Exploring the Role of Automation in Finance and Accounting

June 2, 2023

In the dynamic world of finance and accounting, automation has emerged as the catalyst for efficiency and accuracy. From streamlining invoice processing to optimizing reconciliations, automation tools are revolutionizing traditional workflows and transforming how tasks are executed. In this blog, we delve into the transformative role of automation in various facets of finance and accounting, highlighting the benefits it brings to organisations.

Invoice Automation

Automation simplifies the invoice processing workflow by extracting crucial information from invoices, ensuring accuracy, and reducing errors and delays. It can match invoices with purchase orders, generate expense reports, and route invoices for approval, improving cost savings, cycle time, and compliance.

Avinor, a Norwegian airport operator, recognized the need for automation due to their large volume of invoices. Through the automation of invoice review, booking, and approval, Avinor experienced a remarkable 90% improvement in process speed, handling 100,000 invoices annually.

Accounts Payable and Receivable Automation

Automation tools streamline accounts payable and receivable processes, improving efficiency, reducing compliance issues, and enhancing customer satisfaction. By automating payment processing, invoice creation, and tracking, these tools ensure quick and reliable processing.

MRI Software, a leading provider of real estate management products, automated accounts receivable software to streamline their collection processes. By automating tasks like email communication, collection letters, and invoice processing, they were able to save 400 man-hours per month.

Reconciliation Automation

Accurate and transparent accounting is vital, but it can be challenging due to diverse data formats like bank statements, international transactions, and customer payments. Manual balance sheet reconciliation alone consumes 30% of a finance team's workload. However, intelligent automation offers a solution by automating data extraction, consolidation, and cross-checking. Automation tools can extract and consolidate transaction data, search for relevant statements in ERP systems, compare balances, and flag discrepancies. Implementing automated reconciliation enhances accuracy and compliance and streamlines financial reporting across subsidiaries.

A practical example of automated reconciliation is seen with VSA, a Scottish social care charity. By utilizing a financial management system with integrated reconciliation functionality, VSA reduced the monthly reconciliation time for their 15 bank accounts from two days to just 30 minutes.

Financial Planning and Analysis (FP&A) Automation

58% of midsize and large companies still use spreadsheets to manage their planning and budgeting processes, and yet 41% of Excel users say spreadsheets cannot handle their data volumes. According to a Deloitte report, FP&A leaders and CFOs feel a big need for the integration of external data with company data to generate actionable insights. However, this integration faces challenges due to varying system configurations. Too often, Spreadsheets hinder collaboration and generate flawed models due to poor standardization, data integrity, and collaboration methods. This creates data and planning silos, causing delays in critical information and leading to poor decision-making.

Organizations can overcome these hurdles by utilising no-code solutions, automation, and predictive analytics. These tools enable seamless data integration from ERPs, CRMs, and HRMs, facilitating comprehensive planning, budgeting, and forecasting. Departments like operations, sales, finance, and human resources can benefit from agile planning and analysis, leveraging a common set of tools to drive insights and enhance performance management.

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