The automation-minded CFO first needs to decide how and where automation can best do its work. In other words, which finance functions would benefit the most from automation?
The answer lies in looking where manual processes are slowing down finance operations and creating bottlenecks. Many working in finance today already understand that paper-based documents, phone, and fax are outdated methods of workflow management. But they may not understand that even Excel spreadsheets and email while improving over paper and fax, are still overly cumbersome methods prone to errors and inefficiencies.
When considering where to start with automation, look first to finance functions that require a great deal of time manually entering data. Also, examine any processes where a lot of errors are made or an inordinate amount of time is spent checking for errors or correcting them. Finally, any workflow with an intricate request-and-approval process could be greatly streamlined with automation.
Accordingly, consider the intensive data entry of accounts payable and receivable. Think about how one error in a spreadsheet of vendor and contract approvals could carry over to other areas, compounding the mistake. Or think of a complicated request-and-approval process for capital expenditures (CapEx), where requests above a certain threshold need to be elevated to higher levels for approval — perhaps even to you as CFO. Automation can make a substantial difference in these and other areas of finance operations.
What are the Benefits of Workflow Automation?
The CFO considering workflow automation must also weigh the costs and benefits of implementation. After all, this will require having your finance team become familiar with a new piece of software or platform. So what benefits can she expect from automation?
Arguably the most obvious benefit of automated workflows in finance operations is greater efficiency. An automated platform can eliminate a great deal of manual data entry, which cuts down on the potential for human error. The system can make calculations and auto-populate fields. For a request-and-approval process, the automated workflow can automatically direct different types of requests to the correct approver. All these features increase speed and accuracy.
Better Transparency and Reporting
Other immediate benefits of automation are Improvements in transparency and reporting. A customized dashboard can provide lightning-fast insights. If your invoice or CapEx approvals are hitting snags, you can identify the bottlenecks right away. And the automated system can provide accounting on a continuing basis, so you do not have to wait until the financial close to view insights from a report.
Free Up Your Finance Team for Higher Level Thinking
Various reports have shown that finance teams spend a large proportion of their time processing transactions. Much of this work tends to be a low-value activity that is inordinately time-consuming. By speeding up transaction processing, automation can free up your finance team to focus on more strategic and insightful work.
By allowing your finance team to focus on higher-level thinking, you are more than likely to improve team morale as well. Less manual effort and mistakes will bring peace of mind. The ability to focus on strategic efforts will likely increase job satisfaction among team members. The payoff here will be more motivated and decreased turnover.
Any Potential Challenges of Implementing Automation?
It is tempting to believe that automation will immediately bring on days of wine and roses with a new trouble-free finance department. But you must be prepared for some initial resistance to new technology and processes. It may be advisable to start small by automating only certain types of finance workflows, then build on that success over time by expanding automation to additional workflows.
Also, be aware that some amount of training will be required for the new automated system. Retraining may be necessary down the road. To minimize this training burden, seek out automation tools that are relatively intuitive and easy to learn.
What are the Costs of Delaying Automation?
While automation might be a clear net positive for your finance team, any CFO has a lot of items on his plate competing for attention. It might appear easier to simply delay introducing automation into your finance workflows. If so, you should be aware of the costs of the delay.
Without automation in place, all the inefficiencies and bottlenecks of your current manual workflows will remain. If your company is growing, these problems will tend to get worse over the long run. The current snags in the process could result in missed deadlines, additional mistakes, and possibly even hits to your bottom line.
Since manual routines and spreadsheets are error-prone, any finance team using them will be subject to increased risk. Manual processes make it more difficult to follow internal controls, which are put in place for the precise reason of decreasing risk. Furthermore, manual processes make it more difficult to trust financial reporting.
Failing to Keep up with the Competition
The simple fact is that automation is becoming ever more prevalent for finance departments everywhere. If you are not implementing automation for your company’s finance functions, you can be assured many of your competitors are. Not only will these competitors reap the benefits of automation, they are more likely to attract top talent for their finance teams — possibly from your team.
CFOs Need to Understand the Value of Workflow Automation
CFOs looking to reap the benefits of workflow automation need to understand what their finance teams stand to gain from implementation – as well as what they stand to lose from sticking with manual processes. Our Workflow Automation ROI Calculator can help you to see these benefits in concrete terms.