feel free to contact me at [email protected]
Peter Hucker is a Chartered Accountant, CA and member of the Institute of Chartered Accountants Scotland.
As a Consultant, specialising in finance systems, Peter helps his clients unlock the benefits of modern cloud technology by increasing efficiency and providing enhanced oversight to their organisation.