Finance Automation is the Future of the Corporate Back Office

Finance automation is the future of the corporate back office

For a long time, the corporate back office was inundated with paper processes, manual data entry and calculations, and more.

Enter ERP and cloud accounting software.

These technologies presented numerous opportunities for the corporate finance department. SaaS-based software meant that spreadsheets were no longer the “be-all-end-all” of the finance team (although spreadsheets are still incredibly useful). While this software has been incredibly helpful, technology has transformed all aspects of business, and these teams now need to be armed with more than just basic software and spreadsheets to be successful.

2020 Automation in ERP and the Finance Back Office Survey

The results of the 2020 Automation in ERP and the Finance Back Office Survey revealed over 50 percent of teams automate 40 percent or fewer back-office tasks. In an industry ripe for automation, this statistic was surprisingly low. Additionally, only 5 percent of respondents said that more than 80 percent of functions are automated. Despite the low numbers, 45 percent of respondents noted that repetitive manual work is a significant burden on the organization — putting undue stress on corporate finance teams.

When it comes to individual departments, Accounts Payable and Accounts Receivable are two of the most manual back-office finance processes. More than 50 percent of respondents noted that these two departments suffer from the most manual processes.

The Challenges That Accounts Receivable and Payable Face

While other industries embrace automation, Accounts Receivable and Accounts Payable are stuck in the past, dealing with manual processes to contact and follow up with vendors and customers. Our survey results showed some commonalities among the two departments’ challenges: continuous communication and follow-up regarding payments.

The top three challenges in Accounts Payable include challenges in vendor payment, inaccurate invoices, and payment status. More than 25 percent of respondents indicated that getting approval to pay vendors is a significant challenge. Additionally, 21 percent said that receiving inaccurate or partially completed invoices from vendors is the biggest hindrance to their jobs. Vendors continually requesting payment status is the third top challenge for the Accounts Payable department, with 16 percent indicating that this is a major hurdle.

Accounts Receivable teams face similar challenges, with repetitive follow-ups and lack of responsiveness being top of mind. Our survey results show that 29 percent of respondents say a lack of response from the customer billing contact, and 23 percent say a lack of response from an internal colleague is a significant challenge. In comparison, 21 percent say the repetitive follow-ups with customers on billing payment is the top challenge.

Why Finance Automation Can Be the Solution

1. Automate Manual Processes

2. Analyze Large Amounts of Data

AI can analyze the invoices and provide future recommendations on when to send invoices in the future based on payment timing while also predicting potential future delays in payment.

3. Free Up Time for Finance Teams

Key Takeaways

Automation across the corporate finance function can not only help individuals with their day-to-day operations — saving vital energy, effort, and sanity — but also helps financial executives to reduce time overall and improve the company’s bottom line.

Ready to make a change in your corporate finance function? Test drive Auditoria and learn how our powerful SmartFlow Skills can automate both simple and complex financial tasks, including vendor management, cash flow forecasting, and audit readiness.

Click here to take a test drive of Auditoria and jumpstart your financial automation journey today.

Originally published at https://blog.auditoria.ai.

Auditoria.AI is a pioneer in AI-driven automation solutions for corporate finance teams.

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