What is finance automation?

Sound financial operations are critical for a growing business—especially when it comes to efficient, accurate control over the company's cash management. 

At today's salaries, a company of just 20 employees could easily be responsible for a million dollars in annual payroll—that's more than $80,000 paid out in wages alone each month. Unfortunately, the cash needed to cover wages and other expenses doesn't always come in at the same time.

Customers may pay invoices late. A cyclical business might see lower revenues during certain times of the year. A good finance team plans for these challenges and more, making sure the company always has enough cash to cover its financial obligations.

Finance automation helps modern accounting and finance teams improve cash flow control by increasing efficiency, minimizing errors, and providing more visibility into a company's cash inflows and outflows. 

How? Through cutting-edge advancements in new technologies like artificial intelligence and machine learning for finance processes.

What is finance automation?

Finance automation uses computers to accomplish routine financial tasks that were traditionally carried out by hand—accounting, budgeting, sending invoices, paying bills, and more. It aims to improve efficiency, accuracy, and productivity in financial operations by reducing manual tasks and human error.

Finance automation is not intended to replace a talented finance team. Instead, it takes manual processes like repetitive journal entries, bank reconciliation, or the production of financial reports and financial statements and automates these functions.

This gives finance and accounting teams more time for other accounting functions, such as financial planning and financial analysis.

What is finance process automation?

Finance teams perform a wide range of finance and accounting processes—managing payments, producing financial reports, measuring performance, and so on. Financial process automation uses computer technology to automate these financial systems by entering invoice payments, flagging late payments, and performing other finance functions.

Finance teams also apply set rules or processes to given financial systems. For example, the manual process for handling a bill might be to add the new invoice to a stack on a desk, then go through the stack and email department heads to approve those invoices, gather delayed approvals by wrangling busy executives, and (eventually) pay the bills—not to mention the manual tasks of entering each step in an accounting system.

Financial process automation improves operational efficiency, accuracy, and internal controls by applying these rules and performing these finance functions automatically.

In practice, the terms "financial automation" and "financial process automation" are often used interchangeably. While the latter is focused on processes, intelligent automation technology and finance automation solutions are generally designed to automate both finance tasks and processes.

Business process automation vs. robotic process automation in finance

Business process automation (BPA) and robotic process automation (RPA) are both valuable tools in financial management.

Between the two, RPA is more narrow. It focuses on automating repetitive tasks using software robots or "bots." Need to add up column after column of numbers? Or repeatedly copy a number from one form to another? RPA is perfect for these tedious tasks.

BPA is broader. It includes streamlining and automating more complex tasks. Do you need to apply approval rules to a new invoice, figure out who needs to sign it, and send each of those people a notification? That's BPA. 

While BPA encompasses a wider range of more complex processes for finance departments, RPA excels at automating specific tasks and financial functions that require minimal human intervention. 

What finance processes should be automated?

In an ideal world, any finance task or process that does not require human intelligence should be automated. Accounting software automates some tasks, but that only scratches the surface of what's possible through the combination of AI, the cloud, and other digital technologies.

By reducing manual labor, advancements in technology can help finance teams free up time for more critical tasks, such as strategic planning, assessing financial risk, improving financial performance, capital planning, and other key business decision-making.

Below are some of the key areas in which application-based automation can improve the accounting process and apply internal controls automatically.

Accounts payable

Automating accounts payable can include:

• Reading and entering invoices with optical character recognition technology
• Matching invoices to purchase orders
• Automatic creation and notification of requests for approval
• Capturing those approvals
• Sending approved bills for digital payment
• Automatic sync with accounting software for easy payment reconciliation

Surveyed BILL customers report saving, on average, 50% of time on accounts payable using BILL Accounts Payable.*

Accounts receivable

Automating accounts receivable can include:

• Streamlining customer onboarding
• Checking for accurate quotes
• Automatically turning quotes into invoices
• Sending invoices immediately upon job completion
• Checking for late payments and sending payment reminders

66% of BILL customers report that with BILL Accounts Receivable, they get paid at least 2X faster.*

Spend and expense management

Automating spend and expense management can include:

• Corporate cards with budgeting software built right in
• Automated credit control processes
• Proactively managing business expenses and budgets
• Automating expense reports and the approval process

BILL Spend & Expense is the all-in-one expense management solution that provides you with real-time visibility and customizable control over your business finances.

What are the benefits of finance automation?

1. Time and cost savings

Finance automation eliminates the need for manual data entry and repetitive tasks, allowing finance teams to focus on more strategic initiatives. This can save hours upon hours of time while also reducing the costs associated with manual errors.

2. Improved accuracy

By automating financial processes, the risk of human error is significantly reduced. Automated systems can also help finance professionals perform calculations, reconcile data, and generate reports with a higher level of accuracy, minimizing the potential for mistakes.

3. Enhanced compliance

Compliance with financial regulations and standards is essential for any business. Finance automation ensures that all financial transactions and processes adhere to regulatory requirements and internal controls, reducing the risk of non-compliance and associated penalties. It can also include automated audit trails.

4. Real-time visibility

Finance automation enables real-time monitoring and reporting of critical financial data. This provides management with instant access to financial information, allowing for quicker and more informed decision-making in both traditional and remote workplaces.

How to set up automation in finance

Getting started with finance automation will require some pre-work, including reviewing existing processes and researching available automation solutions in the market that best fit your business needs.

Step 1. Assess your current processes

Before implementing finance automation, start by evaluating your organization's current financial processes. Identify areas that are time-consuming, error-prone, or inefficient. This assessment will help you determine which processes can be automated for maximum impact.

Step 2. Choose the right tools

Research and select finance automation software and tools that align with your organization's specific needs. Look for solutions that offer features such as invoice processing, expense management, digital payments, and budgeting capabilities.

Step 3. Integration and data migration

Make sure the finance automation tools you choose can seamlessly integrate with your existing accounting software or enterprise resource planning (ERP) systems. Plan for a smooth data migration process to avoid any disruptions during the transition.

Step 4. Training and change management

Provide adequate training and support to your finance team to ensure a smooth transition to the new automated processes. Change management strategies, such as clear communication and involving key stakeholders, can help overcome resistance and streamline the adoption process of finance automation.

Step 5. Continuous improvement

Finance automation is not a one-time implementation—it requires continuous monitoring and improvement of finance operations. Regularly assess the effectiveness of your automated finance processes, gather feedback from employees, and make necessary adjustments to optimize the system's performance.

BILL as a financial automation solution

BILL makes it easy for business owners and finance teams to automate financial operations.

Start your finance transformation by automating accounts payable, accounts receivable, spend and expense management, or all three. Request a demo or start a risk-free trial today.

*Based on a 2021 survey of over 2000 BILL customers