Finance & Accounting Automation: Key Benefits & Challenges

Automation has been the buzzword in the finance and accounting (F&A) sector for some time now. The pandemic has only further cemented the role of technology in shaping the future business scenario. In fact, according to a recent Forbes Insight survey, 90% of the respondents feel that automation is going to play a key role in defining the future success of their organization. Before we understand the benefits and challenges associated with intelligent automation, let’s first understand what this term means.

What Is Intelligent Automation?

According to IBM, Intelligent Automation (IA), also known as cognitive automation, is the use of automation technologies, such as artificial intelligence (AI), business process management (BPM), and robotic process automation (RPA), to streamline and scale decision-making across organizations. IA helps simplify processes, free up resources, and improve operational efficiencies. Basically, IA adds value to functions that are already considered ‘optimized’.

The Link Between Finance & Accounting and Intelligent Automation

Since the beginning of the COVID-19 pandemic, the F&A function has undergone a massive evolution after being forced to embrace digital technologies quickly. Automation, with benefits such as faster results, lower costs, and better accuracy, has been implemented across various F&A functions like invoicing and reconciliation among others in numerous organizations.

According to a Workday Adaptive Planning survey, over 40% of finance leaders say the biggest driver of automation within their organizations is the demand for faster, higher-quality insights from executives and operational stakeholders.

According to research from McKinsey, approximately 60% of finance activities can be fully (40%) or mostly (17%) automated with technologies available today. Nearly 26% of organizations believe that the primary reason for implementing automation within the finance organization is offering enhanced decision support to make their teams a more strategic part of the business, according to a global CFO study.

As these numbers suggest, the finance and accounting function is ready to embrace intelligent automation. However, what are the benefits and challenges associated with this?

Benefits of Intelligent Automation

Some of the benefits of intelligent automation include:

• Delivering bottom-line effectiveness: In the long run, automation can offer both outward-looking cost-effectiveness and competitiveness.
• Driving top-line value: IA gives the F&A function larger pools of data and frees up resources who were earlier focused on manual and repetitive data analysis tasks. IA enables F&A teams to both, monitor business performance and identify methods on how to drive process improvement.
• Enhancing and accelerating decision-making: With intelligent automation, enhanced business intelligence and visualization tools will automate reporting and analytics. This, in turn, helps F&A teams to better innovate and accelerate growth.
• Increasing capacity, productivity and accuracy: Automated systems are capable of working 24/7 while making minimal to no errors. With the help of a scalable enterprise automation solution, it’s possible to automate several use cases across the organization with central management.

• Enhancing employee satisfaction: Since IA takes care of manual and repetitive tasks, employees now have more time to focus on strategic and other value-add tasks. Furthermore, IA helps with improving job satisfaction and work-life balance, which in turn improves employee morale and efficiency.
• Improving customer satisfaction and loyalty: Accuracy leads to happy clients and vendors. Automation can enable better customer experience. This results in customer and vendor loyalty due to faster turnaround times and reduced errors.
• Decreasing risk and enhancing compliance: Automation improves security of data and offers better accuracy with the help of standardized processes, which in turn ensures better regulatory compliance.
• Improving innovation and competitive differentiation: With employees having more time to focus on innovation and strategic tasks, organizations will benefit from the agility and velocity offered by intelligent automation.

Related Case Study: QX leverages robotic process automation and cognitive solutions to automate the accounts payable function. Click here to read the case study.

 

Challenges of Intelligent Automation

While there are several benefits associated with IA, it’s equally important to take note of the challenges associated with it.

• Knowing where to begin: It can be difficult to figure out where to begin automating various F&A functions. Additionally, it might be challenging to immediately know how much IT support is required for adopting and implementing new technologies.
• Being open to experimentation: Digital tools and technologies are everchanging. Organizations cannot just stick to one tool forever. It’s important for businesses to be open to experimenting with various tools and solutions, and constantly making improvements and changes as newer, better versions are released.
• Upskilling existing employees: It’s not enough for organizations to adopt and implement new digital technologies. Staff must be equipped with the right skills needed to adopt and adapt to new technologies.
• Expensive investment: It can be a costly investment to adopt certain tools and technologies, however, in the long run, your organization can gain significant cost savings. It is equally important to develop robust performance indicators and measurement tools to monitor and track the output of these solutions. This will help you understand whether the investment is offering value or not.

• Misuse of data: Constant security procedures and improvements are necessary to ensure that organization data is not misused and does not land in the hands of the wrong people. Furthermore, there will be several regulatory and compliance requirements that you’ll need to follow.
• Implementation & Maintenance: If the RPA tool isn’t set up correctly in the first instance, you could be set up for failure. Furthermore, incorrect implementation can lead to inefficient processes, which could be costly in the long run. Additionally, it’s not just enough to implement a solution, you also need to maintain it. Furthermore, if your business function changes drastically, the existing RPA solution may no longer work well for your organization.

Related Blog: 7 things you must consider when automating your accounts payable function – read here.

 

Conclusion

There are significant benefits that your organization can gain from intelligent automation, such as a more comprehensive and real-time view of business performance, better ways of finance measurability, enhanced compliance with automated processing and reporting, and the ability to shift focus to improving customer experience. However, it’s important to keep in mind the challenges associated with implementing intelligent automation as well.

In the long run, businesses stand to significantly benefit from adopting, adapting, and maintaining intelligent automation tools built to aid finance and accounting functions.

If you’re considering transforming your finance and accounting function, then QX can help and support your F&A automation and transformation initiatives. Get personalised advice on how to transform your finance and accounting function from our experts today!

Originally published Nov 18, 2021 02:11:33, updated Apr 17 2024

Topics: Process automation