Maximize Your Finance Team’s Productivity With Automation
FP&A productivity has only increased by 2% in the last decade. One of the most common ways a finance team’s efficiency is stifled is their continuation of trudging through manual tasks. Among these manual tasks is copying and pasting between spreadsheets. A recent APQC survey showed that FP&A participants reported spending 75% of their time gathering data and administering finance processes, instead of conducting financial analysis and strategic planning.
Gravitating towards increased automation of traditionally manual FP&A tasks is among the most effective actions a finance team can take to increase their productivity. Automation has been driving greater efficiency, accuracy, and compliance in finance departments for several years. It eliminates the time previously spent by finance teams grinding through endless spreadsheets, and reduces the number of manual controls, reporting errors, and operational costs of the finance and accounting function.
That said, there are two main areas of improvement that come from automation in finance; which are improved efficiency and accuracy across different tasks handled by FP&A professionals.
Efficiency From Automation
The rich range of finance automation technology has sped up many accounting processes. Previous multi-day transactions are now instantaneous, and real-time financial data can be used to inform business decisions. This has resulted in a huge increase in a business’s efficiency.
Moving from manual processes to automated ones can assist a finance department in the performance of its core functions. However, this doesn’t mean firing the FP&A team and handing things over to a sentient Excel sheet. Automated finance systems simplify the FP&A process via standardized complex processes. The result is no longer having to deal with traditionally manually tasks account reconciliation and variance analysis; an automated process takes care of this when a system is implemented.
Accuracy From Automation
No matter how great a finance team may be, they’re still only human (meaning prone to mistakes). Some estimates suggest around 80% of manually generated Excel sheets contain mistakes or gaps in information. So out of a random sample of five worksheets, just one will be accurate.
To further illustrate the scope of disaster from human errors that occur in complex financial models:
A spreadsheet mistake in October 2003 required Fannie Mae to restate its unrealized
gains by an amazing $1.2 billion—shortly after it had announced third-quarter
earnings. In another case, a simple spreadsheet error caused a company’s stock price
to tumble so dramatically that trading was halted. Unfortunately, errors like this exist in a high percentage of business critical spreadsheets.
Automating processes reduces the scope for such errors, which evidently have proved time and time again to be ever so critical.
Other Benefits From Automation
Automating different processes also leads to improved consistency and security. Despite widespread best practices, many finance team members have their own ways of doing things. Even standard processes such as double-entry bookkeeping can differ between people. For obvious reasons, automating processes creates greater consistency within teams, as it reduces the chances of mistakes and information gaps.
Security is another benefit, and concern which can unfortunately be overlooked. As much as an organization may trust the individuals in their finance team, the temptation to commit fraud is just too great for some people. Automating standard finance tasks makes things a lot more secure, as the software systems which provide automation offer a level of enterprise grade security which an organization doesn’t get from just using spreadsheets.
Choosing the Right Path to Implement Automation
Every organization can save their finance department huge amounts of time and stress by implementing automation in traditionally manual processes. Companies like CashWeb Community, Pureshare Activemetrics, and DataRails offer some of the best software that automate processes for finance professionals.