Finance Automation: Where Compliance Meets Efficiency

By Toni Buffa Posted June 15, 2022

 

Get it done fast. But get it done right.

These are the two competing goals within finance operations. Undoubtedly, speed and efficiency are essential for finance teams. But even more critical is compliance with regulations and the company’s internal controls to avoid mistakes that will hurt the company’s bottom line. So how can the finance department do both?

This is where finance automation comes to the rescue. By automating workflows in finance operations, finance teams will learn there is no need for a tradeoff between efficiency and compliance — both can be accomplished.

Efficiency Through Automation in Finance Operations

There is no getting around a simple fact — manual processes are slow and cumbersome. For finance teams trying to maximize efficiency, manual workflows have too many built-in weaknesses to boost their efforts.

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The inefficiency of Manual Workflows

Consider the example of onboarding new vendors to work with the company. With manual workflows in place, the finance department must complete the vendor’s contract, statement of work, and other necessary documents. Approvals must be sought out from within the company, often from multiple people or departments. If any requested information is missing, this means more follow-up communications to resolve the issue.

 

If these steps are taken with paper forms, phone and fax, there are innumerable ways for the process to be derailed or slowed down by misplaced documents or communications. Even with “higher level” tech — emails, computer spreadsheets, and computerized forms — the workflow can still be bogged down without automation in place.

 

Now extend this example out to other areas of finance operations, such as accounts payable, journal entries, and capital expenditures. These areas require inputting information, requests and approvals, and back-and-forth communications. Done manually, these processes are time-consuming and challenging to speed up.

Finance Automation Increases Efficiency

When a finance team implements automated workflows, its processes can transform from clunky to streamlined. Automation software typically includes a central dashboard where all requests can be initiated and approvals made. With automated forms, there is much less chance of missing information since the system will prompt for any required inputs. And the request-and-approval workflow can also be automated so that a request can be automatically sent to the correct approvers or series of approvers.

Each internal transaction will take less time with automation. The time spent double-checking calculations can be drastically reduced if not eliminated. And no more waiting days or weeks for the key approval from the CFO, who happens to be out of the office traveling when you need her. In an automated system, simple actions such as approvals can often be accomplished with a click of a button, even from a mobile phone. 

Compliance Boosted by Automated Workflows

Automation also has an advantage over manual processes in ensuring compliance in finance operations. This means both regulatory compliance and compliance with the company’s internal controls.

Regulatory Compliance

Finance is a highly regulated area, so one of the finance team’s main duties is to ensure regulatory compliance. Not only does the finance department need to achieve ongoing compliance, it needs to be prepared for regulatory audits when they come. 

One key benefit of finance automation is the visibility it provides into finance workflows. Manual operations require a lot of digging to find out the status of any particular workflow - specifically, digging through paper forms, emails and spreadsheets to get answers. But an automated system allows continuous monitoring from a single unified platform. This provides the opportunity to spot compliance pitfalls and take corrective action when necessary.

Audit trails are another advantage of automation from the regulatory compliance perspective. Automated systems can quickly generate audit trails that show the history of any workflow, all the way down to date-and-time stamps. This makes it simple for the finance team to issue reports in response to external audits. In addition, internal audits become fast and simple, making it easier for Finance to ensure ongoing regulatory compliance.

Compliance with Internal Controls

The second prong of compliance for finance operations is compliance with internal controls. Internal controls serve a key function as the finance team’s internal policies and procedures intended to protect against loss or damage. These include the specific information required for requests, approval requirements, and segregation of duties.

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Internal controls are easier to enforce with an automated system that automatically follows the policies. Manual systems allow for the possibility of necessary information being omitted, approval workflows being inadvertently bypassed, and other irregularities. Finance automation, on the other hand, forces users to comply with internal controls. Automated forms and automated workflow routing ensure the finance team’s risk-management framework is being followed.

Synergistic Effects of Compliance and Efficiency

Beyond the benefits listed above, compliance and efficiency also have synergistic effects with finance automation. Specifically, compliance with regulations and internal controls will increase efficiency, while efficiency will further help with compliance. 

To see why, consider how much manual workflows slow down the compliance process. With so many opportunities for human error, manual elements such as paper forms and computer spreadsheets will inevitably contain mistakes. This means the workflows require an additional layer of oversight and double-checking — along with a temptation to take shortcuts when time is short. Automation removes this temptation by minimizing or eliminating human error from the process, thus allowing for easier enforcement of internal controls and regulatory compliance.

Better compliance will help with efficiency by reducing the time and aggravation caused by non-compliance. Dealing with regulatory fines and implementing corrective action are burdensome activities for finance teams. The low-effort compliance possible with automation will allow the finance department to focus on big-picture activities that keep finance operations running smoothly.

Implement Finance Automation to Maximize Your Team’s Compliance and Efficiency

Finance automation serves as proof that there does not need to be a tradeoff between efficiency and compliance efforts in finance operations. On the contrary, the right workflow automation software can ensure your finance team is maximizing both efficiency and compliance like never before. Schedule a demo and see how Integrify can help your organization maximize efficiency and compliance!

Toni Buffa

Toni is a member of the Integrify marketing team and writes for the Integrify blog. Toni lives in Colorado and loves animals of all stripes.

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