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As a driver of cost efficiency across the enterprise, the finance department must demonstrate competent handling of the company’s financial resources. This push often starts with demonstrating optimized and technology-driven processes within the finance function itself, explains Jason Toshack, vice president and general manager of ANZ Oracle NetSuite.
As McKinsey & Company research noted, finance teams have reduced business costs by nearly 30 percent over the past decade, but are now looking to achieve even greater levels of efficiency in the coming years.
While maximizing resources plays a key factor, inefficiencies can often creep into financial processes, regardless of the skills and experience of the team.
These inefficiencies often come in the form of labor-intensive manual processes.
There are many manual tasks such as invoicing, expense processing and receivables that are done by the finance team. These add little value to the bottom line and can result in inefficient use of time, draining staff resources that could be allocated to higher value or more strategic forecasting and planning tasks.
Automating these repetitive and often mundane processes can have a lasting and positive impact on business. It has the potential to bring significant benefits to the finance team and can help drive the overall success and prosperity of the business by reducing resource consumption and increasing productivity.
Three key ways finance teams can benefit from automation and access to untapped resources:
1) Increase efficiency
Manual processes are often inefficient and can be a burden to a business, with tasks such as manual invoicing often requiring time and resources that could be better spent elsewhere.
Tasks performed by the finance team, such as manually entering supplier invoices, creating invoices and processing customer payments, can be very labor intensive, especially if the business is handling multiple transactions at once.
However, repetitive financial tasks are ideal for automation. For example, automating financial reporting and consolidation—a notoriously tedious and time-consuming task—can help the finance team speed up the month’s close, often with fewer people.
2) Better utilization of employees
With the workforce still in the depths of a national skills shortage, finding talent can be a difficult and time-consuming task for many businesses. The pool of experienced job seekers has dwindled over the past few years, leading to significant wage inflation.
However, the efficiency gains that financial process automation solutions can offer mean that skills shortages will not impair the finance department’s ability to do its job. With automation that takes care of repeatable processes, more work can be done with fewer people.
In addition, finance team members can be redeployed to other activities. The efficiency gains offered by automation can free up time for team members to focus on more valuable activities, such as analyzing data and providing strategic insights.
3) Reduce errors
By their very nature, manual processes tend to increase the potential for human error. Even small mistakes can have a big impact on businesses, opening up the potential for bottlenecks and double handling, which reduces efficiency. In some cases, such errors can even affect customer satisfaction and lead to compliance issues.
However, automating financial processes can significantly reduce the risk of human error. For accounts payable, for example, automated processes can compare invoice details with purchase orders and receiving documents to ensure prices, unit quantities and totals match – all without the potential errors of manual handling.
This three-way, automated matching process can streamline commitment processes and eliminate the cost of human error. It does this by automatically scheduling payments of approved invoices and flagging anomalies for further investigation by finance team members.
Access to automation
Technology adoption is key as the finance function works to demonstrate efficiency and careful management of resources within its own department. By automating processes, the team has the potential to maximize resources and contribute significant value not only in their own function, but across the company as a whole.
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