What do you know about finance functions? Everyone has a form of hard work that they feel reluctant to do. Doing the housework, taking out the trash, or checking the budget are all repetitive jobs that can be boring. You can bet that most people will buy a piece of equipment if modern technology someday fully automates the process of performing these tasks.
Because of this, many business owners include financial process automation within their accounting systems. When compared to traditional accounting, automating financial operations saves not only time but also protects your data. Furthermore, it reduces mistakes and gives you a better idea of your company’s performance.
As your business grows, the simple bookkeeping you used at first changes into a more complex system that requires a deeper understanding of finances.
What is financial automation?
Financial automation is as easy as setting up automatic bill payments, paycheck deposits, or monthly savings. The idea is the same for businesses and organizations but is much more significant.
Financial automation involves using technological tools to carry out operations with little human assistance. Employees can handle these tasks efficiently, providing more time to work on more challenging jobs.
Finance Functions to Automate in Your Business
The foundation of accounting is bookkeeping. When businesses automate their bookkeeping tasks, they can quickly retrieve and use these records. Automated bookkeeping helps with timely record keeping. For example, you can record routine transactions immediately without leaving anything out.
Traditionally, previously businesses carried out bookkeeping activities manually, which meant that each revenue or expense item for a business had its own record and accounts. Regrettably, this process takes a long time and resources.
In two main stages, modern technology has transformed bookkeeping. Firstly, with the introduction of Excel, the speed and ease at which people complete tasks changed. As a result, bookkeeping becomes very accurate and quick, and firms can get accounting data from a single point in time.
Secondly, and most importantly, the availability of specialized accounting software has made bookkeeping much more straightforward. Making bookkeeping more accessible and easy to understand has made life easier for many businesses. It creates an avenue where business owners have more control over their money.
Account Receivable and Invoicing
Any business depends on invoicing and receivables to survive. If you don’t follow these steps correctly, you won’t have access to a source of income. The entire system eventually comes to a halt once there is no invoicing and accounts receivable.
Unfortunately, most traditional ways to send invoices and keep track of them can take a lot of time and leave room for mistakes. Different departments, such as sales, finance, and customer service, must work on accurate billing to minimize the risk of errors and delays.
Similar to basic bookkeeping, there are several useful techniques to automate accounts receivable and invoicing using specialized accounting software.
Unlike accounts receivable, one of the most important things your company needs to do is make sure it pays its bills and invoices on time. Unfortunately, it often requires more time to actualize.
For many small businesses, processing invoices involves checking information, sending the bill to the right person or group for approval, confirming payment, and logging the transaction. It could take over 12 different steps to achieve, which creates more bottlenecks and backlogs.
Accounts payable automation processes help complement business while safely viewing invoices and capturing data. These processes enable users to move through with their plans swiftly. It lessens the pain associated with accounts payable and helps the company save money.
Payroll has the highest stakes for a firm, as anyone who has missed payment can attest. Your workers will be far less motivated to work hard if their salary doesn’t appear in their accounts as anticipated.
Because manually managing payroll can be excruciatingly difficult, the odds are stacked against you. In addition to the different wage levels, you must consider benefits, retirement plans, and the right to time off.
By automating these tasks with unified accounting software, you can save your team from a lot of headaches and make it less likely that employees will rebel. Additionally, specialized software programs like
Tax reporting and compliance
Here is where things really start to get complicated. Before, businesses had to hire a skilled (and expensive) professional to help them figure out their tax obligations. It’s a tedious process that requires the utmost attention.
More than anything else, accounting software has been a lifesaver for finance teams trying to simplify their tax responsibilities. Now, specialized accounting software can determine the tax obligations for each transaction.
Platforms like Taxify can also help businesses quickly and correctly determine their tax obligations when they do business in different countries. Furthermore, this reduces time spent and helps businesses ready for audits.
One of the most time-consuming, annoying, and expensive financial tasks has always been keeping track of a company’s expenses.
Regrettably, managing expenses frequently involves a lengthy process. The whole thing is like a never-ending cycle of pain, with workers holding on to receipts and filling out expense reports while their bosses look over them. The poor finance team has to reconcile everything and process reimbursement.
Remember that these procedures are tedious. An integrated expense management tool can automate processes and process payments swiftly.
The Benefits of Automating Finance Functions
You must first describe your finance processes and map out each step before you can begin automating. Moreover, this process can help you get your accounting in order and take some of the load off your accountant by laying the groundwork for automation.
Once you’ve done this, you’ll be able to see where more automation of supporting tasks is needed and build a network of automated and human-driven processes that work together to create new ways to be more efficient.
For example, a credit card company could automate the application process for new customers, giving them a predetermined loan rate and other deals. Additionally, automation gets rid of the annoying problem of human error.
Even if you can guarantee that your team enters data accurately 99.99% of the time, that 0.01 percent error can still lead to problems. A manual method is much more likely to make mistakes than an automated one, which is more accurate.
Above all, a network of connected automated financial operations offers comprehensive corporate insights. A system organizes data into reports and figures so you can make decisions faster and with more knowledge, saving you money and time.
Conclusion – Finance Functions
Businesses are increasingly using automation in finance to get better results and increase customer satisfaction. Automation cuts down on manual data entry and gives you enough time to focus on essential business tasks.
So, the best thing for your business is to automate these six financial tasks. Interestingly, you don’t have to spend much to implement the right finance automation.