As agility and resilience replace traditional metrics to take centre stage in markets across every sector, embracing digitalisation has become a prerequisite of competitiveness in 2024.
While the finance department was once the engine room for recording the organisation’s incomings and outgoings, it has evolved to become an intelligence hub, leveraging insights from which to underpin decisions, shape strategy and boost performance.
Finance professionals are now expected to focus less on transactional activities and more on analytics, and in line with this shift, possess a whole new range of skillsets to deliver the kind of intelligent counsel demanded of them.
And crucially, this ability to draw upon insights and drive the best outcomes is only achievable with a digitalised infrastructure which has automation at the core.
Automation is crucial not only in streamlining operations and reducing manual errors for greater productivity, but in establishing the foundations from which to deliver superior levels of intelligence.
It’s important to recognise that there are two types of automation when we talk about financial management. The first relates to the traditional automation of business processes such as accounting and procurement.
A good example of where this kind of automation can deliver value is in Accounts Payable (AP). AP remains an area which commands the greatest proportion of manual, and often painful, processes. Take invoices for example. Invoices land in many forms, from physical documents, e-mails or links via portals. Once received they must be approved, checked, filed and paid. This involves reconciling every invoice against its purchase order and order details to ensure that it contains the relevant information, and is for the correct amount. Getting this right is crucial, as even one missed, or incorrect invoice, can cause mismanaged VAT, overpayments and impede cashflow.
Automation in this area can ensure much greater control and reduce errors, while faster processing of invoices and quicker payments can foster better supplier relationships. A reduction in paper-based processes reduces the need for physical storage and expedites audits, while the ability to undertake AP processes from any location removes potential delays or bottlenecks and streamlines approvals.
It goes without saying that more collaborative working supports greater productivity, and the manual labour saved can be deployed in other areas, adding value to the wider goals of the department. And of course, reporting can be taken to another level. The real-time insights generated boost visibility, contextualise information and ultimately facilitate better decisions. Monthly expenditure can be monitored more tightly, cashflow can be monitored more closely, and annual trends can be mapped and acted upon appropriately.
The second kind of automation is focused on the way in which modern technologies such as Robotic Process Automation (RPA) RPA and Artificial Intelligence. (AI) can expedite and supercharge automation for even more in-depth insights.
These technologies, while still some way of for the majority, are making their mark and according to Gartner, around 80% of finance leaders have implemented or are planning to implement RPA. This is because, as part of an intelligent automation strategy, robotic process automation (RPA) has the potential to replace a great deal of manual, rules-based, repetitive processes, bringing greater accuracy, faster, and freeing up time for teams to innovate and add value, and apply much needed skills to those areas where gaps exist.
In fact, a survey of finance and accounting leaders, in conjunction with the Institute of Management Accountants (IMA), revealed that in order to elevate its role as a more strategic business partner, finance will need to balance human and machine-based competencies while achieving relevance and resilience.
Crucially, both types share a common goal: to automate time-consuming manual processes, minimise errors and inaccuracies, expedite decision-making and boost both productivity and performance.
Given the scope of what is now available, and in a world of continuous change and digital developments, it is sometimes tricky to know where to invest and which areas to focus on first.
Starting small or with those areas which stand to deliver the greatest or fastest ROI, such as AP, can be a good place to start in building the momentum and confidence necessary to embrace automation at a wider level.
There is no doubt that the future of finance is digital, with automation representing the foundation from which to embrace new technologies such as RPA and AI. While digital will not replace people, people, supported by the right digital platforms, will undoubtedly replace those who remain reliant on manual systems and processes. Those who recognise this and embrace an automation-centric culture, will undoubtedly be the winners in a new world economy.
Posted On: November 22, 2023
