10 Ways Financial Automation Transforms Businesses

It’s no secret that automation is becoming an ever-important tool for businesses and their teams. Although the conversation is generally dominated by marketing and sales automation, some clear use cases are emerging for financial automation, making it a worthwhile exploration.

As companies expand and teams grow, manually keeping track of transactions, payments, and expenses becomes more challenging. Having a financial automation workflow can help alleviate many of these problems, enabling finance departments to dedicate more resources towards more pressing work.

If you think about the day-to-day work that financial departments are doing, this takes on more importance. Running through a typical to-do list for someone working in the finance department, it’s clear that automation can cross many of those things off in a fraction of the time it might take. It gives team members more time to focus on what’s needed without getting bogged down in administrative and manual processes.

This is the main reason why financial automation is becoming a fast priority for companies. It’s not just that it can save time (although that is a pretty big bonus!), but it’s also because it’s versatile enough that teams can apply it across various business functions.

Here are just a few areas where financial automation plays a massive role for departments.

1. Expenses

One of the most challenging functions for finance departments is expense tracking and reconciliation. Finding receipts, matching them to transactions, and general expense tracking can be a time-consuming process.

Not only does it add to the administrative burden, but it also makes it difficult when trying to allocate revenue accordingly. Trying to budget while tracking and reconciling expenses becomes challenging and leads to more inaccuracies in future calculations.

Financial automation offers freedom from many of these time-consuming functions and removes much of the manual work that goes into it. Instead of chasing employees for receipts and missing transactions, the entire expensing process can become more streamlined.

For example, teams can use financial automation to create a seamless documentation process for expenses, allowing employees to add receipts to their requests. On-demand payments become easier to process and handle especially if teams can customize the workflow based on business needs. It also reduces the amount of time needed for bookkeeping and reconciliation overall while still giving team members complete oversight and control.

2. Payments

Between managing expenses, as discussed above, and outgoing payments, there are many ways that financial automation can ease the process. Finance departments often get stuck trying to track recurring payments, dormant accounts and streamline finances for the business. Subscriptions and payments are a significant part of day-to-day work that financial automation can reduce.

There are a few ways to do this, both from a granular level and a broader perspective. By looking at transactions and payments granularly, a financial automation solution can collect digital receipts for recurring payments such as SaaS subscriptions and match them to the correct form of payment. These receipts can be automatically imported and then routed to the relevant transaction quickly and hassle-free. That’s at least one item off the to-do list that can be automated!

On a broader level, financial automation brings a level of control that is otherwise difficult to establish. Because there is a lot of room to customize, departments have more freedom in creating automated notifications for transactions and payment reminders and what revenue is being spent on. Going back to the earlier point, combined with the expense intelligence financial automation provides, departments are better equipped for bookkeeping and financial reporting.

3. Financial data

Another essential way financial automation helps businesses is through the sheer amount of data it provides. Rather than running manual reports and piece together unclear financial situations, departments have intelligence across spending and expenses like never before. This is a significant benefit for simple business functions and more complex issues that may arise. 

Financial automation solutions can be incredibly useful for identifying duplicate payments, zombie subscriptions, and tracking employee expenses and spending.  This form of payment intelligence helps companies uncover potential ways to save without exposing the business to failed payment risks.

Moreover, this type of solution is constantly collecting data, making it a crucial tool for finance teams looking to understand revenue streams and spending better. Through financial automation, companies can dive deep into spending patterns, suspicious transactions and look for ways to consolidate spending.

Through this type of financial data, companies have viable insight into spending and how to reduce it – not just in the short-term but also for long-term gain. Financial automation can spot gaps and areas of improvement far faster, making it an efficient solution that yields tangible results.

4. Increased efficiency

Increased efficiency is a crucial factor when automating business processes because more can be accomplished with fewer resources. Automation can eliminate manual, time-consuming, error-prone tasks and replace them with faster processing times, thereby removing bottlenecks in workflows.

Employees have more time to refocus on higher-value tasks, such as analyzing data and making strategic decisions. This can help a business scale because improved productivity means it’s better able to meet consumer demands to deliver products and services faster. This in turn can lead to increased customer satisfaction and improved customer retention.

Some low-hanging fruit in terms of automation exists in most businesses. Data from sources such as invoices or receipts can be inputted automatically while automated Customer Resource Management (CRM) tools help improve marketing efficiency by automating tasks such as email marketing campaigns or social media posts.

Companies can keep lower inventory levels by setting accurate reordering or restocking points when units fall below certain thresholds. Other ERP automations manage financial processes more efficiently by automating tasks such as accounts payable and receivable, invoicing, and payroll. Employee onboarding processes are automating tasks such as administrative tasks, training modules, and assigning tasks to new hires during onboarding.

5. Improved accuracy

Improved data accuracy means the data within the company’s system is more reliable and trustworthy, enabling better decision-making and more efficient operations.

