Guide to Finance Automation By Jonah Balfour February 7, 2023 Finance teams play a central role in helping businesses be competitive, while maintaining their financial stability. They carry the responsibility of managing the company’s financial accounts, controlling spending and expenses, and also helping to plan for future growth and development. Alongside their more strategic role, finance teams are also required to perform tasks that frequently require repetitive or manual work, such as receipt collection and matching, employee reimbursement, and closing the books at the end of the month. Fortunately, new tools and platforms have managed to help finance not only more successfully manage these tasks, but also to automate them. Automation delivers multiple advantages to finance teams, chief among them significant time savings. Beyond that, automation helps finance managers boost productivity, improve the accuracy of their financial reports, and gain an overall tighter grasp on the company’s financial activity. This guide will help you understand finance automation and what it means for your business: Contents hide What is finance automation? Finance Automation Examples Benefits of Finance Automation Wider Benefits to the Company Steps to Setting Up Finance Automation What Challenges to Expect Key Points to Remember What is finance automation? At its core, finance automation is about removing the workload from the finance team and handing it off to a software platform. Until now, finance teams have relied on more traditional accounting software or often on spreadsheets and other tools to help them manage accounting and other tasks. However, these digital tools have required intensive manual effort, repetition, and date entry. This is a deeply inefficient way to work, and leads to inaccuracies in financial tracking and reporting, and loss of productivity as it bogs down the finance teams bogged in more menial tasks. Finance managers dread having to chase after employees for receipts and other information, or spending time reviewing credit card statements, or matching data to printed invoices. The problem is that much of the information the finance team needs is located in disparate systems, in different formats, without any unifying structure. New platforms, including modern ERPs, spend management platforms, and expense or travel reimbursement platforms, offer finance teams multiple ways to automate many of the workflows that have until now required manual effort. They do so, by bringing all the information finance teams need into online platforms as well as providing tight control over important areas such as spending, T&E, or accounts payable. For example, with spend management, all of the company’s expenses can be handled by a single platform. All spending data exists online, and can be easily synced with other systems, making it far more accurate and significantly reducing time spent reconciling expenses at the end of the month. Below, we’ll provide a deeper exploration of finance automation through detailed examples. Finance Automation Examples Receipt collection matching Collecting receipts from employees is challenging enough, but it becomes even more cumbersome when each receipt needs to be matched to the correct transaction. However, with automation tools, these processes can be automated. Receipts can be automatically collected via email or other platforms, and then scanned with OCR (optical character recognition) for relevant details such as the amount and date. This information is then automatically matched to the corresponding transaction in the platform. AP Automation Managing invoices and ensuring that they are paid in a timely fashion can place significant demands on finance teams. However, automation means that invoices can be processed by the platform and payments can be integrated into existing platforms ensuring a more streamlined solution. ERP Integration One of the most important platforms for any finance team is its ERP, used to manage all of its finances. Automation platforms will integrate with the company’s ERP and can automatically sync payment for other information they collect. Other App Integrations In addition to your company’s ERP, new solutions can integrate with other apps and services your company uses and automate other workflows. For instance, integration with Human Resource Information Systems (HRIS) can allow your company to automatically issue payment cards or assign budgets to new employees or members of specific teams. Policy Compliance It’s important for finance teams to make sure that company spending is inline with the policies they set. Automation allows your team to integrate policies directly into the payment methods themselves, ensuring compliance. Automatic Workflows There are some actions that your finance team always takes in response to certain criteria. For example, if a team or department requests a budget above a certain amount, it might require the direct approval of the CEO, CFO, or other manager. Automation platforms can streamline and automate that process, surfacing requests to the right people. Payment approvals Employees need to spend money on tools and services to be productive. When they request a budget for a specific service, the time it takes for that to be approved can prevent them from accomplishing their goals. Automating this process and allowing employees to make purchases within pre-set limits with streamline things for everyone. Communication with employees Currently, communication between finance teams and employees might require some kind of form or less formal communication via email or other platforms. Finance automation can streamline this and allow for notifications or reminders to be automatically issued when employees need to take action such as approving a payment or providing a receipt. Benefits of Finance Automation As previously stated, the principal benefit of finance automation is the time savings it can provide your team. Of course, time saved is no laughing matter – especially considering that time equals money. However, automation can deliver additional benefits alongside time savings. Cost savings Automation can also help your business cut down on costs by identifying wasteful or redundant spending. In addition, finance automation platforms can also identify more affordable alternative solutions or providers and suggest them to relevant managers. Accuracy of financial statements This is one of the most critical requirements for finance teams, ensuring that the company’s books are accurate and up-to-date. Automation is a boon in this