Automating Finance Part 2: How Automation Helps Finance Achieve Critical Business Goals

October 14, 2021

11 min read

Picture of Certify Team

Certify Team

In the first post in this series, we went over how today’s Finance leaders and teams have to get more comfortable collecting, curating, and analyzing their data than ever before. We also explained how automation helps grease the workflow wheels and keep expense managers and AP teams humming along.

Let’s spend some more time on the topic of process automation, and how it can help your Finance team consistently achieve key business goals.

Automation is easier said than done

Most organizations recognize the need for more automation. Manual processes make it difficult for finance teams to effectively analyze and use data insights to drive better decision-making. Legacy finance and spend management solutions are error-prone as well as time- and labor-intensive.

Everyone knows this. That’s why many companies have already upgraded to ERP solutions. Yet more often than not, these companies continue to struggle with tedious manual workflows for expense management and reporting.

Sometimes, it’s because their out-of-the-box “automated” solutions are not a great fit. They require endless customizations and workarounds, which merely introduce new inefficiencies. When all is said and done, they turn out to be more trouble than they’re worth.

Other times, a new system comes with all the bells and whistles Finance teams need to greatly increase efficiencies, but they need to figure it out for themselves. Ultimately, these products are never used the “right” way, and teams never get to experience the full impact of customized process automation.

That’s why Emburse asked Forrester to find out how finance organizations are managing expense automation in the 21st century. Forrester surveyed 311 global finance decision-makers responsible for expense management and reporting. They discovered that finance teams forced to rely on outdated legacy systems and manual workflows for expense management experience an array of operational inefficiencies that can significantly impact their bottom line:

  • 71% of surveyed finance teams reported decreased visibility and access to data.
  • 63% experienced decreased employee productivity, adoption, and satisfaction.
  • 58% reported increased costs for Finance that can bleed into other departments.
  • 51% are held back by decreased process efficiencies that lead to bottlenecks.
  • 46% must deal with poor employee experiences that further reduce productivity.
  • 42% suffer from excess and out-of-policy spending (e.g., waste and/or fraud).
  • 38% wrestle with inaccurate analytics and unreliable reporting.
  • 32% deal with increased expense and transaction errors.

Some of these manual expense management problems are different sides of the same coin. They can be grouped together into four main issues: Inaccurate data and decreased visibility, decreased process efficiency, low employee productivity, and increased expense errors. Let’s take a look at each of these problems and how they can impact your organization.

Inaccurate data and reporting result in decreased visibility

As we discussed in Part 1 of this series, high data quality and insightful data analysis mean everything to modern finance leaders and their teams. To really stay ahead of the competition, finance leaders must embrace data-driven decision-making and be more comfortable advising the C-suite in more of a strategic role.

Overly manual processes lead to disconnected systems and siloed teams that don’t communicate often or work well together. This leads to frequent inaccuracies, omissions, and data security concerns. Survey respondents that continued relying on manual systems reported poor data visibility, decreased productivity, increased costs, and excessive waste.

Unsurprisingly, 88% of finance professionals told Emburse that data and intelligence are critical for business success. Research suggests that scalable and automated data analytics can greatly improve workflow efficiencies, offer decision-makers deeper insights, and add incalculable value to organizations that upgrade their expense management systems.

  • 43% of CFOs believe streamlining their company’s budgeting process with data and automation is a key to long-term success (McKinsey report).
  • When Chief Data Officers get involved in setting company strategies and goals, they boost production of business value by 2.6x on average (Gartner report).
  • 97% of best-in-class expense management and AP teams view data and intelligence as critical to organizational success.

Decreased process efficiency wastes everyone’s time

Without accurate data, you can’t uncover actionable insights. And without actionable insights, nothing is optimized. Manual processes can quickly become case studies in preventable delaysthat can have major business consequences.

In fact, up to 36% of surveyed finance professionals are concerned about late payments due to payment processing delays.

Manual data entry, for example, can delay invoice processing and approvals. The average AP clerk can process just five invoices per hour by hand. Larger companies with more bureaucracy can take up to 11 days, if not more to process a single invoice. You don’t need to be a rocket scientist to know that this doesn’t make business sense.

Human labor is also far more error-prone than an automated system of 24/7 checks and balances. Everyday typos can lead to unexpected bottlenecks that seriously impact cash flow. Not to mention that long and drawn-out AP processes can lead to unnecessary delays in payments and reimbursements, which could jeopardize key client and vendor relationships.

Online, cloud-based expense management solutions allow teams struggling with endless manual workflows to build automated workflows and approvals that require fewer touch-points. This makes it easier to pay vendors on time, avoid late payments and fees, and preserve positive business relationships.

Poor employee experiences lead to lower productivity

What do you call it when a Finance or AP team spends up to half their workweek on mind-numbing manual data entry while they’re constantly worried they might hit the wrong key

It’s called a bad employee experience. You might even call it a demoralizing employee experience that lowers productivity.

According to a MineralTree survey, “non-modern teams who used manual AP processes reported spending nearly three times the amount of time processing invoices than modern teams benefitting from more automated AP, on average.”

With manual expense management, there’s also the inevitable problem of employee overspending. Without an automated compliance system that flags out-of-policy spend, employee accountability can be very difficult.

Fortunately, automating tedious and mundane tasks can lead to a host of productivity benefits. An impressive 86% of Emburse Certify customers revealed that switching to an automated, cloud-based expense management solution helped them greatly increase productivity.

Instead of wasting time and resources on cumbersome manual labor, they’re able to free up team members to focus on more rewarding and higher-impact work. In fact, modern accounts payable teams spend less time on data entry and reconciliation, saving anywhere from 5-10 hours per month.

Expense errors lead to excess spending and fraud

Unproductive employees forced to slog through repetitive and unrewarding tasks probably won’t be looking for ways to save their company money. And demotivated employees are far more likely to make mistakes. This leads to excess and out-of-policy spending and also opens the door to more pernicious behavior.

Did you know that many AP teams spend up to $10 per processed invoice (including invoices processed to train new hires)? By contrast, the most efficient, automated finance teams pay just $2 per invoice. While that might not seem like a huge difference on a one-off basis, it adds up to millions saved each year at larger organizations.

Then there’s payment fraud, which is a serious problem for businesses across the country. Manual systems will always lack the compliance controls and oversight inherent to automated expense management systems. Fraudulent charges and suspicious transaction activity will fly under the radar and can cost a company thousands (if not millions) of dollars. Expense management automation solves this problem and helps finance teams sleep easier. Companies that adopt automated expense management solutions report 81% lower processing costs and 73% faster turnaround times.

Automation empowers finance teams to drive business growth

Forrester found that today’s finance teams are still focused on the same goals they’ve always had: growing revenue and increase profitability. But doing so requires a strong data-driven decision-making culture. And you can’t foster that culture unless you give your finance and AP teams the time they need to work (and think) more strategically.

Here’s the thing: a lack of accounting, AP, and FP&A automation creates extra work for all Finance team members. It holds the entire company back and prevents you from optimizing your systems, reducing waste, increasing productivity, and realizing your full potential.

Interested in an automated expense management solution, but worried about costs and onboarding time? Take a deep breath—78% of Emburse customers who increased productivity by automating manual tasks saw ROI in under six months. And 98% of Emburse customers agreed that automating previously manual tasks allowed them to support a remote workforce.

If you want to learn more about how automation can help your organization achieve its most critical business goals, read the next post in this series: Automating Finance Part 3: How Data-Driven Expense Management Boosts Quality And Efficiency

Or read the previous post in this series: Automating Finance Part 1: Embrace Data-Driven Decision-Making to Boldly Plan For The Future