Guide to Financial Automation

Timely and precise closing of books is certainly at the top of every CFOs list, and in most cases, it takes weeks for the finance and account department to accomplish that arduous task. Besides, it’s imperative for CFOs to match pace with transforming regulatory regimes and accounting practices around the world.

All these, consume a lot of time and effort leaving not much bandwidth for what CFO’s actually be doing, like:

  • Collaborating with the business lines
  • Analysis
  • Offering crucial cross-functional insights

All in all, being a Chief Financial Officer means knowing much more than just advanced knowledge of Finance and Accounting concepts. Indeed, it means understanding how an entire company and the industry works and how you can make that company more profitable and competitive.

Thus, it’s right to say, “CFO’s wear multiple hats.” 

Furthermore, overseeing the financial activities of an entire company, the CFO acts as a catalyst instilling a financial mindset throughout the company.

In a nutshell, financial automation not just makes the closing book easier, also it accelerates the process far more frequently, which in return offers a real-time view of the company scenario.  To add, RPA allows CFO’s and financial advisors to evolve according to the market flux, becoming the forerunners that constantly assist along a growth-oriented path.

Let’s have a look at the handful of benefits RPA offers CFO and related departments and evaluate where it would fit into your own enterprise.

Unlocking The Benefits of Finance Automation for CFOs

Undoubtedly, the rush to automation is warranted. Financial automation especially allows teams to reach efficiencies that are a little difficult to comprehend today.

And, being a CFO or a financial advisor, you should encourage and maximize these changes – not only for investors or the company’s long-term success but also for better utilizing resources.

After all, Bill Cline (KPMG Advisory Principal) once said –

Bill Cline quote

So, let’s unlock the benefits!

Enhanced Productivity and Minimized Operational Costs  

RPA’s core objective is to automate voluminous, repetitive, and manual low-value work.

So, integrating RPA streamlines business operations and returns hours to the business and enables employees to focus on more prioritized projects. Freeing up resources also lets them focus on high-priority tasks that are often tabled because employees are only occupied with keeping up with the volume of manual work.

Gartner RPA stats

Moreover, one of the main arguments that favour automation in finance is reduced operational costs that directly relate to an organization’s pricing. This means more available cash flow for innovation and high-value activities.

According to a Deloitte survey, RPA leads to:

  • 92% improvement in compliance
  • 90% improved quality
  • 86% maximized productivity
  • 59% cost reduction

when integrated correctly, RPA can result in 25-80% of savings on current operating costs. For example, KPMG stated that RPA could save up to 75% for financial service companies.

Nearly Zero Operational Risks

“Push Your Team To excel, Not Excel!” 

  • Do you still certify an Excel workbook as a system of record?
  • Does your F&A team specialize in complicated formulas and macros?
  • Or are you at the brink of a key-man dependency because someone on the team built a complex formula-powered, cross-referencing data of an Excel spreadsheet?

RPA is a one-stop solution to eliminate End User Tools and the red flags of corrupted Excel files. Also, RPA ensures that the same steps are completed the same way, which eliminates the risk of not refreshing or retrieving up-to-date results.

Simply put, RPA processed data will be consistent, standard, auditable, and documented.

Addressing Workflow Inefficiencies & Bottlenecks

Many aspects of accounting and finance are repetitive but crucial for accessing and analyzing an organization’s financial health. For example, auditing, transaction matching and reconciliation are some processes that require employees to prepare and approve, making the complete financial process susceptible to inefficiencies and bottlenecks.

And as a CFO, the core focus is on the timely delivery of precise financials to stakeholders. Still, bottlenecks can result in missed deadlines, further extending the completion of the financial closure period.

Efficiently identifying bottlenecks and delegating tasks through Robotic Process Automation allows CFOs to accelerate the financial process and meet delivery deadlines.

