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Why an automated finance team will pay dividends
04 January 2023
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13 minute read
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Finance teams are seen as the last step in a long sales process, ready to manage transactions by issuing, monitoring and, ultimately, closing out invoices. This reality can lead to these teams being viewed as administrative staff, supporting other departments but not necessarily bringing in business value of their own.
Underfunded and lagging behind on advanced tech, finance departments often suffer from costly turnovers and are plagued by manual task inefficiencies. Some of this has to do with a lack of market knowledge around finance automations while some has to do with a misunderstanding of how employees can be encouraged to maximise their impact on the company.
Unfortunately, people are becoming less interested in finance with CPA examination candidates plummeting by 17 per cent from 2020–21 and equally alarming signs in undergrad and master’s degree accounting enrolments.
Long before trying to put a title on every skill that finance professionals bring, there were three general ideas: accountants to manage the past, finance operators to manage the present, and financial planners to prepare for the future. While these titles clearly define responsibilities, in reality finance teams have been collaborating to complete these tasks on their own — manually.
Developing KPIs, regulatory documents, critical reports and managing payroll manually creates chaos where each finance team member has their own process for completing a task. When processes are delayed and deadlines missed, companies must take out short-term loans to meet expenses before receivables can be cleared.
In today’s environment, manual tasks and inefficiencies meet higher interest rates and mean greater expenses. For example, a 5 per cent increase sounds small, but that translates into $500,000 your organisation loses for every $10 million you borrow.
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Finance professionals as income generators
Now, let’s imagine we can remove the manual tasks from finance teams and move them on to an automated platform which can stay on top of reports and even execute a smart dunning strategy. What would your experienced finance team, who knows the systems of your organisation and perhaps others, be able to accomplish when not bogged down with repetitive manual tasks? How can they help CFOs who are in the trenches to better strategise financial plans for the organisation?
Consider the mindset of these employees. When a good financial professional encounters an idea that doesn't look feasible, they don't just toss it. Instead, they determine precisely what makes it too risky. From there, they can assess the level of risk and introduce potential ways to mitigate it.
For example, good financial planning and analysis might not say, “Hey, it would be a terrible business idea.” Instead, it might recommend finding cheaper raw materials and making price adjustments to the final product or service. Other options might include optimising processes or investing in new tools.
These steps can significantly reduce costs and improve profitability. After all, a dollar saved is a dollar earned. If you reduce your expenses, your net profit automatically increases. These profits are then distributed to shareholders or pumped back into the business.
Consequently, these types of strategic financial professionals are the ones that directly impact the bottom line by generating income.
Putting automation into play
While automation sounds like a great way to optimise any team, it’s important to find a tool that has what you need. No two companies are alike, and that also goes for accounting automation platforms.
Talk with your team to understand their needs. Which recurring tasks can be automated? How successful are their dunning emails? How much time would be freed if an automation platform sent out invoices, automated conversations, calculated KPIs and could conduct cash forecasting for different scenarios?
By understanding what they offer and what can be achieved, stress loads can be lowered, reducing churn and maximising efficiency. Ultimately, this can lead to a more reliable cash flow and significantly lower operating costs. Once you reimagine how your finance team works, you can begin to imagine the benefits they will bring to your organisation.
Yan Lazarev is a co-founder and CEO of data AI company Gaviti.
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