With the current trends in the business world, financial operations are gradually assuming a more complicated nature. The high number of transactions, legal compliance, and the fast pace at which financial statements have to be prepared have been the driving force to the adoption of efficient solutions. Finance automation is one such game changing solution that can greatly enhance the efficiency of financial processes. In fact, it is found that the companies, which adopt the automated finance function, can cut down the operational cost up to 40% and the human error up to 50%.
But what is finance automation and how could it change the way you manage your financial processes? In this article, you will learn all that you need to know about financial process automation, including its advantages, how it operates, the tools you can use, and the steps you should follow to make the most of the technology.
What is Finance Automation?
Finance automation is the act of using technology to complete financial tasks that would otherwise be done manually. Such processes can be as basic as invoicing or as complex as financial reporting and reconciliation processes.
Some of the finance workflow automation involves technology that can do, monitor and document financial transactions with minimal human interference. These systems are linked with other business processes, which means that all the changes in the financial data are immediate and consistent.
Examples:
- Invoice Management: Processing of invoices, both in sending and receiving, and reconciliation of the same.
- Accounts Payable and Receivable: Automating payments, receipts, and ensuring timely processing.
- Tax Compliance: Ensuring accurate tax calculations and timely submissions to regulatory bodies.
- Financial Reporting: Creating actual financial reports in real time without the need for manual data entry.
When it comes to the automation of finance processes, companies can get better, faster, and more compliant financial management with significantly less intervention from human hands.
How Does It Work?
The way finance automation works depends on the tools and platforms you use, but the general process typically involves the following steps:
- Data Collection: Data is obtained from invoices, bank statements, payroll systems, and other financial software that is in use in an organization.
- Data Processing: The software processes the data by categorizing and matching transactions, generating financial reports, and identifying discrepancies or errors.
- Approval Workflow: Essentially, all the payment, receipt and other financial activities go through the right approvals without the need for human interferences.
- Reconciliation and Reporting: The system automatically reconciles your books and generates real-time financial reports, ensuring accuracy and compliance.
- Integration with Other Systems: Some examples of finance automation solutions include ERP (Enterprise Resource Planning) systems, as well as CRM (Customer Relationship Management) and HR software, all of which are connected in a chain of data delivery.
Top Benefits of Finance Automation for Businesses
The adoption of finance automation offers several advantages that can greatly improve your business’s efficiency, accuracy, and scalability. Below are the key benefits:
1. Efficiency & Time Savings
Strategic tasks such as scanning of invoices, payroll processing, and managing of expenses if mechanized relieves the financial teams to do more valuable functions. What took days to accomplish can now be done in minutes.
2. Less Errors & More Accuracy
Manual operations are always prone to errors. Automating the finance process minimizes errors because the process is done mechanically and there is no need for manual input.
3. Cost Savings
Companies decrease the requirement of a big finance department, and thus, decrease overhead costs. Lastly, since fewer errors occur, there are fewer costs related to revising an incorrect numbers report or receiving compliance penalties.
4. Scalability
With growth of your business, comes an increased number of financial transactions in the business. Automation tools are intended to grow with your business, so you don’t have to hire more people in proportion to the number of transactions you process.
5. Enhanced Compliance & Reporting
Automated systems ensure that all financial activities comply with the latest regulations and tax laws. They also make it easier to generate accurate and timely reports for both internal analysis and external audits.
6. Improved Cash Flow Management
Technological advancements and the ability to automate finance increase the efficiency of cash flow visibility and timely payments to and from the business side to meet the necessary cash flow cycle.
Common Tools and Solutions
Several software tools can help businesses automate their finance functions. Here are some of the most widely used platforms:
1. Tipalti
Tipalti is an AP automation solution that covers all aspects of the AP process. Ideally, it is widely used by international companies because it can process payments in multiple currencies, tax issues, as well as scams.
2. QuickBooks Online
QuickBooks is one of the most popular accounting software programs in the world. It has capabilities in invoicing, payroll, expenses and even generates management reports and is compatible with other business apps.
3. Xero
Xero is another accounting software that companies across the small to medium end use for managing their financial transactions. It has the ability to integrate with banks and accounting software, invoicing and bank reconciliation.
4. Oracle NetSuite
Oracle NetSuite is an integrated cloud solution for mid-sized to larger organizations. It encompasses all the aspects of an organization, from finance, supply chain management to customer relationship management.
5. Expensify
Expensify is an automatic solution in companies’ financial management procedures such as expense submissions and approvals. It is particularly helpful in keeping track of receipts, preparing and submitting expense reports, as well as.Employee Reimbursements.
6. Stripe Billing
Stripe Billing is an automated invoicing, subscription, and revenue recognition tool for businesses that accept online payments through Stripe’s payment processing platform.
For businesses seeking expert assistance in implementing finance automation, Chiron offers cutting-edge solutions to streamline and optimize financial workflows. Their expertise in fintech automation makes them a valuable partner in transforming your finance operations.
Conclusion
In the current business environment, manual finance processing is not a luxury but a necessity. The application of automation in finance brings efficiency, accuracy, compliance and cuts costs in the business. The right tools can help you manage your finances, grow your business and scale efficiently.