What is financial process automation and what do you need to do to get your business ready to adopt FPA?
Keeping up with the ever increasing volume and speed of client data is giving accountants and the financial services sector a severe administrative headache.
Ensuring all of that data is recorded and used correctly (especially given the majority of those figures will arrive on mass during the last 2 days of the month) creates a huge workload with very tight deadlines for the staff involved and that in turn can easily create a dangerous bottleneck not to mention lead to potentially damaging errors and miscalculations.
And, when you add in the additional stress of staying up to date with international financial standards, turbulent exchange rates and an unsettled political landscape that is forcing your clients to make drastic strategic changes, it is easy to see why many accountancy practices and financial service providers are pushing hard to implement Finance Process Automation (FPA).
Contrary to some early misconceptions FPA doesn’t mean replacing your people with robots! It simply means using specialist software solutions to automate essential but routine tasks like accounts reconciliation, generating purchase orders, approving invoices, expenses and disbursements, budget approval and the preparation of financial statements and management accounts so they require very little human involvement.
On the surface FPA seeks to streamline processes and increase internal efficiencies and, according to EY, that alone has been enough to persuade 65% of businesses that automating finance processes should be priority for them in the near future. However, if you look more closely there are a number of other benefits for accountants and financial advisers that are prepared to invest in its implementation including:
1. Increased accuracy
While your people may be fantastic, your clients and the other external data sources you rely upon may not be quite as diligent with the details. This means small but crucial errors can be made which can throw your numbers way out. If the forms are automated, the potential for manual errors is eradicated and you will be able to provide your clients with a completely accurate output.
2. Faster turnaround
Automating some of your more basic processes will allow you to replace any of the tasks that have traditionally slowed you down. Studies have shown that simply by automating the approval of expense claim can save you as much as 8 man hours per week.
3. A more comprehensive overview
Connecting all your financial systems will provide you with a more comprehensive overview of where your clients are. Having that ‘bigger picture’ will allow you to alert your clients to potential problems earlier and give them more time to make crucial decisions on how best to manage their business or their personal finances.
If those benefits look attractive you also need to be aware there are 4 steps you will need to take before you can start to roll out finance process automation:
1. Identify the changes you need to make
If you can break your current processes down on paper as a flow chart you will be able to identify which tasks can be automated. Once you have identified the potential changes, discuss your ideas with your management team to get their perspective as they may have their own ideas of additional tasks that could be streamlined or reasons why some of the tasks you’ve identified shouldn’t be.
Once you have a final list you can then make an informed decision as to exactly what software you will need to support your automation.
2. Create the right digital form
If your automation is going to be successful you will need to invest a significant amount of time to make sure you have the correct digital form in place from day one. It will need to capture all of the required information (including fields that cover the supplementary, occasional or seasonal information that can easily be forgotten) and, just as importantly, it needs to be logical and user friendly.
3. Integrate your form into your existing workflow
Once you have your firm you need to create a workflow around it and then provide the training your team will need to start using it making sure that the different tasks involved are assigned to specific people and those people both understand which tasks they are responsible for and the part those task play in the overall workflow.
4. Ensure your new form and workflow is compatible with all of your other software
Before you press ‘go’ you need to be absolutely sure your new automated processes can communicate and share information all of your other systems and that could well require advice from an external expert if your IT team doesn’t have the requisite skills or experience. While that may look like an additional cost you could cut, it isn’t. If you are prepared to go to the expense of automating your processes, then cutting this corner could well render that investment void if your newly automated processes don’t work with your other systems.