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Why You Should Be Automating More of Your Financial Management

Automation is the original value proposition of computers, and 50 years later there still is a lot of low-hanging fruit when it comes to freeing up employee time with the help of automation. This is especially true when it comes to financial management.

While most businesses automate at least part of financial and accounting functions today, enterprise resource planning solutions (ERP) help businesses move beyond piecemeal financial management automation to end-to-end automation that saves time, reduces errors, and frees up personnel for higher-value functions such as strategy and the creation of more advanced key performance indicators (KPIs).


The Value of Comprehensive Financial Automation

Accenture, a consultancy, has calculated that roughly 80 percent of finance-related tasks can easily be automated with the right backend infrastructure, saving a company’s financial management employees an estimated 60 to 70 percent of their time.

Some of the other benefits to financial management automation include:

  • Up to a 50 percent reduction in operating costs.
  • A 10-30 percent reduction in days sales outstanding (DSO).
  • A 35-40 percent decrease in period close times.
  • A 25 percent improvement in financial report delivery times.
  • A 20-30 percent increase in cash collection.
  • Capital availability forecasting with accuracy between 85 and 95 percent.
  • A reduction of balance sheet issues to just 5 percent older than 60 days.
  • 100 percent control and compliance around financial management tasks.

And this is just a sample of the tangible benefits from robust financial management automation. The list of goes on.

Overall, financial automation that can be put in place affordably and relatively easily today with ERP solutions such as SAP S/4HANA Cloud Public Edition or SAP Business ByDesign that bring faster payment processing and accounting functions, improved accuracy, better financial compliance, and more sophisticated financial analysis.


Financial Functions Ripe for Automation

While most financial management functions can be automated today, businesses should be looking at a few areas in particular for quick gains in cost and time from financial automation.

Invoicing and accounts payable. Businesses can completely automate invoicing functions, reminders and payment tracking for accounts receivable with ERP. Similarly, ERP can fully automate accounts payable, verifying invoice validity, facilitating approvals and issuing payment after approval.

Bookkeeping. With the end-to-end visibility across all facets of the business and integration with third-party systems, ERP enables real-time, automated accounts reconciliation for books that are always accurate and up to date without manual data entry or receipt hunting.

Payroll. ERP can automate all payroll functions including hiring and termination packages, salary increases, incentive plans, insurance or benefit package changes, expense management and receipt collection, and of course issuance of payroll.

Tax compliance. Financial automation can calculate tax collection and payment requirements in real-time across multiple geographies and regulatory regimes. International operations particularly benefit from ERP’s ability to work with multiple currencies and tax rules simultaneously so the complexity of taxation across borders can be automated instead of an ongoing exercise in complexity.

Financial Analysis and Reporting. Perhaps the most subtle but impactful area for financial automation is financial analysis. AI-assisted automation within ERP can correlate financial data with real-time operational variables for significantly more sophisticated financial analysis and charting without the need for spreadsheets or a high degree of statistical and technical skill. Advanced KPIs can be developed and updated in real-time, and financial reporting can be fully automated completely with only the need for review and sign-off.


Get the Financial Automation You Need with ERP

ERP is end-to-end backend software that handles all areas of a company’s operations and centralizes data for easy automation and analysis. An ERP solution serves as the nerve-center for a business, and it is central for digital transformation and the advanced artificial intelligence use cases that are transforming business today.

Because of the cloud, ERP now is affordable and relatively easy for small and fast-growing businesses to roll out as well. A turnkey but full-features ERP solution such as SAP Business ByDesign can be rolled out in as little as 30 days, and functions can be added as a business grows so smaller or fast-growing businesses can use what they need and add more functionality and automation when they are ready for it.

ERP solutions such as Business ByDesign and S/4HANA Cloud Public Edition also make the creation of financial management automation easy by coming with predefined automations and best practices built in. So businesses can start with off-the-shelf financial management automation, then add custom or more complex financial automations as they grow.

We’ve helped businesses roll out more than 500 ERP solutions across a range of industries over the past 25 years as an SAP Gold Partner. To learn more about financial management automation and how ERP can help, or to get a better understanding of the process for rolling out an ERP solution at your business, contact one of our experienced ERP consultants at (801) 642-0123 or by writing us at info@nbs-us.com.

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