regard, as it can automatically provide the necessary information and match it to transactions or other activities. Real-time overview All too often, finance teams are acting on information that takes time to compile and may already be out of date by the time they can act on it. Automation allows for finance managers to take steps based on a real-time picture of the company’s financials. Visibility When you move more and more of your finances into automated and online platforms, it sheds new light on those finances and increases your team’s visibility into your expenses. You can see where your company is spending significant resources, if there are redundant or unnecessary expenses, and also where there are opportunities for growth. Strategic focus Anytime you free up your team from time consuming tasks, it allows them to turn their focus to more strategic tasks and big picture thinking. Focusing on the details of today is important, but in turbulent economic times making preparations for the future is more important than ever. Wider Benefits to the Company Beyond the finance team, bringing automation into your finance workflows will accrue benefits across your business. Productivity In tough times, every company needs to find ways to do more with less – to be more productive with the resources at hand. Automation can unlock productivity gains across the company with both time and resources being re-focused on core tasks and responsibilities rather than the minutiae of finance tasks. Improved insights As mentioned above, finance automation can significantly improve visibility in your company’s financial performance. This visibility can help every part of your company, every department, gain a clearer understanding of their performance, how close they are to meeting KPIs, and where they can be more efficient. Faster approvals Every employee wants to have their spending requests approved as quickly as possible.Waiting on approval for an important tool or service can prevent team members from accomplishing their tasks. Automating the process will allow everyone to achieve more. Less friction for employees Improving the everyday experience for employees is an important goal. Automation can help remove points of friction between the finance team and employees and allow everyone to focus on their specific roles. Steps to Setting Up Finance Automation So you’re ready to get started automating your finances. What are your first steps. Research Choosing one or more new platforms to automate your finances requires a deep understanding of what the different capabilities of those platforms are. Dedicate an employee or a team to researching the different solutions available to see which is best suited for your needs. Analyze your company’s pain points Look at the specific pain points your business is facing and looking for solutions that are tailored to those problems. Work with the entirety of your finance team to evaluate current workflows and develop an understanding of how they will be impacted by new solutions. Test the software If possible, test the new software on a trial basis to see how it integrates with your other tools and workflows. Once you’ve selected a solution, continue to evaluate it as you implement it and look for areas that require special attention. Training Once you have selected the right solutions, make sure you also develop a process to train the employees of your organization how to take advantage of them. Work across departments and include managers in the process to make sure every employee that can interact with a new system is able to do so. Evaluate your current tools Then take a close look at the current platforms you are using. Which ones can be replaced, and which can be supplemented with other solutions. Understanding how new solutions will integrate with your existing tech stack is critical. Work with other teams The next step is working with the wider organization – managers and team leaders from all the different departments of your business. It’s likely that any change the finance team makes can have significant impacts on processes that affect those teams as well. So it’s important to gain feedback from them and secure their buy-in to implementing any change. What Challenges to Expect While it offers numerous benefits, implementing any serious change to your finance workflow can present serious challenges. The first amongst these is the difficulties that come with adopting any new set of tools or technologies. Every company has a certain amount of legacy technology, and it can be daunting to replace those platforms. Another critical question is what is the immediate cost of making any change. While finance automation can lower costs in the long run, adding new systems can incur immediate expenses, either as a result of acquiring those platforms or because of lost time needed to onboard them. This shouldn’t deter you from adopting new technologies, but certainly needs to be a factor. There will also be new security risks and requirements involved as financial information is moved into new, online platforms. So make sure to review those risks as well any potential regulatory hurdles involved. Key Points to Remember Finance automation can deliver significant benefits to your company. It can not only help you save time and money, but also reduce the burden of constant manual tasks, so your finance team can focus on big-picture strategic work. Automation is also a boon to the accuracy of your financial reporting, ensuring you have a clear picture of your company’s financial health. Productivity gains achieved through automation can help your company navigate challenging economic times and drive new growth. Various solutions exist that can help you tackle different pieces of the finance puzzle. Work to understand the challenges your company faces, as well as what challenges you will encounter as you integrate new solutions. If you’d like to find out more about how Mesh can help you automate your finances, sign up for a demo today. Get the latest blogs from Mesh by subscribing to our newsletter Manage Your Payments With Full Control & Visibility Get Started Jonah Balfour Jonah Balfour is a Content Manager at Mesh Payments. He has experience creating content for multiple tech companies, and previous experience managing PR campaigns for emerging startups. Originally from Los Angeles, Jonah chose to leave the ample sunshine of Southern California to study at the University of Wisconsin. He is an avid fan of both Star Wars and Star Trek, and spends most of his time chasing after his two young daughters.