Financial Automation Best Practices & Case Studies

Anybody involved with management and finance departments is well aware that the most challenging difficulty they face is having an excessive amount of accounting information and not understanding what to do with it. However, it is possible to end this misery by automating the reporting and financial analysis processes.

Using automation systems for reporting and financial analysis, firm finance managers can get answers to the following issues when dealing with the overall balance of the company’s profits and losses on an annual basis:

Approximately how much money has the customer made in net profits over the year?
What has been the evolution process in sales, broken down by customer, zone, department, services, and so on?
Which our customers the most often requested services and products? Why?
Have we adhered to the estimates outlined in our budgets?
Is it true that our spending is connected to the budgets that have been developed?
Where do we create more revenue: from fee-based customers, specialized services, or other business proposals?
How have the findings evolved throughout time, and how have they been allocated to different periods?

However, for the automation of reporting to ultimately perform its tasks, which range from producing financial scenarios and reports that aid in decision-making to generating economic procedures and reports that assist in decision-making, it needs a prior organization.

The automation of reporting makes it possible to generate comprehensive and dynamic reports that condense the critical points of the business related to budget generation and management and place them at the disposal of those who require them regularly, thereby facilitating the making of informed decisions at each stage of the journey toward achievement.

What Is Financial Automation and How Does It Work?

The importance of financial process automation for a corporation cannot be overstated. First, however, it is necessary to create a clear definition of the term while also analyzing some of the most often employed technologies in these applications. After all, we’re dealing with a rapidly expanding area that is already rather large—so let’s start with a straightforward definition.

Defining the Concept of Financial Automation

In its most basic definition, Automating financial operations refers to any activity that, through the use of technology, lowers or eliminates the need for manual human input and monitoring in any procedures involving the expenditure or receipt of funds. Automation tries to decrease the amount of human involvement required in specific processes, lowering mistakes and increasing speed.

The purpose of automation is straightforward: to provide organizations with the speed, consistency, and essential insights they need to compete in a marketplace that is only becoming more competitive all the time.

Technologies Employed in the Automation Process

FPA is a broad term that includes various tools and pieces of software that you can purchase off the shelf. It consists of multiple devices, some of which are interconnected and others of which are stand-alone. So what are the most typical automation solutions that you’ll come across when you begin your journey into the realm of advanced innovation and technology?

RPA

Robotic process automation, often known as RPA, refers to a particular class of software “robots” that assist business users in automating routine business procedures. Not the robots of science fiction, but rather configurable programs that obey a set of rules when carrying out their duties. RPA bots may extract critical information from documents or emails, which can then be pasted into another software, for instance. Robotic process automation (RPA) bots are becoming more common in financial activities.

Document Automation

In document automation, operations such as those obtained inside Kofax ReadSoft Online® are referred to that are concerned with the automated extraction of information from papers before it is processed into your business systems. For example, when someone scans new invoices into the company’s systems, this procedure might relate to the generation of the automated paper. As a result, document automation systems may save up hours of precious office time that would otherwise be spent on repetitive duties and administrative tasks.

Process Mining

Using intelligent technologies to evaluate your entire business processes—such as your full-cycle accounts payable workflow—to create data that can be used to get insights is what process mining is all about. Process mining may indicate that invoices are a significant bottleneck for your company, resulting in expensive delays and cascading concerns across the organization. Almost every critical workflow in the world of company finance may benefit from process mining, which can give vital feedback.

Machine Learning

“Machine learning” (ML) is a term used to describe algorithmic processes that are capable of “learning” from previous findings or rules-based analysis. However, machine learning, although not an actual type of artificial intelligence, is a powerful technology that may assist organizations in making predictions, analyzing future options based on previous occurrences, and many other tasks. Machine learning algorithms also support many different types of financial automation software.

Agile and contemporary organizations need automation solutions aligned with their sectors, resulting in real-world gains and a more robust bottom line. Now, let’s take a look at what jobs may be automated, either entirely or partly, utilizing some of the technologies outlined above and tools developed by Kofax to see whether they are worth investigating further.

