Financial automation is no longer ‘good to have’ for companies. It is now necessary for business owners to replace manual, error-prone processes with more tech-savvy solutions. Financial automation refers to integrating and using an ERP system software to automate a business’s financial activities, such as bank reconciliation, bookkeeping, expense management, forecasting, etc. Much like the process of automation in any sector, automation in the financial industry allows business owners and managers to get things done more accurately and quicker than before.
That said, a company’s finance department has several manual processes that make your finance team’s job more difficult than it should be. These manual processes involve emails, creating spreadsheets, siloed software, or paper forms that contain tons of errors and usually tend to slow down business growth.
Managing the never-ending pile of documents will leave any finance team overworked. When you start to incorporate financial automation into your business early on, you can eliminate miscommunication, manual processes, and disjointed systems. Furthermore, it is also vital that you enforce a culture of automation to cope with rapid digitalization. That said, listed below are a few benefits of financial process automation for businesses.
Availability of more intelligent financial analysis
Financial automation provides organizations with a comprehensive image of their entire finance ecosystem. It will allow you to gain access to reports such as income statements, cash flow statements, performance reports, P&L statements, etc., with little to no human intervention. When using these reports, companies will be able to study their break-even point of sale, interest expenses, profitability index, EPS (earning per share).
They will also be able to make suitable changes to improve their financial position via better analysis. Of course, having additional qualifications such as an MBA with accounting concentration online degree will make the analytical and decision-making process a lot more straightforward. Individuals who want to make the most of their business’s financial and accounting information should consider upskilling.
It helps eliminate manual errors
No matter how experienced professional accountants and financial analysts are, they will still be prone to many basic human errors. It is necessary to realize that accounting mistakes can result in severe repercussions. Something as simple as a typo can cost an organization significant amounts of cash.
Automating accounting practices eliminates such apparent risks. Finance experts can do well without manual account balancing and data entry. Accounting automation can do everything for them with just a few clicks, be it reconciliation, filing tax returns, or scanning invoices.
It helps reduce the risk of fraud
Any fraud or information leak when handling financial information can be detrimental for an organization. The traditional method of storing financial information inside datasheets is prone to theft or fraud since anyone can get their dirty hands on them. And let’s face facts- you don’t have to be a rocket scientist to hack a Microsoft Excel spreadsheet.
A secure financial process automation tool comes with an efficient workflow system that allows you to control how various stakeholders access your business’s financial data. When you deploy such cutting-edge technology, you’ll quickly detect and prevent frauds and theft in the process. You’ll receive alerts whenever there is any malpractice or unauthorized access to your company’s financial information.
It improves workflow efficiency
Why indulge in extensive manual data entry when you can have a computer do everything for you? When you plug in data into an automated system, you only have to do it once. The same is the case for any data updates, as an automation tool swiftly propagates information across the entire system. Such a thing makes it a lot easier to manage expenses, employee payrolls, and other financial processes that depend on inter-departmental working.
When your employees no longer have to worry about spending a lot of time on manual data entry, they’ll be free to utilize their skills more effectively. This will improve your organization’s creative and analytical aspects. Plus, it will be a lot easier and quicker for them to access any financial information they desire.
It improves collaborative working
By improving integration between various organizational departments and overall efficiency, financial automation software allows multiple teams to collaborate efficiently. It simplifies collaborative work and allows the finance department to manage money within a group instead of creating an overall budget in hopes that a project manager will look after it. It also enables teams to control expenses better and anticipate any additional funding whenever required. Furthermore, the highly transparent nature of financial automation software eliminates any disagreements between team members and departments, improving the organization’s work environment.
Suppose you are a finance professional or business owner who wants to maximize your organization’s or financial team’s efficiency. In that case, it is a no-brainer to invest in financial automation as soon as possible. Future forward organizations and finance teams are no longer responsible for performing basic accounting tasks. However, in the end, they decide the end-to-end financial operations of a business which will determine whether a business grows or not.