It’s no secret that there’s an efficient Finance department at the heart of every successful business.
With the pandemic, a lot has changed. Businesses went remote, and processes came to a halt. But in all of this, the Finance teams still managed to keep businesses afloat. But, sadly, this resulted in added workload and responsibilities for the Finance teams.
Thus, business leaders must enable their Finance teams to achieve the same productivity levels as they did at the office. But where do they start, you ask?
We’ve crafted this quick read on the various ways businesses can help their Finance teams and processes to run efficiently, remote or not. So let’s get to it!
What are financial process improvements?
Improvements made to the standard financial tasks and workflows are called financial process improvements. Process improvements benefit all the departments of your organization when done correctly.
Some of the most commonly used process improvement methods are:
- Leveraging technology to automate tedious and repetitive processes.
- Improving accuracy by eliminating manual errors.
- Realigning financial goals to match with business goals.
- Optimizing workflows to make them a smooth and seamless process.
What standard financial processes can benefit from automation:
1. Accounts Payable and Receivable
- Finance teams can take care of invoice management (creation to payment of invoices) from a single platform.
- Finance teams can customize reminders for recurring payments instead of sending individual email reminders.
- Centralized cloud storage for receipts helps in quick and easy retrieval during audits by Finance and Accounting teams.
2. Expense Management
- An expense management software lets employees collaborate with Finance teams easily, even during remote work. It ultimately reduces the redundant back and forths for clarifications either physically or even through emails.
- The robust policy engine of an expense software is capable of understanding and enforcing complex business rules. It also checks every reported expense against company policies right at the source of its creation; thus, ensuring only compliant expenses get through.
- Such close monitoring ensures that all illegitimate expenses are picked out and helps prevent expense fraud in the company.
3. Payroll Processing
- With payroll automation, Finance teams can automate the calculation and processing of salaries, hourly wages, benefits, deductions, commissions, and bonuses every month.
- The addition of a new employee to the payroll can also happen instantly, with approvers getting notified immediately. This makes the entire workflow an easy one-click process.
How Does Automation Improve the Efficiency of Finance Teams?
“Automation saves up to 30% of the time in the day of an average Finance employee.” Gartner Report September 2019.
Businesses need to understand automation isn’t here to replace their employees but to enable them to achieve their highest potentials. Listed below are some of the most important benefits of Financial automation:
Helps make financially backed business decisions
By having an entire breakdown of the organizational-wide financial situation, businesses can use the information from various reports like income statements, expense reports, and cash flow statements to analyze profitability indexes.
This helps measure crucial parameters to determine risks that could threaten the company’s financial stability in the near future. Additionally, businesses can make data-backed decisions to identify and mitigate external challenges with the correct numbers in hand. This ensures companies are always in the know-of-things, no matter the situation.
Eliminates manual data-entry errors and automates policy checks
Accounting errors, if ignored, often lead to severe repercussions in the long run. For example, a simple interchanged value (like $35 becomes $53) can cost businesses enormous amounts of money if done by multiple employees over multiple expense submissions over extended periods. This could wreck your business finances if not course-corrected.
This is where automation comes into play. Automation-driven software like an expense software eliminates data entry errors by instantly extracting expense data from receipts using OCR (Optical Character Recognition) technology. They then also auto-fill reports ensuring no manual errors get by.
The software also runs real-time pre-submissions checks to guarantee no fraudulent, duplicate or out-of-policy expenses slip. This not only plugs financial leaks but also ensures you never run into trouble with the IRS during audits.
Eliminates expense fraud by boosting policy compliance
“The pandemic has shown a 57% increase in expense fraud across the world.” Oversight Report, 2020.
A spreadsheet-based expense reporting mechanism leaves your company’s financials prone to information leaks, errors, and fraud as anyone can gain access to it. A three-year-old with a laptop and WiFi connection could modify a spreadsheet, so think about just how protected your most important data is.
With an expense report software, a robust policy engine enables the creation of customized workflows to ensure that no fraudulent expense gets through. All duplicate and fraudulent expenses are identified, flagged while also informing every stakeholder of the seriousness of the violation. This ensures that expense policies are enforced seamlessly with little to no effort.
Save additional time and money every week
Gartner revealed that automation saved over 25,000 hours and $878,000 annually for organizations that picked them.
In addition to saving time, automation-driven technology also simplifies tedious processes that initially took Finance teams multiple back and forths to complete. It also takes over data entry, verifications, and payment processing, freeing up endless hours to dedicate to other high-impact tasks.
It also significantly brings down reimbursement times with faster financial processes, enhancing employee experience and increasing morale and productivity.
Though not automation related, considering most finance departments are now dealing more with remote workers it’s likely a good idea to also consider investing in webinar software for the team to better work together and collaborate.
Having to stay constantly on top of money means that Finance teams need to be aware of all upcoming laws and regulations, have more profound insights into company-wide finances, and continuously track business expenses.
While there are plenty of softwares that can improve processes through automation, ensure you test run plenty of them before picking the right one that suitably caters to your business needs. Aptly reorganizing your Finance department for efficiency can help your business thrive in the upcoming series of ‘new normals.’
The author Dennis P. Reed possesses a vast experience in the IT industry, especially in the domains of website and mobile app development and digital marketing. He writes on topics encompassing the above mentioned domains and is considered a maven in his chosen field – Information Technology.