Finance Process Automation – How forward-looking CFOs are changing the landscape..
By its very nature finance departments are highly oriented & structured, however, the shifting business environments are forcing finance teams to adapt to new working styles. Disruption is the need of the day for CFO & forward-looking CFOs are learning to embrace the new hybrid norm and actually moving their department through the rapid process.
What is Process Automation?
Process Automation is the practice of automating regular, mundane activities in finance, thereby freeing up human time and skills for more advanced tasks. Process Automation leverages technology to speed up repetitive tasks saving time, eliminating human fatigue from repetitive tasks, and improving productivity & cuts-cost. According to Gartner, a single robotic process automation costs one-third of the costs of an employee
Typical Areas of Robotic Process Automation
For CFOs still grappling with the means to leverage process automation, here are some of the key areas implemented by progressive CFOs.
1.Accounts Payable & Expense Management - AR being on the other side of AP, streamlines the payments to vendors, ensuring regularisation of payments which is the best global business practice to control input costs. The entire process of approval systems, purchase orders reconciliation, outstanding recons & other steps severely delay the ability to make payments on time.
Expense Management - Managing, entering & approving hundreds/thousands of daily & monthly expenses is most tiresome, error-prone & frustrating not only for the finance executives but also for the people involved in submitting expenses. The entire process envisages several activities to be completed before an expense can be entered into the system
Automating such a process can pretty much free up human time and speed up the entire process & as a CFO, one could digitize the function by configuring AP automation software, which actually ensures streamlining the entire cycle, shortening process time & delivering greater accuracy.
2.Invoicing & Cash Application - Invoicing & Account Receivables are the life-bloods of any organization & most organizations continue to use traditional methods for issuing and tracking invoices. In today’s era, where we are dealing with a huge number of financial transactions. This is where processes need to be in place to ensure the optimum functioning reducing backend-led delays jeopardizing cash flows.
3. Payroll Management - Ask around teammates in HR as to the implication of a rupee less being paid to an employee, and the reason we all know the importance of error-free payroll management. Preparing payrolls can be terribly time-consuming wherein we account for late arrivals, leaves, adjusting for leaves, absenteeism, taxes, and a host of other typical employee-related deductions. Post-calculating, and ensuring that the salaries are automatically transferred to specific employee accounts error-free is really tiresome and prone to both human error and fraud. (Remember Satyam).
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?4. Compliances - The entire gamut of tax compliance and reporting is another traditional area that could be easily automated. Calculating tax liabilities, computing input credits, and ensuring that what’s being reported is legally correct not just factual, can be tedious & may lead the organization to non-compliance. Usually monitoring, identification, and reporting of issues keeps organizations compliant according to regulations but on the other side pulls down the momentum if not automated.
Automating Compliance enables a company to ensure a smooth audit trail and achieve a higher complaint rate.
?Future CFO Landscape
In order to implement process automation within the department, CFOs need to bi-furcate their focus into two parts, one plays the role of the disrupter in driving technology innovation, and the other, in driving stability during the change process. Process automation often comes with a double edge sword in that it brings down the requirement of human resources in finance teams and ensures stability within the team
Forward-looking CFOs are increasingly becoming catalysts with the vision of scaling ?
CFOs must play a huge role - in helping meet bottom-line requirements from moving to cloud-based ERP and RPAs. Once the basic technology infrastructure is in place, CFOs will need to look at how to integrate varied processes into a holistic whole.
Post-digitizing mundane tasks by implementing RPAs within the organization, CFOs will need to explore options of ML and AI to transform their departments to become intelligent and predictive.
“Life as a CFO is going to be more interesting than ever before..”
Chief Financial officer | Expert in Financial Management, Digital Finance and Business Transformation
1 年H