Three Processes Ready for Automation in Finance

In my first blog post in this series, we looked at some of the challenges surrounding Procure-to-Pay and how automating this finance function can  reduce costs, improve governance, compliance, accuracy and supplier relationships, and create a better employee experience.  In this blog, we focus on the automation of the finance process, Order-to-Cash.

Order-to-Cash is one of the three core finance process streams and has unique objectives which we address through automation. Automating components of the order-to-cash process results in optimisation and streamlining of processes, which in turn helps you turn an order into cash in the bank in the quickest possible time. Depending on your industry, automation will allow you to optimise lead times, fulfil orders more quickly, limit risk from a credit perspective, shrink your debtors' book, and optimise your working capital.

Order Management

Potential benefits: quicker processing times, better employee experience, better customer engagement

Traditional mechanisms, by which orders are emailed or faxed (don’t laugh, it still happens!) are laborious, time-consuming, and divert your employees from value-adding tasks. By automating sales orders, they can be processed more quickly and accurately, which means you’re getting to the point of fulfilment sooner. Automating sales orders and quote generation streamlines the process, unifies channels of engagement, and frees your employees to focus on customer relationships and customer profitability analysis.

Automating communication around the fulfilment cycle and order status updates also gives better visibility internally around where a specific order is and when employees should follow up with customers, improving your customer engagement.

Order routing

Potential benefits: increased productivity, improved accuracy, better customer experience

Traditional order routing requires intensive back-office activity. When your employees receive an order, they need to check if it aligns to pricing catalogues, and verify that products are still valid, available and relevant. Consider stationery: each month an order is placed, and because it’s routine, possibly it doesn’t always get verified to the extent it should. At some point in time the validity of that order needs to be checked, and that can be quite an intensive exercise, going line-item by line-item, and ensuring the requisite approvals – possibly from different departments – take place timeously.

Automation streamlines that process, increasing productivity and removing human error. It also improves your customers’ experience: instead of having to wait three days to get feedback on an order, they can receive it in minutes. And if there are issues the bots can’t handle, the function of the employee who used to be checking lists is elevated, leaving them free to take a more hands-on approach to customers and issue resolution.

Invoice management

Benefits: better employee experience, reduced cost

Invoice management is an area which already sees some level of automation. But optimising the timing of this automation – making it proactive instead of reactive – can yield substantial further benefits. Automated generation of invoices, followed by automated collection by a bot that understands payment terms and can proactively follow up on payments before terms are breached, improves the collection of cash.

In our work for a customer in the insurance industry, by automating their follow-up on collections we were able to reduce their staff complement in the function by 70%, freeing them to pursue more value-additive tasks, and saving the customer significant cost.

Credit management

Potential benefits: risk reduction

Automating the procurement cycle can reduce the risk of dealing with bad suppliers. Late payments often slip by if they don’t form a recognisable pattern. By automating the process, more accurate risk profiles can be generated, and customers can be ranked from a credit rating point of view, without the risk of human bias skewing the appraisal.

Streamlining administrative complexity, saving time

Potential benefits: quicker processing times, better employee experience, better customer engagement

Back-office, administrative functions tend to be labour and time intensive. A manufacturer might need to perform daily reconciliations amongst various bank accounts needed to operate across several SADC countries. A dedicated team might be needed to accomplish this and allocate payments to the ERP. Automation can take that function out of people’s hands entirely, allowing that team to be given something more valuable to do. Robotic process automation can take entries from bank statements and update the ERP, highlight discrepancies and short payments, and raise those individually with the applicable manager for resolution.

It’s all about value

Finance process automation enables finance departments to increase operational efficiency; streamline manual processes to improve operations and reduce costs; enhance timeliness; accelerate financial processes to provide timely information for business decision-making; strengthen governance; tighten controls to improve accuracy and compliance with regulatory requirements; empower human capital; and make your human workforce more productive and focused on value-added activities.

In my next and final article in this series, we examine how automation can streamline the finance function of Record-to-Report.

By Johan Du Preez

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