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Financial Automation
Financial Automation
When Institute of Management Accountants and analytical. More than half of those surveyed
(IMA) President Jeff Thomson penned an by IMA said their work had become more
article about the prominent trends that would analytical in the last 18 months, and 92% said the
affect accounting in 2021, “automation will no transactional processing they’re responsible for
longer be debated”1 topped the list. Results would significantly decrease over the next five
from the most recent IMA survey back up that years and they’d need to become more analytical.
prediction. While the majority of businesses are
just beginning to reap the benefits of automating Professionals in this space are optimistic about
financial processes—less than one-quarter2 of how automation across financial processes
those surveyed said their processes were largely can help their organisations, and, true to form,
automated—they do realise its potential and are they’re very realistic about how to get there.
taking steps to prepare. Automation can’t work without a solid, reliable
data infrastructure, so it’s no surprise that more
As more processes are automated, the work than two-thirds of the businesses surveyed have
required in accounting and finance roles is implemented or are currently implementing
shifting, the survey found, as professionals move cloud-based accounting software to build
from being reactive and transactional to proactive that foundation.
1
https://www.forbes.com/sites/jeffthomson/2020/12/18/speeding-towards-transformation-2021-trends-in-finance-and-accounting/?sh=2b5d25a34ab8
2
https://www.imanet.org/-/media/1556f3868820422ea39760b48abd4755.ashx
1 2
Overview 8 Financial How ERP
Processes That Addresses These
Should Be Challenges
Automated
There are key steps businesses can take to start emails or PDFs. Software with machine learning
automating processes and realising the benefits can be programmed to learn from the process
of doing so. Many companies begin by leveraging over time and, for instance, “read” a bank
technologies to automate different parts of the statement and move the data to the right fields in
accounting and financial processes. Financial data the accounts receivable solution.
is core to everything the business does, so it must
be accurate and up to date. Once that’s in place, The benefits of fully automating all processes
what should companies focus on automating? associated with data entry and capture are as
beneficial as they are obvious—more accurate
1. Data Entry data, less time spent verifying and reconciling
Data entry is often one of the first things the data, and more time to look at and analyse
businesses automate. A recent survey from Robert information to drive process improvements and
Half shows that a growing number of companies greater efficiency.
have automated data entry and collection in the
last few years. 2. Accounts Payable (AP)
Automating the accounts payable process is
As companies implement an accounting system, important to make sure the business pays its
it often introduces some automation. There are bills on time and can take advantage of optimal
different levels of technology that can be used payment terms to hold on to cash longer and
to automate data entry, from importing data and receive discounts, when offered. AP automation
enabling rules-based workflows, to robotic process technology matches invoices to supporting
automation (RPA), to more advanced artificial documents, such as purchase orders and
intelligence (AI) technologies. receiving forms, to ease the tedious work of
manually matching documents.
Automation on one level may include the ability
to automatically import and reconcile bank Software can also set rules that automatically
statements, or integration with other business assign the correct general ledger code to each
systems (such as a point-of-sale system) to pull invoice, eliminating the time spent manually
in accounting and financial data. Fully automated coding them and the inconsistencies that
data entry tools can pull data from structured introduces. Additionally, digital workflows can
and unstructured documents without any human alert necessary approvers when actions need to
intervention, using something like optical character be taken to make sure invoices are approved and
recognition (OCR) technology to, for instance, paid in a timely manner.
automatically capture data from paper documents,
ERP software automates business processes ERP systems also offer value in joining together
by collecting all information from across an business processes end-to-end, allowing the
organisation in a central database and using technology to mirror, guide and improve the ways
that data repository to automate workflows. ERP your business gets things done.
systems not only provide the platform for process
automation; they help the business establish For example, an order-to-cash process for a
and maintain rules that ensure compliance with products company, in its simplest iteration,
legal and regulatory mandates. The accounting touches the systems for inventory management,
modules connected to ERP systems, for example, order management, accounts receivable and
establish strong financial controls and ensure that possibly credit management. An ERP platform
the business adheres to all applicable regulatory hands off the process from one department to
and accounting standards. another to complete the transaction, while also
tracking that data so it can be used for financial
Most businesses start by automating processes reporting, forecasting, budgeting, analysis
associated with core financials and gradually and more.
move on to other aspects of their organisation.
For instance, they might move to an accounting ERP systems extend far beyond accounting
solution that can automate AP and AR by and can scale to address the growing needs of
extracting information from invoices, organising a business.
them by due date, and automatically sending out
reminders for bills to customers. That automation
should make closing the books much easier, Leading ERP platforms like NetSuite
meaning financial statements are ready within a
week of a quarter end. offer modules for inventory and
The organisation might add an expense
order management, procurement,
management system that allows employees to warehousing and fulfilment,
upload receipts and submit reports online, then
set custom rules for approvals so each report
production management, financial
is routed to the right manager. It’s best to get planning and analysis and more.
all these applications from the same vendor to
avoid costly and unreliable integrations. A unified
ERP platform with modules that can support
various business functions and needs is the best
approach for most organisations.
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