While there is a lot of discussion around hot topics like finance digitalisation, RPA and intelligent automation, it is easy to get lost within this technology-driven narrative. What can you do to get a clearer grasp on how to apply these tools to your finance processes?
This blog post provides practical guidance for drafting a long-term finance automation strategy and ensures that you ask the key questions when assessing various automation tools.
Finance automation uses software and technology to speed up tasks that you typically perform periodically and that take you a lot of time. It helps enterprises improve efficiency and save time by automating finance tasks such as invoicing, payroll and expense management.
For example, you may have an employee that does reconciliations for you. Traditionally, this would take several hours of manually matching transactions. However, if you automate reconciliation, it will only take minutes, allowing your team to focus on analysing discrepancies rather than hunting for them.
Do your processes still involve people manually collecting and preparing data to Excel sheets and uploading spreadsheets to your ERP system? Then, it is high time to replace these manual tasks with automated processes to speed up your team’s work. As a result, quality and control will increase significantly since processes can be monitored in real time and easily audited afterwards. This will also make period financial reporting easier and less time-consuming.
Another benefit of finance automation is the level of visibility you get. An intelligent automation tool with real-time dashboard reports ensures that users can track key processes, such as financial close progress, without manual effort. These reports give you an overview of completed and future tasks, which will help sync the finance team and eliminate the need for status updates and email correspondence.
Real-time dashboards also help you spot issues early. For example, if you notice an unexpected drop in cash flow or an unusual expense, you can immediately investigate and identify the issue before it affects your business.
When considering finance automation, think in terms of processes, not separate tasks. Tasks are managed by individuals, while processes involve teams and have a greater impact on your overall finance management. To start, identify the processes that are the core of your finance management output and have long-term impact.
A good idea is to focus on processes like:
Accounts payable and receivable,
Financial reporting and consolidation
Expense management
Payroll processing
Month-end or year-end closing.
Rather than automating low-value tasks, make a list of the processes that take up most of your time and resources (e.g., payroll or financial statement consolidation). These are the areas where you get the most advantage from efficiency.
Map out these key processes within your organisation and determine the core issues and missed opportunities. This holistic process overview will help you identify bottlenecks and lay a solid groundwork for your long-term finance digitalisation and automation strategy.
Let’s look at a step-by-step guide on how to automate finances:
Once you have identified priority processes and understand the issues behind them, consider the following question: How can control and automation help improve the overall process? Think of document creation, data validation, connectivity to your ERP systems, internal team communication, approval process, process tracking and reporting.
Instead of focusing on a general goal like ‘improving efficiency,’ define specific metrics that matter to your enterprise, such as reducing the time it takes to close the books by 25% or cutting invoicing errors by 50%. This will help keep your strategy focused.
A common risk associated with finance automation is losing control over automated tasks and having little to no ability to interfere and oversee the process. Not everything should be automated, which is why selecting the right processes to automate is crucial to a successful strategy.
Focus on automating repetitive, time-consuming processes such as transaction reconciliation, invoice processing, tax compliance and budget forecasting. These areas benefit from automation by reducing the risk of errors and providing you with a foundation for further growing your strategy.
Apart from factors like high accuracy and speed, an automation solution, which is truly purpose-built for finance and accounting, should provide custom capabilities instead of only rule-based functions.
No two organisational structures and finance management processes are the same. Add occasional ad-hoc tasks to the mix, and customisation and high-functionality features become very clear and crucial. Tools built with finance know-how for finance professionals will meet these criteria.
A solution that promises to do everything is usually not good enough for anything and typically involves a lot of coding, risk assessment, and testing before safe deployment. In short, this characterises many generic RPA solutions, which can be applied to almost any transactional processes. This makes them very accessible but also very limiting and restrictive.
Therefore, be specific about your needs, and make sure the tools you select are purpose-built to control and automate those core finance processes that you have prioritised for your finance management output.
