Finance Business Process: Your Easy Guide to Handle Finance Processes in 2019
December 19th, 2018 • finance
What is a Finance Business Process?
Every department has a central focus. Sales tries to close new deals. Marketing works on brand awareness and new leads. R&D examines how to build a better product. And, Finance makes sure that all monetary transactions are recorded accurately and in line with the budget.
But how does a department do this? Processes. Perhaps 90% of any department’s work can be seen as performing the same sequence of tasks over and over again.
For example, travel reimbursements are a common finance business process. The process involves collecting a certain set of data and passing that data on a predefined path of processing and approvals until the objective is finished and the expenses are paid.
There might be more than a dozen separate finance process improvements that the team must complete on a daily, weekly, monthly, quarterly, or annual basis.
With so many predictable processes, why is it that typical finance business processes take so much effort to complete?
Why Manual Processes are Not Working?
Most companies handle any finance business process manually. This means a human is responsible for collecting/entering data, knowing whom to pass it onto next, pasting the data into the financial management tool, sending an email to get approval, and giving notifications to the initiator when that instance of the finance business process is complete.
This means a lot of work and it often leads to sluggish processes, errors in transferring data to multiple systems, and miscommunication. When you automate a process, you separate the process into those tasks best done by humans and those best done by a system.
For example, humans might need to initially populate a form with data, and offer approvals. However, sending emails, data entry, and taking care of notifications are all things that a system can easily do.
What Finance Business Processes Can You Automate?
If you’re still managing your finance department the old-fashioned, manual way, then you’re way behind the times. Manually managing financial business processes are a bottleneck for your organization. They take up an incredible amount of time, leading to long work hours and a whole lot of frustration for your team.
Finance automation is key to ensuring that your organization is up to the task of growing and scaling for the future.
Here are 5 Key Financial Processes that you should be automating, if you haven’t already.
When it comes to automated financial processes, budget approval takes the top of the list. Every office has a laundry list of expenses, day in and day out. That’s where budget approval is required from the manager to the finance department before the budget can be put into action. This is an excellent place where finance process automation can be implemented.
With Business Process Automation Software, you’ll have an app or workflow that will outline the financial process in your office, starting from the person that is requesting the approval for the budget. The person who draw up the budget for the office will list out the details of the budget into the app, and send it to their manager. Once it’s approved, it’ll be sent to the finance department, who will then do a final check, and then approve the budget.
The advantage of having an automated financial process management here is that you don’t have to sift through dozens of emails in a thread to check through clarifications and rectifications. Everything is neatly recorded in the budget workflow, and there are comments to track what has been changed or added. So you’re not wasting any time wondering what changes were made.
Whether it’s new laptops or furniture, an office will need new assets from time to time, and it is extremely difficult to keep track of all of these using emails. There’s bound to be a ton of back and forth communication about the asset in question, the need for it, and other questions that may arise.
That’s where finance process automation kicks in. Just open a request, and you’ll be presented with a complete list of details regarding the asset in question, the need for the same, and any other details that may be required.
Most software that provides automated financial processes features also allows you to customize the workflow according to your particular organization, so you’re not caught using something that doesn’t fit your company.
In addition, you’ll have a separate comments section, where you can find a neat and ordered list of questions and replies regarding the purchase of the asset.
When employees go on official trips to attend conferences and meetings in other cities, they need to have their travel expenses reimbursed. Finance automation can also help reduce the overhead here as well.
All your staff has to do is enter the details of the reimbursement they need, along with the receipts for the same, and send it on to their manager. The automated financial process collects all the necessary details and sends it, perfectly organized, to the manager, who then reviews it.
Once the manager approves it, the request is then sent to the finance department, who can process the claim and transfer the amount to the employee’s bank account.
Employees can also benefit from automation with mileage reimbursements. The automated financial process for that is the same as for travel reimbursement. All the employee has to do is to fill in the mileage amount to be reimbursed, and any other receipts. Once these details are filled in, the manager can approve it, and send it to the finance department for transferring the amount into the employee’s account.
Paying vendors is an important key finance business process if you’re in a business where you’re manufacturing goods with materials procured from different vendors, or if you’re running an e-commerce store, where your vendors will need to periodically ship stock for you to sell.
Finance process automation can help here as well. Instead of going through a lot of manual work and red tape by doing it manually, you can automate this process to automatically send a payment invoice to the finance department. Once the finance department reviews it, the payment is processed to the vendor.
Financial automation makes this process much simpler, since you don’t have to constantly keep track of whether or not you’ve paid a vendor or not. That keeps your operations running smoothly as well.
Benefits of Having Well-defined Finance Business Processes
Businesses that are heavily reliant on manual methods like paper forms, spreadsheets, and emails do not take advantage of the predictability of the finance business processes. Once you’ve identified the flow of the financial processes, you can easily identify areas where tasks are hung up. Employees no longer have to pass on information manually.
Here are some of the advantages of having automated processes:
1. More Transparency
A well-defined finance workflow ensures that everyone involved in the process knows what the next step is. Every change is documented and everyone stays informed.
2. Increased Compliance
When you define guidelines clearly and communicate that with all employees, there’s little chance that they stray from the organization’s policies. This can save you a lot of time in approvals.
3. Improved Efficiency
The overall efficiency of the organization increases because everyone knows what the next step is. Tasks are not stalled or identified promptly when stalled.
How to Create a Finance Business Process?
- Define Your Goals
- Plan and Map Your Process
- Test the Process
- Implement the Process
- Monetize and Optimize
Define Your Goals
Identify the purpose of the process and figure out what your goals are with it. Find if you want to cut back on time, improve efficiency, or make the process transparent. Also, consider the cost of implementing such a process.
Plan and Map Your Process
Come up with strategies needed to achieve the goals and have a broad roadmap for the process. Identify the individual tasks your teams and systems need to do in order to execute the plan.
Test the Process
Start with a test environment and run the process on a small scale to see how it performs. Measure your results against your goals. Identify the gaps and make adjustments.
Implement the Process
Start running the process in a company-wide or team-wide environment. Properly communicate and train all employees to use these processes.
Monitor and Optimize
Review the process regularly and analyze its patterns. Document the process history. If the process is able to achieve its goals, replicate it for other financial processes.
How to Implement a Finance Business Process with KiSSFLOW
A workflow automation tool like KiSSFLOW can help you set up and implement your businesses processes. Once you’ve identified the processes you need to streamline, you can choose from 50+ preinstalled apps or create one that suits your exact requirements. With simple drag-and-drop functionalities, you can customize your forms to capture all the necessary information.
Set up an approval hierarchy and give access to all the people who are involved in a process. They can initiate tasks, enter information, and give approvals. The repetitive parts like sending emails, notifications, and logic-based decisions can be automated.
If you’re looking to implement financial process automation, options like KiSSFLOW can help. Take it for a spin and see your team’s efficiency soaring.
Automate Your Financial Business Processes
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