Finance Automation: The Future of Financial Services

Finance automation is the process of leveraging technology to automate financial operations within a company. Automation helps to streamline and optimize processes, significantly enhancing accuracy and efficiency. By minimizing manual intervention, finance automation contributes to smoother and more error-free financial procedures, empowering businesses to focus on strategic decision-making and value-added tasks.

Components of Finance Automation

Automating the function has several components. A few of them are - 

Robotic Process Automation (RPA)

Robotic process automation uses software robots to automate day-to-day manual tasks of the finance team. RPA mimics human interaction with systems to perform manual tasks such as data entry, data extraction, report generation, etc. Unlike humans, a ‘bot’ doesn’t suffer from decreased efficiency over time. They can work tirelessly 24x7 to complete tasks. 

Artificial Intelligence Chatbots

Using chatbots for inquiries and customer service is a common practice. Chatbots are virtual assistants which utilize natural language processing to interact with users. Chatbots have multiple purposes both within the organization as well as externally to interact with customers or even suppliers. You can directly enquire about fund balances, anomalies, or frauds in interactions with the chatbot, and make your processes more efficient. 

Machine Learning

Machine learning stands as a paramount component of finance automation, enabling machines to execute tasks while continually learning and enhancing their performance based on data. In the realm of finance, machine learning proves indispensable, facilitating data analysis, predicting financial trends, and identifying avenues for cost-saving opportunities.

Data analytics and reporting

Data analytics is the method of analyzing data to derive useful insights. Deriving insights from financial data is a common and necessary practice. Therefore, utilizing real-time data analytics technologies is extremely helpful in creating a visual representation of your financial data and deriving insights from it. This can aid in functions such as month-end or year-end closing, as well as conducting audits.

Where Can You Implement Finance Automation

Finance automation can be used in a variety of business functions. 

Accounts Payable

Accounts payable automation is a very common solution utilized by businesses. It automates the entire AP workflow - from invoice digitization to payments, and consolidates it into a single platform. The accounts payable automation process generally works by uploading vendor invoices into the software which are then extracted, GL coding and cost center allocation, getting approvals from various business heads, and processing payments via ACH or wire transfers from the software itself. This process significantly reduces manual errors from AP processes and reduces processing time. 

Accounts Receivable

Accounts Receivable is vital for an organization due to its direct impact on cash flow. With automation in AR, repetitive and time consuming tasks like invoice generation, invoice delivery, reminders for payment and even payment collection can be streamlined. With predictive analytics on the company’s receivables, a company’s financial planning and cash forecasting can be made more accurate. 

Procurement

Procurement functions can significantly benefit from automating their procurement processes to maximize efficiency and reduce the time taken. Time intensive tasks like supplier identification, PO management, inventory management, vendor compliance and contract management can be automated to enhance efficiency. Centralizing procurement activities on a single platform also helps reduce the risks of over-purchasing and fraud by providing complete visibility of all purchases and expenses. This also improves an organization’s decision-making process by enabling teams to make more informed decisions regarding resource allocation.

Procure-to-Pay

The procure-to-pay process, from vendor selection, purchase request management, purchasing goods, invoice processing and payment can also greatly benefit from automation. Tasks like management of purchase requests, supplier databases, purchase order creation, invoice and purchase order approvals and payments can be automated by eliminating human input. Software that automates procure-to-pay processes also help improve cross-department collaboration and provide real-time reports to give you a holistic view of your spend. 

Financial Planning & Analysis

With automation in the financial planning and analysis process, teams can benefit from minimized errors, shorter cycle times, and increased productivity. By automating tasks like data collection, sanitation, consolidation, and report preparation, productivity of teams can be greatly improved, so they can shift their focus on greater priorities.

Payroll

Finance automation can also be used to manage payroll functions effectively. Automated payroll processing, employee expense reimbursement, and tax filing and declarations platform can help streamline payroll-related duties and facilitate a healthy employee culture in the organization. 

Benefits of Finance Automation

1. Improve accuracy: Humans tend to make errors while performing repetitive tasks. Automating your financial processes ensures that your results are error-free and accurate, facilitating better results. 
2. Save time and improve efficiency: Entering data manually, or writing long queries to extract relevant information is a cumbersome and time-consuming task. Automating these processes not only helps you save your finance team’s time but allows them to focus on more strategic tasks, taking off manual intervention from their workload. 
3. Optimize costs: Some AI tools provide you with saving insights to reduce costs across business functions. This along with anomaly detection technology help you identify areas where you are losing money, and plug any leakages before they occur. 
4. Streamline processes: Most manual tasks are spread across various departments, from procurement to accounting. Having data in different formats across the organization reduces visibility and leads to hard-to-conduct audits. Automating processes ensures that your data is present on a centralized platform, reducing the hassle of searching and collecting data for reporting purposes. 

Select the Right Software for your Business

As automation gains momentum in every business need, finance functions have also adopted this technology rapidly. A complete finance automation solution actively syncs with your existing software and provides great value for money. Select software that scales with your business needs and helps you automate multiple functions at once.

ClearTech's Accounts Payable automation software lets you automate your entire payables process while providing smart insights into vendor spend, invoice anomalies, and uncontracted spend. It provides you with a completely touchless invoice processing experience, with:

• 100% accurate OCR and managed services
• Smart approver appointment and one-click approval process
• A one-click payment processing experience

With smart spend and savings dashboards, you can also get cost-saving insights without having to create your dashboards or analysis.