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. Finance makes sure that all monetary transactions are recorded accurately and in line with the budget.
But how does each department stay on top of its work? Processes. Perhaps 90 percent of any department’s work can be seen as performing the same sequence of tasks over and over again.
What is a finance business process?
A finance business process is a sequential set of tasks that takes a set of data to a finished state. For example, travel reimbursement is a common finance business process. The process involves collecting employee expenses, passing that information to managers and finance teams for review, and getting it approved until the employees get reimbursed.
There are several finance business processes like purchase requests, invoice approvals that the team must complete on a daily, weekly, monthly, quarterly, or annual basis.
Benefits of having well-defined financial 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 processes. Once you’ve identified the finance process flow, 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 finance 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.
What finance business processes can you automate?
There is a list of finance processes that can be automated to run everything smoothly and efficiently.
If you’re still managing your finance department the old-fashioned, manual way, then you’re way behind the times. Manually managing financial 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 process automation is key to ensuring that your organization is up to the task of growing and scaling for the future. Here are some of the key areas where having a process in place helps:
- Budget Approval – Get yearly or quarterly budgets approved and applied to spend
- Capital Expenditure – Get approval, financing, and funds to make a capital investment
- Travel Reimbursement – Approve and release funds quickly for any qualified travel requests
- Employee Timesheets – Quickly review and approve timesheets to release payment faster
- Purchase Order – Give the procurement team the documentation to make a purchase
- Cheque Requests – Arrange a payment to a vendor, supplier, or business partners
Challenges of NOT Automating Finance Processes
With so many predictable processes, why is it that typical finance business processes take so much effort to complete?
Most companies handle any financial 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 finance approval, and giving notifications to the initiator when that instance of the finance process is complete.
This means a lot of work and it often leads to sluggish finance processes, errors in transferring data to multiple systems, and miscommunication. When you automate a financial 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 finance approvals. However, sending emails, data entry, and taking care of notifications are all things that a system can easily do.
The best way to streamline finance business processes
A workflow automation tool like Kissflow can help you implement finance process automation with zero effort. Once you’ve identified the processes you need to streamline, set up approval hierarchies and give access to all the people involved in a process.
Employees 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, take Kissflow Finance for a spin and see your finance team’s efficiency soaring.