Benefits of Financial Automation

When you relieve your team members of the tiresome, repetitive, and time-consuming responsibility of financial reporting, you free up a significant amount of time for them to devote to higher-level, analytical, and forward-thinking duties.

Not only will your team profit from the saved time, but you will also gain other benefits, such as the following:

Rapid Approvals

Most financial reports need some approval, whether it’s for a cost-reimbursement or budget approval in general. Because there is no automation, a single person might cause the process to be held up if they fail to evaluate a document or pass it on to the next person in line.

Additionally, it is simple to lose track of which version is being used when emailing documents. While preventing the occurrence of the roadblocks mentioned above, automatic approval systems help keep the process on track and expedite the approval process time.

Enhanced Productivity

Immediately after switching from manual to automated financial procedures, you will see a boost in overall efficiency. Anything that may have possibly slowed down your team in the past (such as looking for data, data input, approvals, and so on) is no longer a problem.

Data Integrity

Even when a person pays close attention to every detail, there is still room for mistakes. For example, an error might be made while inputting data, or a vendor may transmit incorrect information to the customer service department.

Financial statements, reports, and other papers containing sensitive information must maintain data integrity at all times. As a result, you can have complete faith in the accuracy of the data provided by automated solutions.

Transparency

When your data systems are integrated, you get a complete picture of the financial health of your organization. In addition, when you can collect data rapidly and generate reports, it becomes much easier to see trends and make choices in the company’s best interests.

Less Fraud

Automating financial report generation may lower the risk of fraud since it becomes a more objective process that does not need as much human participation. Furthermore, if fraud occurs, the completion of reports as quickly as possible increases the likelihood of catching difficulties sooner rather than later.

Audit Trails

Using financial automation solutions, you can create audit trails in a matter of minutes. Because every activity is recorded in the system, you will always be able to look back to previous payments or reports to assist you in resolving any inconsistencies or concerns that emerge in the future. This capability is also quite useful for regulatory compliance purposes.

Best Practices for Financial Automation

Reduce your reliance on IT

When your IT staff is stretched tight and supporting several departments within your institution simultaneously, it might be challenging to have your request placed in their queue. However, coding is required for many complex software systems, which implies that information technology must assist you in getting your initiatives off the ground.

With no-code, you no longer have to depend on your IT staff to develop, test, and launch new tools, applications, or processes; workers with a wide range of technical abilities can rapidly learn how to use them without the need for further training. You may also make modifications and adjustments, all while seeing them live on your computer screen.

When you approach your IT staff about incorporating no-code technologies into your technology stack, they will be grateful. By empowering your team or department to be more self-sufficient, information technology may devote more time to technical activities that demand their experience and competencies.

Enhance turnaround time

Your clients expect rapid and efficient customer service from your company. Customers have high expectations of their financial services providers, whether they ask for a loan, fill out a membership application, create a new account, or purchase new goods. Employees must be able to quickly develop, manage, and update content to meet these expectations. Tools that enable a fantastic front-end experience must be available.

Conventional software may take months to train, onboard people, and develop, but no-code technologies can be implemented in a fraction of the time traditional software takes. As a result, a large number of businesses may be up and operating using no-code technologies in as little as a few weeks. In fact, according to our poll results, 50% of individuals prefer to use no-code tools over conventional software since they are simpler to use and develop quicker than traditional software.

It won’t be long before you’re faced with a job that demands a short turnaround time. No-code tools may help you go from concept to solution much more quickly, whether it’s enhancing the digital experience of consumers or automating document production. They can also help you streamline how you gather, store, and exchange personal and financial information. In addition, because many no-code solutions are designed to link with commonly used systems, you’ll be able to connect them to the most critical tools in your organization’s technology stack without having to write any code yourself.

