You’ve probably heard it already – automation is transforming the accounting profession. But what exactly does this mean for a business’s finance function? Automation can provide a vast opportunity to increase efficiency, leaving more time to add value and tackle the more important issues – with even greater potential to improve in the future.
Traditionally in finance, manual paper-based processes and systems were the norm. This led to significant time being invested in repetitive tasks and duplications of documents, with a heavy reliance on internal servers, a high risk of error, and an inability to access information whenever convenient. A move to the cloud, however, has set out to transform the way we do accounting, allowing us to access a wide range of additional benefits. Automation is becoming increasingly prominent in everyday life – think back just five years and a number of every-day tasks have changed in a short period of time.
Automation has the ability to streamline processes, with machines and technology capable of completing tasks previously assigned to a finance team member. This greatly reduces manual processing time and improves efficiency and productivity – also enabling employees to accurately complete tasks from anywhere at any time.
Cloud-based solutions can also assist in the audit process, creating a traceable record of each touch in the process and thus greater fraud protection and accountability. In a world without automation, employees must spend their time collecting data and ensuring that it is accurate, leaving little time for value-added tasks including analysis, reporting and strategic recommendations.
We have seen a dramatic shift over the last couple of years to core general ledger systems moving to the cloud. Products such as Xero and MYOB have fully cloud-based software offerings, and are able to integrate with a wide variety of add-ons. Key features include bank feeds, automatically importing bank and credit card statements directly from your bank, which can then be easily reconciled with cash coding and bank rules.
Machine learning is now at a point where the system can code transactions accurately based on the history of the business and similar businesses, removing the need for human intervention in the reconciliation process. The automation of the bank statement import process reduces the amount of time spent on a repetitive, time-consuming manual task; instead allowing the employee to direct their efforts at more pressing issues.
Another time-saving feature is the automatic calculation of GST returns, which can be directly filed to Inland Revenue, removing the need for manual calculations and duplication of data. Sales invoices can be set up to automatically send to customers, and automated invoice reminder rules can also be created, which takes the work out of chasing payments.
While taking the initial step and moving your general ledger system to the cloud is undoubtedly a great first move, building a comprehensive cloud ecosystem is really what will take your business to the next level. These “app stacks” can specifically target manual processes within the business to streamline processing and create an integrated cloud ecosystem driving efficiency within the business. Even though each individual tool is useful in its own right, the collective power of using them together can be invaluable to a business.
A prime example of a manual process able to be automated through the use of an app is payables processing. There are tools in this space that can extract information from photos or PDFs of receipts, bills and invoices, then push this information through to your general ledger system to categorise and post data to the correct accounts. Coding of bills can be learned by the system over time and can even be automatically split across multiple cost centres using pre-determined rules. It’s as simple as taking a photo with your mobile phone. This cuts down on the amount of time spent on data entry and increases efficiency.
Alongside the processing of bills, approval of payments to suppliers is another key business process which can be streamlined through automation. An approval app can provide multi-role and multi-tiered approval workflows for bills, purchase orders, credit notes, and sales invoices. Its key features provide for the automatic matching of purchase orders to invoices, and the ability to send purchase orders directly to suppliers – automating approval processes while also ensuring compliance and accuracy. Approval matrices can be set up to ensure the correct people are approving purchases and a full audit trail is maintained to aid business security.
Finally, financial reporting, whether it be to management or board level, is an area where large strides have been made in recent years. The ability for dashboard reporting and forecasting tools to pull data in from multiple systems and report by exception has allowed a number of businesses to quickly identify key pressure points aligned to the organisation’s strategy – enabling strategic planning, goal-setting, budgeting and forecasting. Gone are the days of 100-plus page board reports with pages of detailed financial reporting and accompanying commentary. Automated variance analysis allows the finance team to easily display those metrics that really matter to a business in a quick, visual manner, allowing key decisions to be made utilising real-time information.
While some may consider automation to be new and uncertain, the increasing accuracy of technology can provide numerous opportunities for those businesses willing to fully embrace the move into the technological age. By allowing automation into your business you can spend better time on those areas where it is most valuable and ensure you have a competitive advantage over those not yet ready to make the leap.
The comments in this article of a general nature and should not be relied on for specific cases. Taxpayers should seek specific advice.