Nowadays, there’s no excuse for soaking up your finance team’s valuable time and effort with clunky manual processes. If anyone in your team is still copying and pasting data between Excel sheets, they might as well be working with quills and parchment.
The range of technology solutions out there means core finance tasks - such as invoicing and expense management - can now be automated. This not only reduces the risk of delays and inaccuracies; it also frees your team to do more useful stuff.
You hired your finance team because of their intelligence, insight and expertise - don’t waste a single minute of their time with outdated finance processes. Take a look at the range of tools out there to help automate your core finance functions, and reap the rewards.
As with everything in the business world, the roles and responsibilities of finance teams are constantly changing. This is a great thing - without the constant drive to improve, you’d still be shelling out for abacuses and papyrus just to keep your accounts in good shape.
The rich range of finance technology has sped up many accounting processes. Previous multi-day transactions are now instantaneous, and real-time financial data can be used to inform business decisions. This has resulted in a huge range of benefits for businesses, including increases in efficiency and accuracy.
Moving from manual processes to automated ones can assist your finance department in the performance of its core functions. However, this doesn’t mean firing your team and handing things over to a sentient Excel sheet (not yet, anyway…).
Rather, it means making things simpler through standardising complex processes.
Automating finance processes results in the following five major benefits:
- Saving time: Manual tasks such as account reconciliation and variance analysis can be a major sinkhole of time and effort. With sophisticated accounting tools, there’s no longer any need to perform these manually.
- Reducing the likelihood of error: No matter how great your finance team is, they’re still only human. And by human, we mean prone to mistakes. Some estimates suggest around 80% of manually generated Excel sheets contain mistakes or gaps in information. So out of a random sample of five worksheets, just one will be accurate. Automating processes reduces the scope for error.
- Ensuring greater consistency: Despite widespread best practices, many finance team members have their own ways of doing things. Even standard processes such as double-entry bookkeeping can have differ between people. Automating processes creates greater consistency within teams, reducing the chances of mistakes and information gaps.
- Putting your data to better use: Automated, real-time data collection increases the utility of business information, allowing people to identify and address problems or inconsistencies at an early stage. This reduces the potential for loss.
- Reducing the chance of fraud: Obviously you trust your team - you wouldn’t have hired them otherwise. However, as much as you might trust them, the temptation to commit fraud is just too great for some people. Automating standard finance tasks makes things a lot more secure.
Put all of these benefits together, and you’ll unlock the potential of your finance team to do their best work.
Next, we’ll take a look at six of the most tedious and time-consuming processes you can improve through automation, starting with everyone’s favourite, core bookkeeping.
Traditionally, bookkeeping tasks were performed manually, meaning an entry was created for every item of business revenue or expenditure, and accounts were tallied at regular intervals. Needless to say, this process was time-consuming.
Modern technology has revolutionised bookkeeping in two broad stages. First, the advent of Excel revolutionised the speed and convenience with which these tasks could be performed. This lead to incredible improvements in the accuracy and responsiveness of bookkeeping, providing businesses with point-in-time accounting information.
Second - and arguably more importantly - the availability of dedicated accounting software has simplified bookkeeping processes even further. Making bookkeeping more accessible and easy to understand has made life easier for countless businesses, and has helped business owners take control of their accounts.
Modern accounting tools such as Xero, QuickBooks, FreshBooks and Zoho Books continue this onward march of technology. Using these tools, finance teams can now automate the vast majority of bookkeeping tasks according to industry best practices.
Not only does this save time; it also improves the accuracy and consistency of accounting information.
Invoicing and accounts receivable
Invoicing and accounts receivable are the lifeblood of any business. Get these steps wrong, and you won’t have access to that much-needed revenue stream. Soon enough, the whole machine grinds to a halt.
Unfortunately, many of the traditional processes for issuing and tracking invoices can be incredibly time-consuming, not to mention prone to user error. Accurate invoicing can also involve a number of different teams working together (for example, sales, customer service, and finance), increasing the potential for mistakes and delays.