A successful finance automation strategy should be about augmenting and synergising all your existing finance management tools for one highly efficient workflow. To truly measure the impact of automation, you need to track KPIs (Key Performance Indicators) such as processing speed, error reduction, compliance improvements, and cost savings.
The winning automation solution should be able to integrate multiple ERP systems or multiple instances of an ERP system in real time. This ensures instant remediation actions, online data validation and, ideally, a simplified system landscape.
By continuously monitoring these integrations and their performance, you can assess how well your automation efforts are driving efficiency and make data-driven improvements over time.
Add specific KPIs like 'average time to resolve discrepancies in invoice processing' or 'reduction in manual data entry hours' to help track the impact of automation on productivity and cost-efficiency.
Finance automation comes with its own set of challenges, especially when working with multiple ERP systems or different accounting concepts. The winning automation solution should be able to cope with these complex requirements.
One major challenge is dealing with accounting journal entries. A lot of time is wasted because the input data like accounts, cost centres and tax codes must be filled in and validated against ERP system rules manually. This process is also highly error-prone and often results in an invalid journal, which is then uploaded into the ERP system only to produce a validation error. As a result, even more time must be spent repeating the whole process again.
Instead of relying on manual data input, set up an automated system that reads the journal entries directly from your source data and applies the correct tax codes and cost centre allocations. This will save you hours of manual validation.
To overcome these challenges, best practices include implementing real-time integration with the ERP system to make everything efficient. By doing this, you’ll be able to automatically retrieve data for your journals from external systems and validate it against your ERP rules. As a result, the whole journal entry process will be much faster and error-free.
Security and compliance should be at the core of any automation strategy, particularly when integrating with an ERP system—the backbone of key transactions in any complex organisation. Financial data is highly sensitive, which is why automation tools have strong security features like access controls, encryption and audit trails. This keeps you protected from fraud, data breaches and unauthorised changes.
A well-designed finance automation system should also help with compliance by ensuring all transactions follow regulations and internal policies. Automated processes reduce human error, flag discrepancies, and generate real-time reports that make audits easier and more transparent.
Look for automation tools with built-in compliance checks that automatically adjust to changes in tax regulations or industry standards so you don’t have to worry about manually updating them yourself.
Claim ownership of your finance digitalisation and automation strategy and let your goals define your preferred set of tools, not the other way around. Finance digitalisation and automation capabilities are well ahead of generic task automation bots, and finance professionals no longer need to rely solely on IT support to kickstart the finance digitalisation revolution in the company.
At Aico, our mission is to enable finance professionals for more meaningful and insightful work through intelligent automation and control. We have developed an intelligent finance automation and control solution to optimise key record-to-report accounting processes.
We believe in purpose-built solutions developed with and for finance professionals, which automate complex, repetitive and time-consuming tasks and have proven to be efficient in finance departments and beyond. These solutions synergise all organisation’s finance management assets to deliver faster and more transparent processes.
Designed with ease in mind, Aico simplifies complex financial tasks such as account reconciliations, helping businesses move beyond manual processes and focus on growth. If you want to level up your enterprise, contact us for a tailored solution.
Instead of manually entering data or moving files around, finance automation does the work for you. It speeds up invoicing, payroll, budgeting and financial reporting, reducing errors and saving time.
You can automate finances by using software that fits your accounting systems, banks and other financial tools. You can start by setting up automatic bill payments, scheduling reports and syncing transactions between systems.
Instead of relying on Excel, you can automate your financial workflows using finance automation software. For example, you can auto-generate financial reports, manage accounts payable/receivable or handle payroll. These platforms integrate with your existing financial systems and pull data from various sources without manual input.
Yes, you can automate budgeting and track income and expenses in real time. Many tools connect to bank accounts and categorise transactions automatically, helping you stay on top of your budget without manual tracking. You can also set up alerts for overspending and create automated savings plans based on your financial goals.
If you have read so far, why not reach out and talk about your finance automation strategy?