Automation is the best friend of productivity, the former unleashing the latter. Despite this being well known and applied throughout many industries and job functions, very little of an accounting department’s work is automated.
Currently, only 12% of organisations have substantially automated their core financial and accounting processes, according to leading research company Ventana. 37% of large enterprises and corporates still have primarily manual finance processes in place, leaving accounts staff with spreadsheets as their best (and often only) option to accomplish complex accounting tasks.
By ignoring automation, these companies are missing out on potentially huge time and cost savings. For example, looking at just one function: more than half (56%) of large and mid-sized enterprises that automate account reconciliations close their books within six working days, with 30% closing within four working days, much faster than competitors still using manual processes.
The adoption of ERP systems in recent years has helped many organisations to improve core business processes, but a large majority of these systems are not specialised and have not been designed with an accountant’s workflow in mind. Despite the market beginning to respond, there are many finance tasks remaining which could benefit from automation.
To this end, a new class of application has emerged, which not only fills the gaps left by larger, more all-encompassing ERP providers, but dramatically improves the way key financial processes are undertaken, leaving accounts teams with more time to focus on the things that matter. Gartner has already taken notice of this new product group, finding it sound and needed – and to address this, has created the new software category ‘Enhanced Finance Controls and Automation’ (EFCA).
In the case of BlackLine, our EFCA platform provides multiple solution packages such as ‘Financial Close Management’ – complete automation of the financial close, ‘Intercompany Clearing’ – designed to assist companies with large volumes of internal transaction data, ‘Controls Assurance’ for automated workflow around internal controls, and ‘Reconciliation Management’ – standardisation and automation of all types of reconciliations.
All are designed to fit with existing ERP provisions, covering specific financial processes, and are highly secure, providing finance teams with immediate access to their data.
Automating key financial processes to better run organisations is more important than ever before. The world seems smaller and our organisations and business processes are becoming infinitely more complex. Companies are also dealing with huge streams of internal and external data – literally tens of millions of data sets clogging the Internet, and the larger the company, the more data.
Managing enterprise performance or making an accurate forecast in this environment is almost impossible when tasks are undertaken manually.
Furthermore, as companies widen their global footprints, undertake far-flung acquisitions and create multiple corporate entities, they end up with numerous and disparate ERP, CPM, GRC and BI systems, some on-premises, some in the cloud. The end result is a complex range of tools and systems that somehow finance departments must navigate. Perhaps most worryingly, this is occurring at a time when international regulations are accelerating, becoming increasingly complicated and painfully punitive. Nobody wants another accounting compliance scandal, particularly one stemming from a botched spreadsheet.
There has to be a better way, and there is. Technology – namely EFCA software – is the solution, substituting predictability and continuous improvement for risk-prone and repetitive manual processes. It is what we are referring to as ‘Modern Finance’ – managing core accounting and finance processes to the fullest degree of automation possible, especially when it comes to rote clerical tasks.
At its core, Modern Finance embeds the automated analytics, risk mitigation and deep reporting capabilities across all these processes.
Now that platforms of this type are in the marketplace, finance teams of large corporates are in a position to focus on strategy not spreadsheets. Instead of being left behind by technology, they can use technology to bring accounts to the highest levels of efficiency and control, to gain a digital edge and ultimately, to enter the future of modern finance.
by Therese Tucker, CEO, finance controls and automation software leader BlackLine