Recognize equipment requirements

Examine the equipment available for printing, scanning, and viewing to determine its suitability. Things as simple as relocating or installing a printer may save employees a substantial amount of time by eliminating the need to go to other offices or locations of the company to share equipment. Do you have a dual-monitor setup for your accounting team? They are probably taking notes and then entering the information into another piece of software to complete the entry. To improve the accuracy of the data entry process, additional monitors may be purchased for a low cost.

Recognize your software

Please make a list of all of your existing software, including how you use each piece of software and how they interact with one another. Included should include your accounting software, payroll systems, point-of-sale systems, and excel spreadsheets. In addition, have a breakdown of how much time you spend working outside of your accounting program to create data and reports. Many firms only utilize 10% of the capability of their reporting tools, so make a note of everything you are presently performing outside of your systems for future reference.

Role-review

Examine the amount of time it takes to compile your monthly statements, as well as the reasons for the protracted timeframe. Do you have a large number of manual data entries or a lack of adequate assistance in your accounting department? Examine the responsibilities and abilities of your workers to ensure that tasks are aligned with the skill sets of your workforce. Finally, consider whether or not outsourcing would be the best choice for bolstering your internal staff.

Streamline your workflows

Before working inside the application, use a pen and paper or use flowchart software to create a diagram to establish your financial processes before working inside the application.

Include your team members who are directly involved in the day-to-day execution so that they can share feedback and insights on what is working and what needs to be fixed. While going through this procedure, you’ll be able to identify areas in desperate need of repair.

Create a process flow

Once you have identified a strategy and process that seems appropriate for achieving business objectives and desired results, you may design your workflow inside the software system. Then, run it on a small scale to see whether it’s feasible and what happens.

Analyze the integrations

Make sure that the program is appropriately talking with other systems before proceeding. You should use your financial automation software in conjunction with older systems and gather data from various sources.

Create a close financial strategy

The absence of a thorough, organized, and specialized plan for the financial closing process, which begins with a focused evaluation of significant challenges and gaps, is the most important source of complications in the process. Standard operating procedures and checklists are essential for ensuring speed and accuracy in the workplace.

The documentation and tracking of the entire month-end closing process are essential for increasing efficiency. It is hard to automate business operations without explicit knowledge of relationships, task time, and other factors. Therefore, each activity must be appropriately evaluated during the financial closing process regarding its importance and justification. This will aid in the knowledge of critical functions and the reengineering of these processes where feasible via lean approaches and intelligent process automation (IPA).

Deliver real-time data access

Many finance teams only have access to correct data towards the end of the month, resulting in a frantic scramble at the last minute to input data into the systems that perform the financial closure process, which may be time-consuming. Access to real-time data may help you reduce the time it takes to conclude a financial transaction and make more timely judgments.

Begin by isolating procedures that tend to occur once a month, just at the closing of the financial year. However, although jobs are often completed later in the close cycle, moving many of them earlier in the process simultaneously increases the frequency with which they occur.

Financial reporting may be completed more quickly if many financial closure duties, such as journal entries, reconciliations, and so on, are not squeezed into a short period during the close cycle. Process them as they occur in real-time rather than waiting until the end of the month since this has the advantage of being more efficient. It is challenging to give real-time information with different systems from a technological viewpoint, where standardization comes into play. Real-time accounting is made feasible via the incorporation of digital technology into established business processes and procedures.

Financial Automation Case Studies

It is still early days in terms of the use of automation in the financial sector. However, just a few businesses have shown how it may be used in various situations. So we’ve compiled a list of five firms whose technology adoption provides valuable insights for anybody considering using the technology.

