Business companies may be different from each other in many ways, yet they all share the same basic finance functions. All companies have to manage their cash flow properly, and they have to make sure of the integrity of their financial reports. These companies have to make sure that their finance processes are accurate, efficient, on time, and compliant with regulations.
Any mistakes that occur involving any of the finance processes can result in rather serious consequences, including severely tarnishing the reputation of the company. And that’s where automation comes in.
For several years now, the finance department has benefited greatly from the use of RPA (Robotic Process Automation). These automation tools have made finance processes more accurate, much more efficient, and securely compliant. These tools significantly lessen the necessity of human controls and reporting mistakes, and also reduced operational costs.
areas of finance where the use of automation can offer optimal benefits:
One of the most important treasury functions is cash management, which involves making sure that the company has the required amount of ready cash on hand so that operations can continue to run smoothly. More specifically, a company needs to understand the current cash position at any point in time, and cash reconciliation and reporting processes are crucial to this goal. The company has to reconcile consolidated bank account balances against the cash reported on the balance sheet.
Done manually, these tasks can be replete with errors. But RPA can automate these tasks so that cash position reporting and forecasting can be more timely and more accurate. The automation also allows the company to make better use of its limited financial resources.
Procure to Pay
The whole process of validating and paying vendor invoices for goods received is crucial to certify that the correct items have been procured, the billed amounts are accurate, and that payments are on time to avoid penalties such as late fees and interest rates.
Normally, the accounts payable department reserves considerable resources to manually perform certain related tasks, such as setting up new vendor accounts, entering information from invoices, matching billed amounts to purchase orders, and authorizing payments.
But RPA can automate these accounts payable tasks. Automation can update vendor records, extract invoice information, and validate amounts to make this whole process much more efficient and error-free.
Order to Cash
A business has to invoice customers and collect funds from customers to make sure to maintain sufficient cash flow and business liquidity. Usually, the accounts receivable team takes charge of these various tasks. The team has to set up new customer accounts, produce accurate invoices based on incoming sales orders, and collect invoice payments.
These tasks usually have to endure several mistakes along the way, as they’ve always been done manually. But these mistakes can result in delayed cash flows and even lost revenue.
But with RPA, such mistakes can be minimized or even downright eliminated. Automation can retrieve information accurately from a range of sources, and reconcile the various amounts to make sure of accuracy.
Various Financial Operations
The finance department is in charge of several crucial responsibilities. It has to manage the monthly general ledger close process and also generate accurate financial reports on time. It’s true that finance enterprise resource planning (ERP) systems have already begun automating many of these financial processes, but the finance department is still awash with too many repetitive, manual, and error-prone tasks that require human involvement. Actual people are still performing repetitive tasks such as performing manual reconciliations, journal entries, and external reporting.
These tasks can be passed on to RPA instead, and automating these manual processes can make them more efficient, more accurate, and always on time.
Financial Planning and Analysis (FP&A)
A company has to make rational business decisions, and these decisions have to be based on accurate and timely financial information. To help the business make these sound decisions, the company has to perform crucial tasks such as budgeting, forecasting, and management reporting.
In the past, it was common enough for the FP&A department to use up too much time on tasks such as sourcing, aggregating, and formatting data. It can be somewhat frustrating when that time can be of a much better use for financial analysis and strategic planning.
With RPA, a company won’t have to suffer such frustrations any longer. These data-related tasks won’t have to be done manually anymore. Automation can significantly speed up various processes while reducing the chances of error. This, therefore, frees up the finance professionals in the department to focus their brains and skills on more appropriate tasks.
The Bottom Line
Automation is a current buzzword in business these days, and it’s a trend that’s likely to continue for some time to come. It’s not a fad at all, because the underlying principle makes too much sense. Why use valuable employees for mundane, repetitive tasks that can only proceed slowly and with mistakes, when automating these tasks speeds things up and eliminates those mistakes?
RPA is simply the latest tool in automation, and it can surely help with these aforementioned finance functions as well.