Improved data accuracy can be achieved through various methods, including implementing data validation rules, automating manual data entry processes, and conducting regular data quality checks and audits. Having “data wranglers” in charge of key data can be a high priority when ERP systems go awry.

Here are some concrete ways automation can help to improve data accuracy within any business setting:

1. Automating data entry processes can reduce errors and inconsistencies. Using optical character recognition (OCR) technology to scan and extract data from documents can eliminate manual data entry errors.
2. Implementing data validation rules can ensure data meets certain validation criteria. Setting up validation rules for email addresses can guarantee that only valid email addresses are entered into the system, leading to better security and lower phishing attempts.
3. Regular data quality checks and audits can identify and correct errors and inconsistencies.
4. Data profiling tools can categorize and analyze patterns and anomalies in data, identifying data quality issues and improving data accuracy.
5. Data cleansing tools can identify and correct errors and inconsistencies in data. This can include removing duplicates, correcting spelling errors, and standardizing data formats.
6. Providing training and education to employees to use automation tools correctly.

6. Greater visibility

Automated data provides greater visibility because it allows businesses to collect and analyze large amounts of data in real-time with data analytics tools and data visualization tools. This data can be used to gain insights into various aspects of a business, including customer behavior, supply chain operations, and financial performance.

With automated data, businesses can easily track and monitor key performance indicators (KPIs) and identify trends and patterns that may be difficult to see with manual data collection methods. It’s also easier to share any information and collaborate between shareholders and departments.

In addition to improving decision-making, automated data can also help businesses identify and address issues more quickly. For example, if a business notices a decline in sales or customer satisfaction, it can quickly pinpoint the root cause and take corrective action. Overall, automated data is important because it provides businesses with a more accurate and complete picture of their operations, which can lead to improved performance and competitiveness in the marketplace.

7. Better compliance

Manually ensuring that a company complies with all the applicable laws, regulations, and standards relevant to its industry and operations can be overwhelming. Compliance can include financial reporting requirements, data privacy regulations, environmental regulations, and health and safety standards.

Technology and ERP systems can be used to automatically monitor compliance in real-time, allowing businesses to identify compliance risks and take corrective action quickly. This can involve using software to track compliance data, as well as implementing automated compliance monitoring and reporting tools.

Compliance is important because failure to comply with regulations can result in legal and financial consequences, including fines, penalties, and legal action. Compliance also helps to promote transparency, accountability, and ethical business practices.

8. Enhanced customer experience

Enhancing customers’ experience will increase their loyalty. If customers have a positive experience, they’re more likely to return, make repeat purchases, and recommend the business to others. What’s more, exceptional customer experience can differentiate a business from competitors and help it gain a competitive advantage.

Automation can help a business to improve its customer service by implementing technologies such as chatbots, automated email responses, or self-service portals to streamline customer interactions and match customers with more qualified staff members. A business can also automatically gather and analyze feedback through surveys or forms to find out what their customers’ opinions, preferences, and pain points are. This means time and effort can be put into implementing changes and improvements, instead of allocating most of a business’s resources to getting the data in the first place.

9. Reduced risk

Businesses face various risks every day, so while they cannot be avoided entirely, they can be reduced. By continuously monitoring and evaluating risks, businesses can make sure their risk management strategies are effective. This can involve regularly reviewing internal controls, assessing compliance with laws and regulations, and analyzing data for potential risks. This way, new potential risks can be identified and businesses can take proactive steps to mitigate them before they become bigger problems.

Automation is ideally suited to make monitoring and evaluation processes easier by removing manual elements and reducing human errors.

Broadly, reduced risk can improve a business’s financial stability, safeguard its long-term viability, and improve its ability to weather economic downturns. Reduced risk can also improve compliance with legal and regulatory requirements as well as overall efficiency.

10. Increased competitiveness

Considering the points and benefits of automation discussed so far, it’s simple to understand why automation increases a business’s competitiveness over those that don’t implement it.

Automation can increase efficiency and productivity, make sure resources are distributed more equally, and let businesses respond to risks and problems as well as identify and seize opportunities faster. Financial automation specifically can help a business improve communication, reduce human errors, provide better and faster customer support, and reduce various financial risks, including fraud.

Finances are the core of any business and automation can help make sure this core remains stable, thereby giving a business an inherent advantage over its competitors.

Unlock the power of financial automation

Ultimately, financial automation is an investment into the future. It isn’t something exclusive to large corporations and can be applied to small and medium businesses. As more companies move towards this trend, capitalizing early on is one of the best ways to gain a competitive advantage.

Because with a financial automation solution, you start seeing results quickly. The data and intelligence it yields can help with data-driven decision-making that helps companies save money and gain more efficiency across financial functions.

Financial automation gives companies and their teams the freedom to scale operations and grow faster without losing sight of the bottom line. With the right systems in place, companies can achieve an automated workflow for finances that allow for better oversight and control.

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Mesh Content Team