Kryon Systems – Claims Payment Processing

Insurance is one of the industries that has benefited the most from robotic process automation. Using RPA technology, Kryon Systems assisted a worldwide insurance firm in lowering the time it took to process claims and payments. It is one of the top firms that use robotic process automation (RPA) in finance.
RPA has shown to be a game-changing tool in the claims industry. Their customer, a worldwide insurance company, was required to go through 26 different bank websites and do intelligent searches to confirm that the payments had been received. Monthly, this occurs on four distinct occasions, with each month’s completion taking four working days to finish.
Following the use of RPA, the job was completed in just 2 hours. Previously, workers made errors, and searches were performed incorrectly; however, robots offered a mechanism that enhanced the accuracy of searches. Consequently, hundreds of hours of labor are saved every year, and human mistakes are eliminated. According to Kryon Systems, this is one of the most delicate RPA use cases in the financial services industry.

Bancolombia – Investment Portfolio Management

Bancolombia, Colombia’s biggest bank, has used robotic process automation technologies to assist its customers in better managing their investment portfolios, according to the firm.
It is successful for robotic process automation in the banking sector, demonstrating how the technology is advantageous for various businesses.
Anyone with more than $7000 in investments may use their robotic process automation solution, Invest. It delivers real-time insights on the market and portfolio performance and offers recommendations on adjusting to current market circumstances.
Another example of innovation is the rob adviser, who provides advice to Columbian investors on stock marketing and assists them in conducting experiments with the strategy.
Bancolumbia was able to educate about investing in the stock market in a digital format as a result of this.
Following robotic process automation technology, the following outcomes may be observed: PwC and CINTEL presented Bancolumbia with the prize for Digital Transformation in the best, most enormous corporation in Columbia, given to the bank. It is considered to be one of the top RPA in finance examples available anywhere in the world.

Zurich Insurance – Procedures for Policy Issuance

An additional company is reaping the benefits of robotic process automation in finance in Zurich, the world’s leading global insurance company, recognized with the Paragon Award and its RPA partner Capgemini for their innovative contributions to the evolution of the outsourcing industry.
Due to the automation of boilerplate policies, commercial underwriters may now devote their time and attention to more complicated procedures. Beginning with selection, optimization, robot maintenance, and ongoing advancements, Capgemini created robotic process automation (RPA) technology. During the early phases of development, the bot dealt with the intricacies of policy issuance in five distinct nations.
Consequently, the company’s insurance and pension segment in the United Kingdom saw an almost 50 percent cost reduction due to the restructuring. Moreover, in less than two months, the system was applied in several other departments.

Keybank – Accounts Receivable System

As the first commercial bank in the United States to cooperate with Billtrust and deploy robotic process automation technologies to increase its efficiency, Keybank is making history.
This paper employs very realistic RPA use cases in the financial services sector to demonstrate the effectiveness of RPA.
The bank streamlined invoice distribution and the accounts receivable process with the help of a robotic process automation (RPA) system developed by Billtrust. Through the use of
Billtrust’s Quantum Payment Cycle Management, electronic invoices are generated and sent to the customer. In addition, the adoption of robotic process automation (RPA) from beginning to finish has helped Keybank improve accounts receivable.
The bank has automated repetitive manual operations that were previously performed by hand. It anticipates that the overall machine learning deployment will result in an improvement in the process over time. In addition, it is enhancing its RPA skills to provide a more seamless digital transition.

Guardian Group – Legacy systems

According to the company, the Guardian Group, a prominent Caribbean insurer, has decreased the strain on its legacy systems by deploying robotic process automation technologies.
Through a partnership with Sutherland Global Services, the firm could deploy RPA software that can retrieve, compute, and input data into the company’s primary enterprise application.
It implies that robots will take care of all of the tedious data input and processing tasks. Now, RPA in the banking sector is using the same example to develop bots for data input in an infinite number of variations.
While older systems were formerly considered a burden, robotic process automation (RPA) has changed that perception. Following the successful implementation of robotic process automation, Guardian Group intends to roll out automation across the whole organization to provide better service to its clients.

Final Thoughts

When done correctly and with attention in selecting the relevant technologies, finance automation may result in a wide range of excellent benefits for any organization. Simply lowering the risk of fraud and avoiding needless expenses are two compelling reasons to consider automating your business procedures.

Taking the initial steps in becoming more simple as more and more solutions become available on the market.