Many commentators believe we are already in the midst of a fourth industrial revolution, also known as Industry 4.0.
This new working environment blurs the lines between the physical and digital worlds, as well as between people and machines.
There are many converging technologies involved, including artificial intelligence (AI), 3D printing, genetic engineering, quantum computing, the Internet of Things (IoT) and robotics.
One of the key elements is automation and particularly smart automation. Automation is a general term for technology applications where human input is minimized.
This could involve programming an industrial robot to do repetitive mechanical tasks quicker and more efficiently than a human could do, or using robotic process automation
Smart or intelligent automation requires decisions to be made based on an understanding of the underlying data, workflow processes and options available.
This typically needs AI and machine learning systems underlying the processes.
This could apply to customer service chatbots, driverless cars or the increasingly prevalent personal assistants like Siri and Alexa that many of us have in our homes.
Many businesses are also using a combination of robotic process automation and smart automation technology to streamline and improve their existing financial processes.
For example, a feature like automated account payable software could potentially save a business hundreds of person-hours and many thousands of dollars simply by automating manual accounts payable processes and eliminating inefficient workflows.
Where should financial automation be deployed?
This is far from the only use for automation in financial processes, although it is a good example. Accounts receivable (AR) and accounts payable (AP) are two interlinked areas where traditional manual processes are highly inefficient and prone to error.
Any errors can result in delayed payments to vendors, impacting trust and ongoing business relationships in the process.
Delayed invoice clearances for employees can also lead to dissatisfied workers, while miscalculations can also influence short-term liquidity and cash flow.
Automated AP and AR software can easily take care of tasks like auto-generating invoices, sending due date reminders, processing payments, cross-checking invoices against purchase orders and much more.
Other financial processes that are perfect for automation include payroll and reconciliation. Paying employees accurately and in a timely fashion is an essential part of keeping a happy workforce and keeping your productivity on track.
It can become an unwieldy task as that workforce grows and any errors can cause dissatisfaction very quickly.
With the right software in place, it is easy to replace cumbersome manual practises, checking payroll data against timekeeping schedules and taking care of any necessary deductions or other adjustments.
Reconciliations, meanwhile, involve comparing two sets of records to check that all figures are correct and in agreement.
This obviously involves a lot of repetition but is also meticulous work and it is easy to end up with errors when relying on manual input – potentially requiring the entire process to be repeated.
This is the ideal situation for robotic process automation, which can make the comparison quickly and without the possibility for errors. This also allows you to carry out reconciliations as often as you like, helping to spot discrepancies that could indicate fraud or other issues.
The benefits of financial automation
Businesses of all shapes and sizes are increasingly adopting financial automation in areas such as these and they are reaping the benefit. The robotic process automation market has been predicted to reach nearly US$2 billion by 2025 and businesses are embracing the technology for good reason.
Some of the potential benefits of automating financial processes include:
- Increased efficiency
Automation tools can massively reduce inefficiency in many workflows and processes throughout your financial system.
This can free up person-hours for higher level or more creative tasks, rather than having employees constantly running through the same repetitive tasks.
This also brings with it a financial benefit, which can be substantial when the software is used throughout the organisation. You may find it, in fact, more than pays for itself very quickly.
- Reduction in errors
People are the biggest asset of any organization, but human error can be a problem. This is especially the case in the repetitive, mundane tasks already mentioned.
It can be easy to lose focus or concentration and any errors made can be costly in terms of time, efficiency, compliance and even reputation.
- Improved relationships
Nothing spoils customer or client relationships faster than unpaid bills, chaotic invoicing, and a lack of communication. Financial automation can take care of all these things, making sure that everything leaves when it should and making sure communications are timely and tailored.
- Accessibility
Manual processes may involve valuable information passing through multiple hands before being signed off or may hit a bottleneck at some point in the workflow. Automated digital processes can be accessed more easily, giving management and other stakeholders access to the information they need when they need it.
