7 Finance Processes That Should Be Automated ASAP
By Toni Buffa Posted December 20, 2021
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When a business switches from manual processes to automation for its finance operations, one difficulty is knowing where to start. Theoretically, any financial process that can be broken down into a series of discrete tasks could be automated. But with so many approaches to choose from within finance operations, where do we begin?
To help answer this question, we list here 7 finance processes where automation could reap immediate benefits.
1. Capital Expenditure Requests
Capital expenditure (CapEx) requests are one of the main facets of finance operations that can be bogged down by manual processes. Manual spreadsheets are bound to lead to errors. When multiple layers of approval are required, bottlenecks in the workflow will repeatedly form. And suppose you need an overview of your company’s overall CapEx request workflow. In that case, manual operations do not easily provide this perspective.
With an automated CapEx request process, error-prone spreadsheets are eliminated. Requests can be automatically routed to the correct approver or even multiple approvers, whether those approval workflows are sequential or parallel. Requests that meet specific criteria, such as a certain dollar amount, can be elevated to higher-level approvers. And approval can be provided by non-traditional means, such as mobile phone or email.
Visibility and reporting are other key benefits of CapEx automation. The system can provide real-time status updates on any particular CapEx request. Audit trails can be automatically generated for any request, allowing for easier regulatory compliance and enforcement of internal protocols. Automated reporting can help identify bottlenecks and allow for long-term planning and improvement.
2. Invoice Approvals
Invoice approvals are another area of finance operations where manual processes can gum up the works. Invoices can be easily lost and misplaced when relying on paper and email forms. Payment requests are often missing essential information, leading to time-consuming follow-ups. And lengthy approval cycle times often result in late payments and cash flow issues.
An automated invoice approval system will speed up every element of this process. Invoices can be submitted at the click of a button, and the system can prompt for all necessary information. As with CapEx requests, invoice approval requests can be automatically routed to the correct approver or series of approvers. Moreover, the approvers can also perform their functions at the click of a button by either approving, rejecting, or sending the request back for more information.
3. Employee Reimbursement Requests
Payment of reimbursable expenses incurred by employees is yet another facet of finance operations that can be streamlined. But here, the burden of an inefficient manual process does not fall on the shoulders of the finance team alone. Instead, the employees submitting the expenses must also deal with the administrative hassle and potential frustration of delayed reimbursement.
With automation in place, the traditional paper-based expense report can become a thing of the past. The result? Payments are processed with greater speed, with a less administrative burden on everyone involved --- employees submitting expenses, approvers, and finance teams.
4. New Vendor Requests
A manual process can be particularly time-consuming when any new vendor is vetted for approval to work with the company. The steps here can be relatively demanding, including filling out contracts, checking qualifications and licensing background checks, and more. Any mistakes or other reasons for delay can result in the company failing to receive vital services or supplies when they are needed.
An automated vendor contract system can allow vendors to initiate contracts by completing online forms efficiently. If the vendor request requires more information, it can be bounced back to the vendor through the portal. And accompanying paperwork is readily available on the system, obviating the need for follow-up phone calls or emails.
5. Travel and Entertainment Approvals
Managing expenses for travel and entertainment is critical to most companies’ financial wellbeing. Suppose travel expenses are not pre-approved in time. In that case, important events or business development activities may need to be canceled or delayed. At the same time, the company wants to control its spending, minimize errors, and guard against potential fraud.
With manual travel and entertainment approvals, errors are common, and the process is tedious and time-consuming for employees. When requests can be made through multiple channels (physical forms in an inbox, email, fax, etc.), there is more room for inconsistent formats and missed requests. And the burden on accounting and finance teams can be immense due to the high volume of these requests.
Automated systems can provide a centralized portal to ensure consistency, streamline the request and approval process, and minimize errors and fraud risk. When approvals are obtained within hours instead of days or minutes, critical delays are avoided. Finally, every single request can be tracked and managed on the portal. At the same time, employees, management, and finance teams all sidestep the administrative headaches.
6. Journal Entries
Journal entries are one of the essential elements of a company’s accounting. But with manual journal entries, there are opportunities for errors at every step. Journal entries are manually keyed, then they need to be manually reviewed. The system relies on emails and printed-out hard copies. Workflow bottlenecks lead to rushed approvals and an even higher chance of mistakes. Add in the lack of real-time transparency and the potential for fraud, and manual journal entries become less and less desirable.
An automated journal entry process solves these problems. Entry creations are automated, and approvals are streamlined, reducing errors and drastically increasing efficiency. The system can allow for real-time visibility, and there is less risk of fraud.
7. Financial Reporting
Automated financial reporting allows a company to generate reports and minimize errors quickly. Instead of searching through paper trails and multiple systems for data, your finance team can rely on the automated system to pull together the necessary data from various sources. The report approval process is streamlined. Additional benefits are increased transparency and easily generated audit trails.
Implement Automation Software for Your Top Finance Processes
The list above is only a partial one since automation can revolutionize many different finance processes. No matter which finance processes you choose to automate, be sure to implement automation software that confers the benefits discussed here. In addition, make sure your software can handle as many different finance processes as possible so that over time you can expand your finance team’s shift toward automation and the digital future.
See these processes in Integrify, with workflow process examples and downloadable files to integrate in your Integrify system.
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