By Kapil Rana
Automation technologies have helped to transform the finance and accounting industry, such as banks, insurance firms, and accounting service providers around the world. Businesses are adopting digital transformation as their core strategy to augment revenues and overall profit margins. According to Statista, the overall transaction value in the Indian FinTech market is estimated to reach USD 137.8 billion in 2023. When looking through a global perspective, as per the data published by Statista, the overall transaction value in the global FinTech market is predicted to reach USD 9.82 trillion in 2023. There are several benefits, such as gaining useful insights from existing data and improving financial risk management, for companies that employ automation in their daily operations.
After adopting digital transformation, companies report an increase in speed, accuracy, and reduction in operational cost. Additionally, automation has also improved the efficiency of business processes that previously require manual interaction and has enhanced customer experience. In today’s competitive world, the roles of people involved in finance and accounting are evolving and require significant investment in technology adoption to stay profitable in the long run. Moreover, the changing needs of consumers and their rising expectations can force any organization to rethink their business models and to start offering their services through digital platforms.
Automation: A solution to put valuable resources into better tasks
Most finance and accounting professionals are tied up with the tedious operational tasks and rarely get time to focus on value-adding activities. There is an increasing necessity for organizations to automate such time-consuming processes, giving finance personnel adequate time to provide analytical insights. Automation, along with cutting-edge predictive algorithms, allows professionals to look into the future and put businesses into the path to success.
It has been shown that leading world-class companies are employing automation in finance and accounting departments, putting their workforce to value-adding activities. In their journey of digitization, they’re starting with finance and accounting processes to get things done faster and more accurately. Automation, in combination with other new technologies like artificial intelligence/machine learning (AI/ML), robotic process automation (RPA), and data analytics, opens more possibilities for businesses to explore.
Implementing finance process automation for competitive advantage
Multiple financial processes can easily be automated by implementing the right set of technologies. Namely, the processes include bank reconciliation, accounts payable, account opening and closure, tax compliance and reporting, invoicing, and expense management. Automation can significantly reduce errors when it comes to invoice creation and ensures end-to-end payment processing to save time and cost. Accounting professionals spend an enormous amount of time manually reviewing and validating transactions. Automating bank reconciliations can not only reduce their workload but also allow them to engage in other activities that matter for the growth of the business.
Let’s dive a little deeper into how automation is transforming the accounting tasks.
Some major use cases of Automation in Finance and Accounting.
1. Accounts Payables (AP) and Accounts Receivables (AR)
There’s a lot to keep track of in AP and AR management. It requires numerous repetitive rule-based tasks. Automation is capable of setting up processes for different vendors and clients, processing payments and receipts, sending pending payment notifications, and much more.
2. Invoicing
Manual invoice processing might take as long as 4-16 days. However, by automating the invoicing process, financial firms can monitor receipts, extract data, create & send custom invoices, send reminders, and much more in just a few minutes.
3. Reconciliations
Reconciliations are an important part of all accounting processes. It ensures that the records are in agreement as well as appear accurately on the financial statements.
Automation enables quick checking and reconciliation of balances and creates optimal reports to review and approve.
4. Compliance and Reporting
Automation helps in capturing and manipulating data to support regulatory reports. Besides, it also enables the finance and accounting firms to create an audit trail or reports and get confirmation of receipts.
Apart from ensuring accuracy and consistency in financial information, automating these processes will save your finance and accounting team from stress and provide a better experience to your clients. Instead of going through multiple spreadsheets, with finance automation, you can put your finance and accounting department into analyzing and interpreting financial information and help you grow.
(The author is Founder and Chairman, HostBooks)
Thank you for explaining that along with cutting-edge predictive algorithms, automation permits professionals to look into the future and set businesses on the route to success. This got me thinking that automation software is the best solution for firms that struggle with task distributions among the staff. Consumer loan automation marketing software, for instance, will not just provide an opportunity for professionals to focus on manual tasks but will also help in the decision-making of a company.