Following in pandemic, companies have further invested in technologies to radically simplify processes and free up people, which has not only made them seamless but decreased costs of management, with a 96% reduction in paperwork, 50% increase in employee productivity, among others.
This trend toward automated workflows is causing some of the most significant changes in companies’ finance teams. New opportunities can be unlocked in finance operations by moving away from paper-based manual processes – such as email, fax, and spreadsheets — and toward automated processes.
Reduction in Repetitive Manual Tasks
Automated workflows can drastically reduce, or even eliminate, many of the repetitive manual tasks finance teams traditionally had to deal with. Using auto-populated templates for tasks such as for travel-and-expense reimbursements or journal entries, reducing the need for manually keying in numbers and other information.
When your finance department is freed from the tedious and repetitive tasks, they’ll be able to focus on higher-level goals for the company’s financial picture. Automation will also have a positive impact on employee satisfaction and lower rates of turnover.
Better communication and collaboration, both within the finance team and company-wide, helps for a more streamlined process. Using a central platform for communication, can lead to a lower chance of miscommunications.
One of the main types of workflows boosted by automation is the request-and-approval workflow. Finance operations rely on requests and approvals for numerous functions, ranging from capital expenditures (CapEx) to new contracts to expense reimbursements. Many of these approval workflows are multi-level and complex, with certain types of requests – such as a CapEx request above a specific dollar amount – needing to be elevated to higher-level approvers. When manual processes are in place, these multi-level workflows can be easily slowed down with backlogs and bottlenecks.
With automation in place, an approval workflow can actually “flow” once more. Requests for approval can be made on the central platform, which eliminates requests that are duplicates or inconsistent. For multi-level approval processes, the request can be automatically routed according to the company’s internal controls. The designated approvers can receive reminder notifications and request more information or documentation, which can be provided through the same platform. And an approval can be submitted with the click of a button, rather than a physical signature on an easily-misplaced paper form.
A drastic increase in transparency is yet another happy side effect of implementing automation in finance operations. Now the status of any particular workflow can be reviewed immediately. If you need to know the reason for a delay in a new vendor approval, for example, you could have to dig through numerous emails and paper forms in a traditional manual system. But with an automated system, a dashboard on a screen can immediately convey the current status.
Automation also increases transparency through the easy creation of audit trails. Along with providing the status of any current workflow, an automated platform also provides other essential information, such as dates, times, and individuals for any specific actions taken. Using the example again of the delayed new vendor approval, a finance team leader can also easily see where mistakes have been made and bottlenecks are being created, enabling them to take corrective actions.
Since a finance team plays a central role in maximizing the company’s bottom line, they also face increased exposure to risk. These risks include the potential for financial mistakes, lost money and regulatory fines. Automation of finance operations directly addresses all of these risks.
One of the greatest flaws in manual processes is the potential for human error. Paper forms and documents can be easily lost or destroyed. Emails and faxes can be misdirected. And one simple error in a spreadsheet can carry over to various aspects of finance operations before it is detected.
Automation decreases the risk of human error in numerous ways. An automated platform can perform calculations and correct errors. Much of the information can be auto-populated, avoiding the potential for mistakes in data entry. And the system can help enforce internal controls by prompting for all information or documentation needed, as well as ensuring workflows are followed. CapEx requests above a certain dollar threshold, for example, can be automatically routed to higher-level approvers.
Another risk for a finance team is the potential for regulatory audits. These are burdensome and consume a great deal of resources – and at the end of it all, there could be a possible regulatory fine. Fortunately, an automated system can make audit compliance much easier through its automatic creation of audit trails for all workflows. The audit process will proceed more smoothly, with a far better chance of passing the audit successfully.
Well worth noting here is a risk that will not tend to increase with automation – the risk of a security breach. In fact, automated platforms tend to be cloud-based and even more secure than on-premises servers. Basic security features such as data encryption are commonplace with automated systems, which helps to alleviate the security headaches of a finance department.
Remote Work on the Rise
There has been an ongoing trend toward remote work, and automation aligns well with this shift. An automated platform can be accessed remotely through a wide variety of devices, including laptops and mobile phones. Even before the COVID pandemic, it was common for higher-level staff or leaders to be traveling or unavailable for extended periods. Automated workflows allow for these individuals to still perform their tasks, even when away from the office. And now that the pandemic has accelerated the trend toward workplaces that are either remote or hybrid, automation has an even more central role to play for finance teams.
Discover How Automation Can Transform Your Finance Department
If any of these changes would be welcome for your finance department, it makes sense to look into implementing automated workflows. When researching automation solutions, keep these factors at top of mind.