There have been a recent spate of reports, articles and discussions about the automation of the finance function and the reasons why this needs to be done. I don’t think anyone would argue with the premise. I would certainly not. But reading this material it got me thinking about what could and should be done first given the cornucopia of possibilities.
For many organisations the high degree of integration between their financial systems and lack of automation tools within these systems gives them issues with implementing many of the types of automation experts recommend. Of course, those organisations with modern, likely Cloud based, solutions will often have significant automation tools within these solutions. Whatever an organisation’s situation they have to weigh up the complexity, disruption and cost associated with implementing the automation of existing processes, and of course the benefits that think they can accrue.
Given this, and our experience at Brovanture of implementing and upgrading financial systems for a multitude of clients (both large and small, commercial and public sector) I have concluded that there is one place I would always go first to get a quick and significant win – account reconciliation.
Why do I say this? Well, unless you have already automated Account Reconciliation you are likely doing this as an offline manual process outside your current financial system. Replacing an already disconnected manual system with an automated one presents little disruption to you existing systems. I am sure you have, like us, experienced that disrupting existing systems presents the possibility of considerable risk and delay. All you need for account reconciliation are great integration tools to get the data you need and to get the results back to your existing systems. Good and modern Cloud based account reconciliation solutions come fully equipped with this functionality, right out of the box.
Account reconciliation is just about the perfect process to automate. It is fundamentally rules based and the vast majority of reconciliations should and don’t need to be looked at. They pass. Manually trawling through these to find the few you should review and then manually communication with those who can explain and make decisions is low value work. This can all be done automatically. It gets even more efficient where the system uses Artificial Intelligence (AI) to learn from the decisions you do make to then make them for you. This further reduces the reconciliations you need to look at in the future!
There are more benefits too. The rules you set will be applied consistently to every reconciliation which has to be good for governance and is going to reduce audit effort, both internal and external. One I had not thought of has been highlighted by Gary Simon, Leader of the Modern Finance Forum (https://fsn.co.uk/) is the effect on staff. Staff are not going to join or for that matter stay when they are faced with the tedious process of reconciliation! Certainly not the dynamic staff that finance departments need today. They will want to work with the analytics and AI in your new system and in other areas where they feel they are using the skills they have learnt to add real value to the organisation.
I hope I have made the point in my headline. Agree or disagree, I am happy to discuss the subject or other finance matters you would like to raise. Just contact me via LinkedIn or via the contact page on our website HERE
Until next time – stay safe and well.