Businesses have always been dependent on the financial side of their organization. The generally accepted way of managing finances started to shift with the advance of automation and digital technologies.
Artificial Intelligence (AI) data analysis and automation of transactions are not a trend but a necessity. Automation of those processes allows companies to focus their attention on other aspects of business and frees up employees’ time.
They can focus on delivering value instead of keeping track of invoices, expense reports, or regulatory norms.
In this post, you will learn the best practices for 2024-2025, pitfalls to avoid, and why financial automation is important in today’s business landscape.
The Current State of Financial Automation
The current state of financial automation is in the early stages of adoption. For example, Canada greatly exceeds Western countries in financial automation. About 35% of Canadian companies currently have more than half of their financial activities automated.
The share of companies adopting automation technologies is steadily climbing, according to a McKinsey Global Survey on the topic.
Most companies believe that they will be able to automate about one-quarter of manual financial work in five years. Every fifth company claims they’ve successfully implemented financial automation in various processes within their organization.
Financial services companies, such as the Nairobi Securities Exchange, have been leading the way in adopting financial automation solutions since 2006.
They first started using them to automate tasks, including reporting and analysis, pricing stocks, and risk management.
As for Latin America, Brazil has seen strong growth with local vendors offering solutions that meet specific needs within their domestic markets, such as fund administration or overdraft management services, which require extensive customization due to regulations surrounding these activities.
Brazil has also successfully implemented the PIX system for instant payment systems.
Automation of Finance Operations
Here are the trends that will dominate in the financial industry in the next few years:
You cannot automate all manual processes. However, it can shift some of the time spent on unnecessary manual labor into more productive activities, such as standardization and internal policy development.
A financial project management system can increase the speed of completing various tasks. For example, by developing a web portal, you can create a single source of truth for different financial tasks such as budgeting or forecasting.
With financial tools, you will be able to tell what needs improvement faster than it causes huge financial losses.
Automation of Finance Workforce
Automation will drastically change the way organizations distribute and manage their financial workforce. Here are several trends responsible for this change:
Organizations will still need human staff for programming, coordination, and new model development. Employees will have to learn new tech skills to keep up.
Automation of Business Models and Strategies
The first thing to do is to evaluate your current financial business model and related processes. Outline the areas of finance that need improvements and whether automation will help you solve your issues.
Choosing the right tools and software is also critical for successful automation. Look for solutions that fit your budget, can be customized and integrated, and provide analytics.
After settling on tools, it’s important to set up your workflow and process. You might need to implement staff training for your new financial system. Get your system tested and reviewed for its efficiency. An automated financial system will:
Even the best financial models and systems need adjustments and updates. Don’t hesitate to contact experts in financial automation if you want to improve your business system.
By analyzing multiple data sources such as ERP, new financial models with automation can optimize your business, reducing costs and improving performance.
Final Note
Financial automation has become a crossroad for many organizations. With an increased number of businesses willing to automate their financial processes, you won’t be alone walking on that road.
The switching phase can be intimidating at first, but the benefits of financial automation are worth it in the long run.
