Why automating your finance department can help your enterprise excel

Is overhauling the finance function high on the agenda for your organisation this financial year? If you answered in the affirmative, join the club.

Latest research suggests organisations are – finally – putting their money where their mouth is, when it comes to finance transformation. Some 91 per cent of decision makers across all industries see an optimised finance and accounting (F&A) function as essential to their growth, resilience, and success, and 96 per cent have a digital transformation strategy in place, according to BlackLine’s most recent global survey of finance leaders.

From cost centre to contributor

What’s prompting this mass drive to modernise? In fact, it’s been far from sudden. Recent years have seen Australian businesses come to the collective realisation that F&A is not ‘just’ a cost centre; it’s the veritable engine room of the enterprise.

Without a streamlined, efficient F&A function, organisations run the risk of delays and errors when it comes to paying employees and suppliers, maintaining a healthy cash flow and monitoring the performance and profitability of other business units.

No surprise then, that 60 per cent of finance leaders see improving business processes and agility as the top driver for their F&A transformation.

An expanded remit for accountants

New ideas about the role F&A professionals should play within an organisation have also been an impetus for wholesale change.

Of late, F&A personnel have been co-opted to assume a range of additional responsibilities that go far beyond their traditional number crunching remit – think ESG oversight, headcount control and remote work enablement to name a few.

That’s good for the individuals in question because being given more high-level responsibility typically results in increased job satisfaction. Organisations have stood to benefit, too. When employees are engaged and motivated, they’re likely to stick around for longer, thereby reducing recruitment and training costs, and minimising the disruption that inevitably ensues when staffing changes occur.

It is, however, impossible for a finance team to be so many things, to so many people, in the absence of the right platforms and processes.

Tools to make the task easy

That’s where continuous accounting software has a critical part to play. It’s the enabling technology that makes it possible for finance professionals to do much more with less: to collect the cash, balance the books and take on an integral role in the broader operations of the enterprise. The term continuous accounting refers to a digitally driven methodology for managing the accounting cycle. It’s designed to distribute workloads evenly across the accounting period, rather than finance departments experiencing an activity surge at close time.

The concept centres around three key principles: the automation of repetitive processes; the elimination of end-of-period bottlenecks; and the creation of a continuous improvement culture.

Continuous accounting isn’t just fast, it’s also highly accurate, courtesy of the fact it eliminates opportunities for human error to occur.

As well as putting paid to the tedious and time-consuming elements of the accounting function – think posting transactions and reconciling payments – it can provide finance and business leaders with unprecedented visibility into their organisation’s financial position.

Armed with those up-to-the-minute insights, they’re able to respond to rapidly changing conditions and make better business decisions.

Expediting cash flow

Automating the accounts receivable function, meanwhile, has the very pleasing effect of improving cash flow and mitigating the risk posed by delinquent debtors – a real and rising danger for businesses in today’s deteriorating economic climate.

By streamlining the collection and discharge of debts, and the internal collections process, organisations can reduce their manual processing activity and speed up payment times.

But an automated accounts receivable platform isn’t only an uber-effective efficiency driver; it’s also an invaluable source of previously untappable commercial intelligence. Finance professionals can use it to map payment patterns over time and identify customers who repeatedly fall behind.

Forewarned is forearmed and this data can be used to make well founded decisions about whether to rescind or reduce credit, or, conversely, to increase it for individuals and organisations that settle their accounts promptly.

De-risking your operations in this way can reduce the likelihood of incurring a significant loss should a major debtor go under.

Towards a stronger future

There are significant opportunities for Australian businesses to improve and optimise their processes in the F&A department. While transformation is already on the agenda for many, moving harder and faster is an imperative for those that want to remain in the vanguard.

Harnessing the power of automation is a sure-fire way to achieve rapid efficiency and productivity gains and organisations that don’t have it on their investment agenda for FY2024 risk being left behind by more fleet-footed competitors.

By Rosie Cairnes, Vice President Asia Pacific and Japan – Account Management Organisation at BlackLine