We’ve known for some time that automation and AI has the power to boost process efficiency. But finance has traditionally lagged behind in its adoption compared to other areas of the business.
All that changed in the past year as finance teams up and down the country realised their traditional ways of working couldn’t always keep up when the world went remote. Will it be the catalyst finance teams need to finally embrace what digitisation has to offer?
Digitising Finance Processes as a Practical Necessity
The rapid digitisation of finance processes in the past year demonstrates one of the benefits of automation – as a practical change that facilitates a new way of working.
There is no doubt that digitisation helps to address the difficulties of manual processes in remote and hybrid set ups. But digitisation can be so much more than a reactive move. It can also be a proactive one that delivers benefits to the entire business.
In a BDO report entitled, Covid-19 is accelerating the rise of the digital economy, the accountancy and business advisory firm sums up the difference digitised finance processes can make when it says: “The pandemic is a reality check for businesses that have been reluctant to embrace digital transformation and now find themselves woefully unprepared. On the other hand, businesses that had not only developed digital strategies but executed on them prior to the pandemic are now in a position to leapfrog their less nimble competitors.”
Because ultimately, digitised finance systems are tools that enable the finance function to become a value adding department – not a cost centre.
Digitising Finance Processes as a Value Creation Exercise
The traditional view of a finance department is that its principle role is about data entry and processing. Yet it’s the reporting where finance can add real value. And all-too-often in a traditional, manual set up, capturing the data takes so long that reporting has to be an after-thought. Automation takes away the manual data entry and processing, freeing the finance team to deliver the reporting insights that really matter.
Not only that, it can get access to more immediate insight too. BDO comments: “The finance function of the future won’t be one that places a priority on looking backwards at quarterly or yearly financial reports. The adoption of real-time connectivity and cloud-powered tools have made it possible to monitor and analyse activities in nearly all parts of your business both on the move and as soon as they happen.” This real time insight is essential, whether you want to prepare for growth or need to preserve cash to address liabilities.
The finance function touches every part of a business, so digitising finance processes helps to transform all areas of a business. When posting expenses or approving an invoice is straightforward and streamlined, employees can spend more time doing the job they’re paid for. It’s a shift that improves the entire culture of a business because employees understand their employer is enabling them to focus on the tasks that matter.
Managing the Shift to Digital Finance Processes
If you’re planning a shift to digital in the coming months, there are a few key points to bear in mind.
Firstly, it needn’t be as painful as you might imagine. As BDO says: “Not all that long ago, automating accounting processes generally required building your own comprehensive software systems and applications — a painstaking task that was cost prohibitive for all but the best-resourced companies. But today’s technology marketplace offers the potential for a wide array of relatively inexpensive tools and apps that can integrate or ‘bolt on’ to either legacy or cloud accounting systems.”
Outsourced expertise can help you in the process, giving you best practice information and practical support as you start the journey.
Your first step should be to think strategically. Where is the business going? How can the finance team best support this? And how can technology support the finance team so the finance team can support the business?
Remember too the importance of communication in change management. Engage early with all stakeholders across the business and engage often throughout the process. With the entire business on board you’ll get valuable information and – more importantly – the buy-in you need.
But perhaps most importantly, remember that digitisation isn’t about reducing headcount. It’s about freeing up employees’ time so they can focus on adding value to the business.
For Further Insights
For more on this subject, listen back to my conversation with Ian McBane, Partner, Business Services & Outsourcing at BDO in our webinar Digitising Finance Processes. Rethinking Finance.