Maximized Control Over Risk and Economic Volatility 

Undoubtedly, it has never been more crucial for CFOs and financial advisors to have the predictive technology and tools in the right place to deliver a strategic and informed approach to risk management.

In Particular, order-to-cash automation solutions can help achieve this. By allowing clarity over customers’ behaviors and historical data and by providing predictive algorithms that identify opportunity and risk, they secure it against an array of scenarios, for instance, downturn and upturn in market conditions, changes in customers’ business, etc.

As a result, CFOs can predict how to optimize potential revenue amidst minimizing bad debt risk.

Maximized Control Over Risk and Economic Volatility


Generate More Actionable Insights 

Minimizing errors and creating actionable insights from collected data are other unskippable benefit of finance automation.

According to Accounting Today, 41% of errors in finance and accounting originate from humans. In addition, 28% of companies can’t identify the mistake but report the wrong numbers, whereas big organizations spend, on average, ten days per month finding and fixing errors.

But, in the era of finance automation, these are bygones.

RPA, especially amalgamated with Artificial Intelligence, has surpassed human precision, reaching up to 99% accuracy. That path leads to fewer errors, equaling to less time spent resolving errors and avoiding duplicate payments.

objectives of finance automation


Optimizing KPI’s Indicator 

Often, companies do not have any metric to support where employees spend their time, volume, and effort. But, with RPA, organizations can delve into the details of how teams are using their time.

Usually, there are a lot of inefficiencies in manual business processes, so using the extracted information to reengineer the process for automation ensures the processes run more efficiently and effectively.

Furthermore, RPA allows tracking processes for volume counts, exceptions, processing costs, and average processing time.

Remember, isolating and analyzing exceptions further improve process inefficiencies, but it requires added-on metrics to understand how well the process is being executed. 

In a nutshell, the value of robotic process automation in finance is exclusive.

Though it may seem obvious for CFOs to unlock the value of finance automation, it’s high time to shed light on the use cases that make it an ideal choice. After all, a good RPA solution automates the most time-consuming, repetitive, and manual procedures and improves financial processes to uncover new sources of business value.

So, if you are still debating whether to employ RPA, here’s the answer!

Popular Use Cases of Finance Automation CFO’s Shouldn’t Miss 

Let’s have a look!

Use Cases of Financial Automation

Accounts Receivable and Payable

Account receivable is keeping track of outstanding invoices and entering data to get paid, including time-consuming tasks. Besides, to be precise, account payable is money owned by the business to suppliers and is another equally crucial finance function that includes numerous steps.

So, it makes managing “accounts receivable” and “account payable” among the most crucial finance functions because it eliminates undesirable cash gaps. In addition, it’s beneficial to understand Days Sales Outstanding (DSO), which is the time taken to get paid.

With RPA, it becomes a lot easy to prepare invoices, manage status, and hasten the speed of payment because you eliminate the risk of skipping anything. And furthermore, invoices are directed to the relevant person for approval, minimizing CFO’s work.

Financial Planning and Analysis 

Financial Planning and Analysis, popularly known as FP&A, comes under the umbrella of the CFO’s priority domain. After all, projecting short- and long-term financial strategy needs a lot of prep work and research.

This is a crucial aspect where a CFO demonstrates their worth.

And, not to forget, much time is consumed by sourcing, aggregating, and formatting data rather than strategically analyzing and planning. As a result, RPA once again eliminates several data entries to free up time for better forecasting and decision-making.

Forecasting becomes more precise and reliable, helping FP&A teams make more informed business decisions for the company.

Client On-Boarding

Client onboarding in the financial service sector is a time and effort-consuming process; the standards require a thorough check, known as “Know Your Customer”.

This usually takes up the complete team’s time as they comb through internal and external data sources to identify any information that could be a potential risk to your business. On the contrary, integrating Robotic Process Automation pulls information from several sources, validates it with the present data on file, and presents a report to compliance managers to check whether the client is at risk or safe.

Account Reconciliations

One of the most prominent use cases of RPA for finance is “Account Reconciliation” and “Intercompany Reconciliation.”

This process occurs at regular intervals, whether daily, weekly, monthly, quarterly, or yearly. Regardless of what type of reconciliation is conducted, it needs precise attention to detailing and data collection.

With RPA, data is easily and precisely processed to determine whether there are any discrepancies between internal ledgers and external documentation, minimizing CFOs and finance team efforts.

Software bots notify the finance team if reconciliation must be performed.

Financial Reporting 

Financial reporting is a part of finance and accounting that finance ERP systems usually take care of.

Finance automation does not replace this tool; instead, it complements it by eliminating the remaining manual processes like journal entries and external reporting. Even the precise financial automation solution helps streamline the financial process from initiation to completion, allowing teams to pace up workflow and remove the need for manual data entry.

To put it all, financial automation is not merely another IT project. Instead, it should be a standard feature in any company’s business transformation plan or digital strategy.

Undoubtedly, CFOs’ role is evolving, and it is becoming increasingly apparent they will need to board the innovation train. 

Furthermore, market estimation supports the fact that finance executives and CFOs are more curious to automate their processes. Especially in the case of Finance and Accounting outsourcing, 47% of the CFOs belonging to the buying organizations consider automation competencies a crucial capability.

Here’s A CFO’S View on the Future of Financial Automation  

Today’s Chief Financial Officers (CFOs) is experiencing more and more how the automation world and process mining are becoming intertwined. Simultaneously, they are equally interested in how the amalgam of these two technologies will work to accelerate the improvement of several finance processes and accomplish higher ROI for their RPA investments.

Considering this, Gartner recently presented the results of their December 2021 CFO survey, shedding light on some very interesting insights:

  • A whopping 80% of finance leaders agree that finance must accelerate its integration of digital technology, like Robotic Process Automation and Artificial Intelligence to efficiently support the business by 2025.
  • Among several process automation and optimization technologies in financial automation, only three are expected to witness an increase in investments in the next two years – RPA, Reporting Automation, and Process Mining.
  • RPA curates as the technology most often cited by CFOs in supporting their hyperautomation core values. So, when deploying RPA, CFOs foresee investment in process mining as a key to unlocking returns.

RPA technology stats


Finally, How To Automate Financial Process? 

Once you establish an automation solution, it should run smoothly, right?

But, before adding a new solution to your toolstack, you need to do some homework. The main steps to transform your manual financial processes to automatic starts from:

Defining Your Processes

“Outlining your processes” is the first and foremost step. Having a visual representation of your processes clarifies where inefficiencies and bottlenecks happen. And also review what aspects of the process can be automated.

Building the Workflow Digitally

Next comes building the workflow. Here, resources are assigned for each task. Besides, in some scenarios, it’s possible to eliminate any steps that don’t directly contribute to the intended outcome.

Test The Process & Deploy The Automation Solution

If everything goes as planned, you can establish the financial automation solution across your processes and organization.

But, communicate with your workforce what they will be responsible for and how the automation solution will help them achieve their goals faster and easier.

Financial Automation CTA

In A Nutshell… 

Automation, especially RPA, is cementing its footsteps to be a significant asset for CFOs.

Aside from cost reduction, RPA in finance should be considered as the next big leap for business process efficiency, improving relationships with service providers, motivating a digital audit,  and building the opportunity for a finance team that is engaged in strategic functions and decisions of the organization.

Besides donning multiple hats, the CFO continues to keep an eye on cost control, as well as address evolving market requirements with the help of a trusted RPA consultancy firm like Signity. And to retain a competitive edge, the CFO should adapt to changes in the market, and RPA is undoubtedly one of the strong levers to uphold efficiencies in the workplace today.

This Post is originally posted at Signity Solutions as A CFO’s Guide to Financial Automation – Benefits, Use-Cases & Impacts

Thanks Articlering for allowing me to post this article.


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