As with core bookkeeping, the range of dedicated accounting software out there includes a number of handy ways to automate invoicing and accounts receivable. This includes generating and sending invoices, reconciling invoices against sales and delivery records, and providing prompts for reminders to be sent to customers.
On the flip side of accounts receivable, ensuring your business’s invoices and bills are paid properly is also one of the most important jobs out there. Unfortunately, it can be one of the most time-consuming.
For many small businesses, processing invoices involves checking information, sending the invoice to the correct person or team for approval, processing the payment, and finally, recording the transaction. This can involve up to half a dozen discrete steps, increasing the risks of delays and bottlenecks.
Modern accounting software solutions help standardise and automate these processes, including scanning invoices and capturing this information securely, as well as prompting those responsible to progress their steps in a timely fashion.
Not only does this help take the anguish out of accounts payable, but it could also save your business money through taking advantage of early payment discounts. Plus, it’ll keep your relationships with suppliers hunky dory.
Tax compliance and reporting
Here’s where things get well and truly tangled. In the past, businesses needed support from an experienced (and expensive) professional to even begin to calculate their tax obligations. This process was not only laborious and dense; most of the time it appeared to be conducted in another language entirely.
More so than for any other item in this list, accounting software has done wonders for finance teams trying to automate their tax requirements. Dedicated accounting software can now calculate tax requirements for every transaction.
In addition, platforms such as Taxify can help businesses to quickly and accurately understand their tax obligations for transactions occurring across international jurisdictions. This saves time and helps businesses to be in a good state for audit.
Anyone who’s ever missed a pay cheque will tell you: nowhere are the stakes higher for a business than with payroll. Your employees will be a lot less willing to put in the hard yards if their pay doesn’t appear in their accounts when expected, right down to the dollar.
Adding to these high stakes is the fact that payroll can be hideously complex to manage manually. Not only do you have different salary levels to account for: there’s also holiday entitlements, superannuation, and fringe benefits to factor in.
Automating these processes through integrated accounting software can save your team a huge headache, not to mention keeping your employees from considering mutiny.
Traditionally, managing and tracking company expenditure has been one of the most time-consuming and frustrating finance processes out there - not to mention one of the most expensive.
Regrettably, expense management often involves a complicated number of steps. From employees holding onto receipts and filling out expense reports, to managers reviewing and approving them, to the poor finance team reconciling everything and processing reimbursement; the whole situation is like a merry-go-round of misery.
Bear in mind, these processes aren’t just annoying for your finance team; they’re annoying for pretty much everyone. Integrated expense management tools can help a lot here, both through automating processes and making sure expenses are promptly paid.
Spendesk's platform allows finance teams to automate recurring expenses and match invoices to expense claims, significantly reducing the amount of time spent on managing company expenses.
Crucially, Spendesk also combines all business expense information into a single expense dashboard, giving users an accurate and up to date picture of company expenses at any time of the month.
Automate, then integrate
Once you’ve automated a bunch of finance processes, you’ll need a way to ensure your software is communicating and sharing information. There’s no use having a bunch of slick processes if they don’t all talk to each other.
For example, there’s not a lot of point in automating your accounts receivable if your accounting tool isn’t capable of interfacing with your inventory management tool.
Most of the leading accounting solutions out there feature a high degree of integration between tools, meaning the different parts of your business can share information quickly and easily. Make this a focus, and ensure there are no gaps between your tools.
Conclusion: free your finance team to do its best work
Trust us on this: nobody in your finance team spent all that time studying (not to mention racking up huge student loans) just to spend their days copying and pasting data between Excel sheets.
Through automating core processes such as bookkeeping, accounts payable, invoicing and accounts receivable, tax compliance, payroll, and expense management, you can save your finance team a huge amount of time and stress. Not only that, you’ll help ensure accurate and consistent financial information.
Rather than manually poring over figures in Excel cells, your finance team will be freed up to analyse and interpret financial information and trends, and can work with the other parts of your business to realise efficiencies and help you grow.
Investing in software to automate tedious financial processes is a small price to pay, especially when the benefits are so significant.
Here's your guide to the best finance tools for your team: