Many financial managers feel that they lack the right conditions to be able to contribute with the strategic support that’s expected of them. They might be doing everything to catch up, and still feel that they don’t know how to make work more efficient for themselves and their finance department.
As the business grows, it becomes a big challenge to maintain the same fast and accurate handling in this department. This is where automation comes into play as the proper solution to your problems.
Digitization and automation are words that have become mantras in many organizations today. For the finance department, this means completely new opportunities to be able to both save time and reduce the risks of manual work with increased automation.
With this in mind, below we share the best six ways to automate your business’s finance department.
Major Benefits Of Automation
- Time-saving. Manual tasks like variance analysis and account reconciliation can become hugely time-consuming and frustrating. These tasks can be automated with sophisticated accounting tools.
- Reducing error probability. No matter the quality of your finance team, they are still human beings and as we all know, humans are prone to making mistakes. According to certain estimates, close to 90% of spreadsheets contain errors or missing information. Automation reduces the possibility of error.
- To ensure greater consistency. Many members of the finance team have their methods. Even common processes like double-entry bookkeeping may have different approaches. Automation creates more consistency within teams. This significantly reduces the chances of errors and information gaps.
- Make your data more useful. Automatic, real-time data collection improves the utility of business information, allowing users to quickly identify and resolve problems, which decreases the risk of losing data.
- Reducing fraud risk. You must have trust in your team. Otherwise, there’s no point in hiring them. Despite your trust in them, fraud can be too tempting for some people. Standard finance tasks can be automated to make things more secure.
One of the top pieces of advice for anyone running a business, especially for small businesses, is to keep receipts for all business expenses. If you don’t have documentation to back up your tax filings, you could end up paying too much, getting penalized, or even being audited.
In order to better manage your finances, you should consider implementing the best accounts payable automation software. This tool can streamline your accounting process, reduce human error, and help keep all your expenses in order. Not only will it automatically store your digital receipts, but it also sorts and categorizes them for you. This way, all your necessary documentation is organized and readily available for tax filings. By integrating such software into your business operations, you’re ensuring greater efficiency and financial accuracy, saving you from potential penalties or audits in the future.
As technology is readily available, you should use a receipt management app to track your business expenses. This type of software has leading receipt and expense automation solutions, empowering businesses to reduce manual data entry, streamline receipt processing, and keep accurate, up-to-date expense records.
Integrated bank statements, which are based on statement text, automatically generate cashbook journal entries. This is undoubtedly the greatest benefit of financial automation. These transactions are then automatically reconciled to the bank.
Bank integration eliminates the need to upload an ACH file directly to your bank for payments. This saves valuable time and boosts security. The system automatically reconciles the invoices and posts cashbook payments, knowing what it is paying.
Optical Character Recognition
Optical character recognition (OCR) technology helps automate the extraction of financial data from documents. This is also known as financial spreading.
OCR can recognize and extract text, fields, characters, or data from scanned documents and images. As such, these documents mostly present structured data across standard formats, and automated OCR finance can significantly reduce processing times for each document.
Everyone utilizes the same server when using a true cloud finance system. To serve thousands of users and customers, you only need one integration. If you are looking for reliable and cost-effective integration, you should then consider cloud integrations.
A modern expense module eliminates the need for a finance department to manually enter every transaction into the system. Mobile-friendly systems allow managers to approve expenses while on the move and allow end-users to submit expenses quickly and efficiently by simply taking a photo of the receipt.
Automated recurring invoices aren’t limited to sending the same invoice every month. Smart systems can generate draft invoices that fill out almost all of the work, even if you invoice the same customer, but bill them at a different amount. You can only make changes when necessary.
Automated Prepayments And Accruals
When posting a transaction, current finance systems can automatically prepay and release the invoices. They can also automatically accrue invoices that are received after the end of the month, but before the period close. This automation eliminates the need for your finance department to manually prepay or accrue monthly transactions.
Digital transformation is a journey and technology adapts to organizations as they change. Employers who invest in technology to help them achieve their business goals are the most successful. This is why automating your finance department will help you unlock the potential of your employees and your business.