When it comes to automation in accounting or finance, I’m sure you’ve heard some rumblings and discussions about what the future holds. If you’re looking for a complete breakdown of what Finance Automation is all about and how you can use it to gain an advantage, then you’ll love this guide. It’s a rundown on the concept as a whole, the tools you should know, and the benefits Finance Automation is bringing many organizations from coast to coast. Let’s get to it.
What is finance automation?
Finance automation is the act of automating certain finance jobs and tasks that could be done more efficiently and cost effectively by robots and artificial intelligence tools.
Research conducted by McKinsey & Company suggests that up to 45% of the activities individuals are paid to perform can be automated by adapting currently demonstrated technologies.According to a report from Transparency Market Research, the total robotic process automation (RPA) market is expected to see a compounded growth rate of over 60% annually through 2020. That aligns with a Forrester report projecting the industry to grow from $250 million in 2016, to $2.9 billion by 2021.
To put it simply: finance automation is no longer a distant possibility—it’s reality.And it’s a reality that 65 percent of finance leaders are calling a significant priority, according to an EY study. These leaders are automating as many processes as possible, while ensuring they’re still agile and high quality. Automation is the future, and the most successful organizations are embracing automation to better equip their human talent.
Now before you jump into the world of finance automation, you need to understand what tools are available to you and which ones you’ll need to be successful. Just as you wouldn’t try to build a house without knowing the difference between a circular saw and a miter saw, you shouldn’t dive head-first into finance automation without an understanding of all the tools.
Here’s a list of must-have tools for finance automation:
1. Automated Payroll Solutions
One of the most commonly automated accounting tasks is payroll management, and the most popular tool to make it happen is Wagepoint. With Wagepoint, you can add all employees to the system along with their banking information and wages, set how often payroll is processed, and never wake up Saturday morning worried that you forgot to pay the team again.
2. Automated Purchase Order Solutions
Another tool making the lives of financial controllers 10 times easier is our very own Teampay. Teampay can save financial controllers and their teams hours each month by making procurement processes, payment reconciliation and spend management automated and easy. No more fumbling over Excel spreadsheets for expenses and purchase orders. Teampay issues virtual credit cards that sync directly with accounting services, so that financial controllers know who spent how much and what they purchased.
3. Automated Finance Analysis Solutions
APIs (that’s application programming interfaces) like Klipfolio make it easy for organizations to see important info from all their connected apps—from QuickBooks and Salesforce to Google Analytics and HubSpot—all in one place. This dashboard tracks KPIs using existing data to showcase things like departmental performance, account status, expenses, cash, burn, MRR, conversion rates and human resource topics.
Another great service for visualizing exactly how well your business is performing in terms of profitability, growth and cash flow is Fathom. It’s similar to Klipfolio but offers a more robust financial analysis solution.
4. Automated Corporate Tax Solutions
One automated accounting solution that has the potential to save financial controllers hours and hours is Datamolino. Using Datamolino, finance controllers can upload their bills, invoices and receipts (scanned paper documents, PDFs or photos), and the tool will extract all the information from the files and put it into a searchable, scannable format. When tax season rolls around, having all your documents uploaded and organized is sure to save your accounting team hours.
5. Automated Invoicing Solutions
Another great automation tool is InvoiceSherpa, which automates the accounts receivable process to ensure that invoices are paid quickly and on time. InvoiceSherpa automatically follows up with clients whose invoices are past due and offers clients the ability to pay online. It syncs directly with full-service accounting software to ensure there’s no loss of data — always a danger if you are manually inputting payment information.
Why are industry leaders investing in finance automation?
Here are some of the key reasons that the best organizations are buying into finance automation for their daily routines:
Less time spent on tedious tasks
You’ve heard the stereotypes: Accountants are boring number-crunchers who spend their days pressing calculator buttons and entering data ad nauseum.The organizations getting it right know that this stereotype is far from the truth. They know their finance talent is capable of much more than manual data entry, and they’re empowering their finance teams to think strategically and turn raw data into actionable insights. Finance automation solutions like Teampay are making it easier than ever for companies to fully take advantage of their team’s skills by taking tedious tasks off their plates.
In a recent piece in the Wall Street Journal, former CFO of Walmart Charles Holley explained a few key things that CEOs want from their finance leaders, including understanding and challenging the business strategy, building strong relationships with business leaders, offering solutions, and making sure the financial reporting, controllership and accounting are under control. Finance automation enables finance leaders to focus on these things instead of spending all their time crunching numbers.
Increased productivity across the entire team
When the tedious tasks that need to get done on a daily basis are automated and out of the way, your entire finance team will see an uptick in productivity. Even if the team is small, taking the bookkeeping and credit card reconciliation tasks off their plate will free up their time and energy. With modern computing technology and finance software, receipts can be scanned and filed quickly with a tool like Datamolino, and purchase orders can be approved with the click of a button and virtual credit cards can be distributed to ensure accountability with Teampay.
More accurate reporting possibilities
As incredible as your accounting team may be, they are still only human. Since they’re only human, they’re prone to basic human error. Something as simple as a typo or rounding error could seriously skew the results of a report. The goal of reducing human error has been a strong catalyst for the rise of automation software in the finance world. Even accountants and comptrollers with the strongest attention to detail can make minor mistakes if they’re tired or distracted. But finance automation tools don’t get tired or distracted, and so are much less likely to make these same types of errors.
Extract insights from data more efficiently
With tools like Klipfolio and Fathom that connect to all your applications and display information in one place, your finance team will be able to spend less time gathering data and more time actually analyzing it in order to unlock actionable insights capable of moving the needle for the business. Even if the software tools you’re using can produce highly detailed reports, an accounting professional has the expertise to convert those reports into potentially game-changing action plans.
What does the future of finance automation hold?
Many people assume that finance automation equals massive layoffs and lifeless offices with nothing but robots rolling around. Rather than jumping straight to the Hollywood depiction of an automated finance department, think of it like this: Finance automation can save your team countless hours of wasted energy.
If you have an employee on your accounting team who’s spending most of their time on data entry, manual payroll management, and any number of other tedious tasks that require minimal thought, think of all they could be doing instead—all the time they could be spending on activities that are more likely to move the needle. If you automate those tedious tasks, your employee will have tons of time to focus on extracting actionable insights from financial data and do more strategic thinking. The less time your team has to spend on tasks that can be automated, the more time they have to spend on tasks that can help the business grow.