Technology has been transforming the workplace for decades.
Almost every business has been integrating advanced solutions to improve operations, overcome challenges, and provide better experiences for their partners, including vendors and suppliers. However, one sector is still lagging in its move toward greater digital transformation, and that’s financial services. Even with all the technology available, artificial intelligence, machine learning, and automation in the financial sector are more of an exception than a rule.
Switching from legacy systems to newer technologies can feel like a risk to security and compliance, especially when many organizations are still uncertain about how to prepare for the technological implementation process. Besides, technologies are emerging and evolving rapidly, so it can be daunting to decide exactly where to start.
With most finance departments being asked to do more with fewer resources, accounts payable is one area ripe for improvements. Almost all the mundane, repetitive tasks related to accounts payable can be automated with the right AP software. Invoice management, purchase order matching, payment reconciliation, vendor management, and more can all move to finance automation technology.
In fact, 91% of accountants believe that accounting technology has improved their productivity — which is just one component of the finance function. When it comes to automation in general, 44% of employees felt the technology saved them time. Another 43% said automation helped them finish tasks at a faster rate. If your company were to move to a cloud accounting solution, chances are that you could experience what other businesses experience: a 15% year-over-year increase in revenue.
The Impact of Automation Technology on Finance
Finance automation can be a precursor to substantial change within the finance function, yielding many positive results. The following are just a few of the greatest benefits to operations:
1. Increased efficiency and accuracy.
Using finance automation to perform manual, repetitive tasks is a huge time-saver. There’s simply no way around it. Processes that once took days—or sometimes weeks—can be done almost instantaneously. And, with fewer chefs in the kitchen, it all but eliminates the potential for human error. Questions about the accuracy of the numbers are gone, freeing up time for the finance function to work on more value-adding activities.
2. Higher levels of strategic planning.
By removing mundane, time-consuming manual processes from the finance function, finance teams can stretch out and become more strategic parts of their companies’ financial decisions. Cost cutting, exploring money-saving strategies, and researching new revenue streams are just a few of the verticals that finance can now focus on and propel forward with automation solutions.
3. Better quality service.
The right finance automation tool can provide a self-service portal, allowing vendors to onboard themselves and simplifying the collection of payment information—a time-consuming process often prone to errors. More importantly, you give vendors the ability to manage the timing of payments, choose preferred payment methods, and check in on payment statuses.
4. Improved vendor relations.
Finance process automation allows teams to “set and forget” even time-sensitive responsibilities, so little worry remains around whether vendors or suppliers get paid on time. Automation technology does all the heavy lifting for you and provides vendors and suppliers with a clear view of payment statuses and purchase orders. Better yet, vendors can opt in for early payment discount programs, resulting in decreased spend and better relations.
5. Timely risk mitigation.
Finance automation can do more than take over back-office tasks. Functionalities such as automated fraud detection make it possible to quickly scan data, documents, and transactions for signs of inconsistencies. Should an issue be found, the technology pauses the payment and alerts the finance team for further investigation.
Fraud detection automation can also reduce the number of false positives, minimizing the chances of incorrectly flagging legitimate transactions and frustrating vendors. All in all, the technology cuts overhead costs and improves the supplier payment experience.
Given the uncertain financial landscape we’re currently in, organizations need to explore all the possible ways to improve operations. Finance automation is just one of them. Implementing automation technology into the finance function offers a business’s finance leader and their team the luxury of focusing more on strategy than on processes and deadlines, which can make a big difference to not only the department’s efficacy, but also the company’s bottom line.
Paul Henderson is the global controller at Tipalti, a payment automation software that helps businesses manage their entire supplier payments operations by streamlining all phases of the AP and payment management workflow in one holistic cloud platform. Paul has decades of experience in the financial industry across a variety of companies, and prior to Tipalti, he served as vice president and controller at ForgeRock.