6 Misconceptions About Finance and Automation
Now is the time to debunk the old age misconceptions around the corporate finance function.
In truth, people who work in corporate finance function aren’t boring people, they are the ones who are excited about what some may consider boring “stuff.” Why is this? Because boring “stuff” is the bedrock for any company to be successful. It’s the lifeline of the business.
Take one financial executive based in Atlanta. He lives and breathes finance, but his passion is triathlons. He spent day and night working on financial planning, manually inputting and reviewing financial data, checking audits, monitoring vendors. While he loved doing it, it did take up the majority of his time and he couldn’t focus on his other passions. After implementing financial automation to reduce the time he spent on manual tasks and increase his speed and productivity, he had enough time to both love his job and become a triathlete. Not so boring now!
While data input may not be exciting, the rise of automation in finance that can potentially make way for people to pursue their passions (outside of finance) is something that can get anyone excited.
Let’s dive into some other major misconceptions around finance.
Misconception #1: All finance teams are different and have unique needs.
Truth: All finance teams face similar challenges and have similar processes that have overlapping requirements and needs.
While a finance team at a large technology company may think that the challenges they face on a daily basis are solely unique to their own organization, more often than not, they are actually facing similar challenges to other software companies of the same stage. When a company reaches a certain stage — whether that is employee base, revenue, number of customers, or otherwise — they have specific sets of systems and processes to follow that are likewise the same as other likewise staged companies.
For example, many financial executives will pursue new career opportunities within the same industry, effectively ensuring that they won’t be blindsided by new processes that may take time to learn and understand. These types of processes and tasks that are creating patterns can lend themselves to automation, where the financial executive can focus his or her time on moving the needle for the company.
Misconception #2: New technology is risky
Truth: New technology can and will help you.
Twenty years ago this may have been true, but in the age of the Internet, new technology is appearing on a daily basis. Twenty years ago, smartphones were a fairly new concept, now there isn’t a person you encounter that doesn’t have a smartphone. Technology evolves and becomes less risky over time.
Artificial intelligence, machine learning, natural language processing — these aren’t scary new concepts anymore. People are using these concepts and technologies every minute of every day. AI is no longer just the 2001 film about a robot, it’s helping people to automate mundane tasks to focus on high-value activities across industries.
Now companies across the globe are partnering with experts to help automate and streamline activities. Don’t shy away from these opportunities, allow AI to be an extension of the finance team to help accelerate processes, complete work, faster and without errors, thereby removing the drudgery of task repetition and improving productivity and efficiency.
Misconception #3: Automation will take away people’s jobs
Truth: It will reallocate your time to focus on higher-value finance strategies.
At one point in time, the rise of ATMs kept bank tellers up at night. They thought they were going to lose their jobs to the Automated Teller Machine that easily and quickly spit out money without any manual intervention. Fast forward fifty years or so, bank tellers and ATMs are working autonomously without any threat of job security.
Financial automation has the same effect. Gone will be the days where accounting and finance departments spend the day reviewing data set after data set. Automation will ensure that employees are actually doing the jobs they sought out to do when pursuing that accounting or finance degree.
Automation doesn’t take away jobs, it improves jobs. It creates new opportunities for the bank teller, for the gas attendant, for the finance director. It’s not a question of job security, it is a reallocation of human labor pools to create new opportunities to focus on governance, analytics, and business decisions.
Misconception #4: Automation means no human touch
Truth: Successful automation requires a human touch. It needs a person to run at its optimal level.
There’s a bidirectional handover between artificial intelligence and human engagement. Humans are still required to ensure that there is oversight and governance. AI cannot happen in a vacuum, and the amplification provided by the human form factor is a force multiplier for well-designed AI.
While automation and machine learning is doing the grunt work, reviewing unstructured and structured data, the bidirectional handover of data once reviewed, culled and analyzed means that humans can derive insights and make recommendations, decisions, and more. What was once a project that would take weeks of manual research and analysis turns into minutes with the infusion of automation.
Misconception #5: Manual tasks are the bulk of any financial operation
Truth: Manual tasks don’t need to take up the bulk of the financial operation.
Take collections, for example. The old-school approach to collections is manual, where a collections clerk reviews the list of delinquent accounts and determines what companies to reach out to first by the age of the delinquency and the amount owed.
This takes up the bulk of the clerks day — reviewing accounts, reaching out and following up with account contacts and noting communication, payment amounts and dates and any other relevant information. Hours of time spent, chasing payments, never to be recovered..
However, what AI can do is change the game for the collections clerk. By adding artificial intelligence, now the list can be dynamically prioritized by level of importance, instead of a manual review of an Excel spreadsheet.
Better yet, AI can determine when the best time would be to contact customers for payment based on the history of the account and provide recommendations for which customers need an additional boost — whether that is an incentive or potential payment plan.
AI can even interact with delinquent accounts via automated responses and act as an extension of the collections team. This can and will result in reducing DSO (Days Sales Outstanding), increase cashflow for the company and ultimately allow the clerk to recover time.
This is only one example of many where AI can help remove the manual redundancy of a job and completely reframe an outcome to help improve a company’s bottom line.
Misconception #6: Automation will require a huge upfront investment
Truth: You can see the value of automation quickly.
Many people believe that by definition, automation will require a huge upfront investment, with hundreds of professional service hours, configuration woes and more. In truth, successful automation reduces time to value tremendously, and the benefits can be felt almost immediately.
Some legacy systems may take months, if not years, to fully implement and integrate into business processes. Automation turns this on its head to help businesses see the value in virtually no time at all.
The Future of Finance
With automation, a new era in Finance has arrived.
Financial automation isn’t scary or risky. It’s the future of finance. Finance teams must embrace automation in order to increase speed, accuracy and productivity. From CFOs to audit practitioners, financial automation allows all parts of the financial system to save hundreds of hours, streamlining processes to accomplish more in less time. To do this, finance teams must choose technology that includes AI-driven workflows and decision support across the massive volumes of enterprise data, to augment the team with intelligent automation to execute business processes, deliver rapid insights, and respond to customer needs.
In short, put aside the old misconceptions. Embrace the notion that finance teams deserve better. Financial automation will transform teams and ultimately allow financial employees to focus on the higher-level strategies that can move the needle for a company.
Originally published at https://blog.auditoria.ai.