Manage and perform: Why workflow software isn’t the answer for your financial close
By Shak Akhtar, SVP Finance Automation/Customer Experience Officer, Redwood Software
When we talk about finance automation and how it can help make the period-end close a non-event by reducing manual effort and errors and improving visibility and control, some people wrongly believe they are already doing that. “But I already have workflow software,” is a common response I hear.
The truth is, however, that while workflow software does indeed automate to a certain level it tackles only around 30% of the close process. It automates the reminders and some of the handoffs and handovers, but 70% of the process remains inefficient and sub-optimal, requiring manual effort and workarounds to close the books. The process analytics are limited, too, given they do not see all the steps in each task in the end-to-end process.
Take journal entry, one of the key pillars of the period-end close. You can use workflow software to send a form to someone asking them to post a journal, and the workflow software will send a message back to you when it’s been posted. But it doesn’t do the execution. It doesn’t post the journal to the general ledger (GL). It isn’t able to validate your form to say that what you’re asking for is not possible because the account code doesn’t exist or that it’s beyond your authority level and you need someone else to approve it. It’s just pushing the work around rather than executing the tasks.
Even with close checklist management, workflow tools – while they enable you to mark off an item on a to-do list and confirm a task has been done – don’t execute any of those tasks. And that leaves a remaining burden of huge manual effort at the end of every month.
Accounts payables invoices is a classic use case of workflow software for many companies. In this process, an invoice goes to a central invoice receipt department, often in shared services. An image of the invoice is sent to the approver and the workflow software manages that electronic approval activity. It does the handover and handoff but doesn’t post it to the finance or ERP system. Again, that execution part of the process still requires manual effort.
The bottom line is that workflow software is just poor value for money. It can cost millions, and you’re simply not getting as much bang for your buck as you do with true finance automation. You’re getting only 30% of the benefit. And workflow software is yet another platform with its own integration issues. It’s just a sticking plaster. But the sticking plaster isn’t big enough, because the bit that’s not being covered is the automation and execution.
Redwood’s finance automation, on the other hand, is holistic with full end-to-end capability across the close process and takes care of the monitoring and the executing. It lets you see exactly what is going on. A workflow solution will just sit there waiting for your answer to say if the journal or invoice has been posted or not. If something is failing or stopping, it only knows that there is a delay. It doesn’t know what the issue is. Redwood’s finance automation knows what the issue is, such as whether it’s been rejected because it didn’t pass the validation, the account number doesn’t exist or it needs to go for further approval.
Finance automation or workflow software? The choice is whether you want to tackle the remaining 70% and truly automate your entire close process, or just scratch the surface with workflow software and automate only your reminders and the handoffs.
Find out how to eliminate errors automatically and make your close a non-event with Redwood Finance Automation.
Get in touch with Redwood to find out more.