You have a highly trained accounting staff, and you want to make the most of their expert skills and prowess. Performing mundane duties such as manual data entry — tasks far below their skill level — can not only slow their process but may also pull them away from completing more advanced tasks for your business.
To make the best use of your accounting staff’s time and skill, consider the advantages of automation.
In 2016, the Association of Accountants and Financial Professionals in Business (IMA®) and BlackLine conducted a study of process automation in accounting and finance. Responses from 751 finance professionals indicated that reliance on manual tasks increased the time spent on financial statements, as well as the risk of inaccuracies.
With a substantial number of finance professionals (80 percent) dissatisfied with their company’s accounting processes, there’s a critical need for automation. The full report clearly shows the concerns of finance professionals with regard to tracking, risk, accuracy, and reporting. Additional concerns include getting information from other departments (29 percent), staff resources (22 percent), and current software systems (19 percent).
Inefficiencies like these make it difficult for accounting professionals to respond quickly and effectively to the demands of management and decision makers. The greatest obstacle to their responsiveness?
According to 41 percent of respondents, it’s the time to compile the data. This resource-hogging task “undermines the information’s usefulness” — and opens the door for automation to fit into the accounting picture.
Up-to-date technology alone won’t solve all woes regarding agility, efficiency, and productivity. Employees must be properly trained on how to use new software and/or hardware for it to be effective.
Agile, Efficient, Productive
The best financial teams are agile, efficient, and productive — traits that are enhanced and supported by modern technology, such as automation.
Nick Ismail’s article “All Hands on Tech: The Impact of Outdated Technology” published in Information Age, states, “In the real world, out of date devices and technology that is hard to use are forcing employees to waste one of their company’s biggest currencies: time.”
Ismail cites research that reveals 167 hours per employee per year are wasted due to obsolete technology. The cost extends beyond mere hours lost to inefficiency: “Nearly one in seven (14 percent) admitted that they would stop looking for another job if their office had better technology.”
Up-to-date technology alone won’t solve all woes regarding agility, efficiency, and productivity. Employees must be properly trained on how to use new software and/or hardware for it to be effective. Hours invested up front in training save time that might have otherwise been spent in head-scratching, frustration, or correcting operator errors.
SmartCEO identifies tasks that may be well suited for automation: accounts receivable, accounts payable and purchasing, financial reporting, expense management, and bank reconciliation. The ability to automate each of these will depend on your industry and business model.
Your accounting team should be able to tell you which tasks are eligible for automation in your company’s situation. Other simple processes — such as standardizing file naming conventions — improve efficiency, simply because accounting personnel can then find the documents they need more quickly.
Consistency, Control, Transparency
Of every department within a business, perhaps the most rigidly guided by process is accounting. In the modern business environment, every effort must be made to streamline processes to ensure work is performed reliably, on time, and without error.
“[T]edious tasks take up too much time and lead to an uneven workload, long hours, and escalating frustration,” says Susan Parcells, CPA, CGMA, writing for Strategic Finance.
Parcells describes the crucial importance of accuracy in accounting using the traditional record-to-report process: “Each line on the balance sheet is made up of thousands of underlying transactions, often manually compiled and adjusted by overworked accountants facing pressing deadlines.” Simply put, one small error in one underlying transaction affects all subsequent lines on the balance sheet. The error snowballs and leads to egregious reporting inaccuracies.
Automated processes can solve problems related to the end-of-period “crunch time” frustration and work overload — while also mitigating the risk of inaccuracies. Beginning the transition to automation involves analyzing every step needed to deliver each product.
Parcells recommends beginning with automation of the most easily converted and most error-prone tasks, such as transaction matching or daily high-volume reconciliations.
Your accounting staff will know best which of their duties can be easily transitioned to an automated system, and which will still require a diligent human eye to review. Automating tedious, low-level deliverables provides accountants with better visibility and greater control over the business’ financial data.
More Automation Benefits
Automated processing of some financial work affords executives the benefits of a well-utilized workforce. The analytical, detail-oriented minds of their skilled accounting employees can be harnessed for more research and analysis, and less of the manual data entry tasks.
For example, your team may use automation to reconcile high volume accounts, reviewing spreadsheets and matching transactions. In the case of exceptions — sheets the automation can’t reconcile — employees can then review those for resolution, saving hours of time and tedious work.
If a certain exception occurs frequently enough, employees can set a new rule or parameter to automatically process that type of variance. This type of automation, when applicable, reduces exceptions and eliminates the grunt work of many traditional accounting tasks.
Less time spent on low-level manual tasks means more time for finance professionals to focus their detail-oriented minds on high-value services, such as “fraud detection, compliance, data analytics, technology strategy, and business advice.”
With more freedom to devote their skills and energy to higher level tasks, your finance team can foster an environment of continuous improvement and foresight — guiding your business more surely into a profitable future; which most executives will agree is an ideal use of accountants’ time and abilities.
Jason Kruger Signature Analytics
Jason Kruger, president of Signature Analytics, has more than 16 years of accounting and finance experience in both public and private industry accounting. Since 2008, Jason has acted as the CFO for many of Signature Analytics’ clients, providing them with the financial analysis they need to grow their business and make more data driven decisions. He has direct experience with many complex accounting and financial issues within a variety of companies and industries, including software, technology, biotech, manufacturing, food/beverage, apparel, construction, and advertising.