As a business owner, you’re constantly trying to find out ways to smoothen your finance processes. Flawless finance statements are incredibly difficult to create and almost impossible to maintain manually. When financial operations are complex, you need a robust system for governance and the ability to audit oversights. The finance department has the responsibility of making sure the organization complies with regulations and avoids the potential for fraud.
This is where a competent software solution can step in, helping you take control of key financial processes. With a financial process management solution, you can standardize financial processes, streamline transactions, and obtain total clarity of list of finance processes like billing, approvals, budgeting, and bookkeeping.
What exactly are these systems, though? And how do they work?
What is financial process management
Financial process management, then, is a way to get separate finance-related business functions to run in a smooth, coordinated way. It is the technique by which you streamline the various financial business processes in your organization, and get them to function as a single coherent, consistent unit.
Also, Gartner defines process management this way: “a management concept that describes the goal of increasing intra-enterprise coordination of separate business functions.”
While financial process management is technically a concept, it can also be a series of software solutions that are designed to help you standardize finance processes and procedures, and help them all function consistently and efficiently at optimal productivity levels.
Why financial process management automation is inevitable
Turning to an automated solution for financial process management gives finance leaders a lot of great advantages as they run the processes and workflows in their company.
1. Absolute transparency:
With a finance software solution consistently performing at the highest level of accuracy, all payments and receivables are logged transparently without any room for discrepancy.
2. Data integrity and security:
Automating your finance processes allows you to minimize manual errors, which means you can be more confident that you have the right numbers. Finance process management involves sensitive data, and process management ensures the best data security and integrity.
When finance approvals aren’t held up by convoluted email threads and unwieldy spreadsheets, processes and procedures run much more smoothly and efficiently. With finance management software taking care of financial process management framework and guidelines, they run much more smoothly.
By breaking down a process and defining its flow, you can easily automate recurring rule-based financial processes. Most finance approvals are repetitive and predictable. Handing them over to an automated solution ensures zero manual errors, and frees up your workforce to focus on areas that need human logic and decision-making abilities.
You won’t have to worry about what happens when your organization grows. When a finance process is standardized and set in stone, it doesn’t matter how many individual tasks are running; results will be consistent, irrespective of the process.
Key finance processes and procedures you should automate
Some organizations have separate units for procurement, finance, and accounting. Others have a blanket ‘finance’ team that handles all processes that fall under this broad banner. Whichever way your organization is structured, you can be sure of one thing: finance automation poses an undeniable improvement.
Let’s take a look at a few of these finance processes.
1. Budget approvals
Approvals take up a lot of time in the modern workspace. Research shows that up to 20% of the week is spent looking for internal information. That’s 8 hours per week–a full workday.
Budget approvals, regardless of the size of your organization, need to be approved by multiple stakeholders across multiple teams and varying levels of hierarchy. This often means that routine approvals are held up simply because someone along the line is unavailable or too busy to sign off on an approval email.
Automation brings rule-based decision making into the picture, which means that it can make decisions based on whether certain parameters you set are satisfied. At the very least, it can route each approval request to the right people, sending notifications so they can sign off without having to update paperwork or lengthy email threads.
2. Purchase orders
Automated purchase orders are now both easily accessible and affordable. Given that they make such a difference, it would be a criminal waste to not automate these key financial processes.
Armed with a SaaS solution to take care of POs, team members in your organization will now have the ability to generate these orders from any location. Even more importantly, this convenient method speeds up the entire process across the organization. Both initiators and approvers can look up orders whenever they need to. Like we’ve said here, the best systems can generate instant reports as well, allowing you to track, monitor, and analyze your business costs on the fly.
3. Capital expenditures
CapEx, or Capital Expenditure, covers the whole range of expenses a company shells out to improve itself. These are mostly driven by the competition leveling up, or new tech trends that you need to stay ahead of. With both of these cases, speed is vital. Finance process management takes care of this, by optimizing and streamlining processes like capital expenditure approvals.
4. Travel request
When employees decide to travel for business, they raise requests for business trips with an estimated amount of costs. This can be a form where most employee details like name and reporting manager are pre-filled. Having a systematic flow for this information to reach the managers for approval can save a considerable amount of back and forth.
5. Expense management
The burden of expense management usually falls on finance teams. There are far too many people involved in it and the finance team has very little control over it. This includes the money the business spends on purchasing assets, as well as employee-incurred expenses during business trips.
The finance team has to set a spending policy and ensure that everyone in the organizations sticks to it. Further, they need to analyze spending patterns to identify areas of excessive spending and cut back on unnecessary costs.
6. Invoice processing
A lot of automation efforts are aimed at taking cumbersome paper trails off your hands, and replacing them with consistent, everyday efficiency. And that’s exactly why invoice processing takes to automation like a fish to water.
By automating tasks like recurring payments, periodic billing, and accounting, you take a load off your entire finance team’s shoulders. Since entire finance workflow processes are automated, you get to boost revenues through accurate insights. You can watch the exact metrics you need, and streamline all the necessary processes.
The CFO’s role is changing
As modern organizations lean more and more toward technology, it’s quite often a point of debate whether finance automation software will replace humans. Technology sure does change the roles and responsibilities by stripping away what used to be mundane work.
So, the CFO’s can move from the role of creating and analyzing financial documents to that of strategizing and advisory and steering the company during tough financial times.
How not automating finance approval processes can affect SMBs
In today’s closely competitive world, you don’t just need to impress your customers better than your competition does. You’re actually also competing with every other successful brand in your consumers’ minds.
Similarly, companies around the world are facing a talent crunch and need to impress their employees and candidates as much as their customers.
- Aging and inefficient financial processes and procedures can contribute to losing out on impatient customers and frustrated employees.
- With a conventional system taking care of consistency, there are bound to be a lot of holes in the finance department. Even the most diligent worker can mess up approvals, delay processing time, make errors in bookkeeping, mismatch invoices, and have slow days. This has real implications, such as lost revenue, unaccounted assets, and even dropped clients and disgruntled employees.
- The bottom line is quite simple–if you want efficiency and consistent results in today’s cut-throat world, there’s simply no skipping past automation.
How can Kissflow help?
A finance automation tool like Kissflow Finance improves your overall efficiency, gives you accurate insights, and streamlines your finance processes. Key processes like CapEx requests, payment requests, and budget approvals can be structured and automated with user-defined logic.
You don’t have to worry about bulky email threads, delayed approvals, or manual errors. Kissflow Finance brings a level of convenience, efficiency, and automation that makes corporate finance management a breeze.