Automating Financial Processes To Embrace The Next Leap In Finance

While it may seem like so many functions are automated these days, that’s not the case in the finance world. Automation is not that common in many finance departments, even at some of the largest corporations in the world. According to Accenture, 80% of financial operations can be automated. That means your organization could free up significant employee time to focus on strategic initiatives, customer relationships and more impactful work.

These automation solutions are available now to reshape your finance processes, drive operational efficiency to new heights and empower finance professionals within your organization to focus on strategic decision-making. Implementing such technologies means significant advancement, liberating teams from the constraints of traditional bottlenecks like manual journal entry and account reconciliation.

The reason to automate financial processes

The reality is finance teams are always under increasing pressure to deliver day-to-day and month-end financial processes under tighter deadlines while ensuring compliance with ever-expanding regulations, compliance and accounting standards. At a time when the objectives of your finance team are increasing, there is a demand for deeper and more multi-faceted financial analysis as inputs to business strategy and decision-making.  

If most of your finance processes are largely manual tasks and activities, it’s difficult for any CFO to hire suitably qualified finance staff to keep up with the increasing demands both from a budget and recruitment perspective.  

The obvious answer to this challenge is to eliminate manual, repetitive tasks with financial process automation.

Earlier attempts to automate were limited in scope

Finance automation tools are not just about expanding existing systems such as Enterprise Resource Planning (ERP); they’re about reimagining how financial operations can contribute to a business’s success without increasing the size of the finance team.  Early attempts to automate financial processes were based on deploying robotic process automation (RPA) in financial operations. While RPA brought initial improvements, companies quickly recognized its limitations. It often proved less adaptable than anticipated, requiring significant maintenance and oversight and a lack of resilience when things change, such as ERP software upgrades or a business process enhancement needed to incorporate a new regulation. In the context of the record-to-report process, the need for a more agile, dynamic and comprehensive automation approach has become apparent.

Achieve efficiency through the automation of financial processes

The finance department, often a bastion of manual data entry and cumbersome spreadsheets, has undergone a profound transformation and continues to advance aggressively. The aim of this revolution is to redefine finance processes and financial planning, making them not just faster and more dynamic but also smarter and more responsive to changing or new requirements, such as sustainability reporting or Environmental, Social, and Governance (ESG) reporting.

The catalyst of this transformation is financial process automation, which aims to significantly reduce human intervention in record to report (R2R) process. 

Examples include: 

Many previously manual R2R tasks now becoming truly ‘touchless.’  Easy-to-use dashboards replace manual month-end close task lists to ensure tasks and activities are performed in the correct order to avoid process sequence errors, like processing cost allocations before all journals are posted or depreciating assets before all asset additions and disposals have been recorded while automatically reflecting the real-time status of day to day and month end closing tasks.

By automating finance operations, organizations liberate their finance teams from the drudgery of manual processes. Initiatives that previously would take days of meticulous work—collating numbers, reconciling accounts, posting journals and poring over spreadsheets—are now accomplished accurately in a fraction of the time with finance automation software. This shift expedites financial reporting and reduces risk by dramatically eliminating the potential for human error or fraud, which ultimately builds complete trust in financial reports and analysis.

The benefits of finance automation extend well into the strategic sphere. With the reduction in time-consuming manual day-to-day and repetitive month-end tasks, finance leaders can now focus on interpreting financial data, helping management make critical business decisions. This leap towards digital transformation is not just about keeping pace with the times—it’s about setting the rhythm for the future.

The road to financial process automation

Yet, the journey to automating financial processes is not without its challenges. For instance, replacing spreadsheets with automation technologies can be a significant cultural shift for organizations steeped in traditional manual processes and Excel workflows. The introduction of automated finance operations requires a coherent plan and a new transformational mindset, focusing on process improvement and organizational change management, which includes redefining roles within the finance team.

As we forge ahead into this new era of automated finance, it’s clear that implementing finance automation software is a foundation for building robust, scalable and error-resistant finance processes on the journey to digital transformation in finance. These technologies don’t just support the finance function; they redefine it, offering unparalleled efficiency gains that benefit the entire organization.

Tomorrow’s finance operations are molded by today’s initiatives. Integrating finance automation software within the finance department paves the way for enhanced financial reporting. Such software provides CFOs with real-time insights, allowing for more agile business decisions and the ability to forecast future trends with greater accuracy and speed. This is the essence of automating financial processes: providing a solid foundation upon which businesses can adapt and grow in an ever-changing business world.

The automation endgame

The ultimate goal of financial process automation is to create a finance function as strategic and dynamic as the markets in which businesses operate. By mitigating the risks and inefficiencies from spreadsheets and Excel-reliant systems, companies can unlock new automation opportunities within their finance processes, such as daily reconciliations to ensure ‘clean data’ and perpetual internal controls to identify and eliminate errors. This leads to a more streamlined month-end close and equips leaders with the information they need to make impactful and timely business decisions based on more reliable and accurate information.

The advent of finance automation software heralds a new age for finance operations—a time when the tediousness of spreadsheets is replaced by the sophistication of digital solutions. It’s a world where finance teams become forward-thinking architects of business strategy, enabled by automated systems that minimize human error and maximize efficiency. This digital transformation, while challenging, is a vital step toward a future where finance operations are not just a support function but a key driver of growth and business success.

The journey to a fully automated finance function is continuous, with each step offering new opportunities to enhance and refine finance processes. As businesses embark on this path, they will find that the benefits of finance automation extend far beyond mere time savings. It is a transformative journey that can redefine the finance function’s role and, by extension, the future trajectory of the entire organization.

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About The Author

Shak Akhtar's Avatar

Shak Akhtar

Shak Akhtar, General Manager of Finance Automation at Redwood Software, possesses extensive experience in finance and IT. With an accounting background with IBM and roles at SAP®, BEA and Wolters Kluwer/Tagetik, he brings a wealth of hands-on knowledge as he leads global initiatives in finance automation and record-to-report (R2R), facilitating client-led financial transformation.