By and large, digital transformation adoption has been relatively slow within the financial space. Even though an increasing number of consumers want a modern digital experience from financial workflows, many senior leaders are still hesitant to pull the trigger. Part of the problem comes down to money. Given the price of automation, budgetary constraints aren’t uncommon and get in the way of digital transformation in accounts payable—a function too often stuck in the dark ages, relying heavily on spreadsheets and manual tasks.
If it’s not budgetary concerns, then it’s a question of man versus machine. The manual aspect can give off the illusion of greater control, and finance teams are generally seen as more capable and intelligent than a computer program. Why invest in technology when that technology handles responsibilities already being taken care of by competent employees? Besides, finance leaders are, well, finance-oriented. Trying to weigh all the available options can lead to uncertainties and, in many cases, analysis paralysis, putting digital transformation in accounting and finance on the back burner in favor of other initiatives.
Human beings fear change, and finance professionals are no different. Any change to the finance function brings a justified fear of creating a less efficient workflow, made even worse by the undeniable discomfort of learning new workflows and processes. Not only are you overhauling the finance tech stack, which can already seem daunting and overwhelming, but you’re also asking an entire team to approach work in a completely new way. Many CFOs feel their employees are not equipped to work with automation.
With time and training, however, employees will learn and adapt to what the technology has to offer, and those digital transformation challenges will become nothing more than a distant memory. You and your team will quickly find that the advantages outweigh any front-end hurdles preventing your company from making the move to automation. Here’s what to expect on the back end:
1. Limit human error. As much as CFOs might prefer to maintain a human touch, they don’t fully appreciate the impact automation can have on their teams, workflows and overall performance. Digital transformation in accounting and finance reduces the errors caused by human hands, providing greater control and visibility of financial data. That in and of itself can improve decision-making around everything from forecasting to strategy development—not to mention the time and money saved on rectifying mistakes. This is a critical benefit, as Tessian found that human error is the cause of 85 percent of data breaches.
2. Increase efficiency. AP departments can increase overall efficiency by automating the more mundane, repetitive and error-prone processes. With automated processes in place, something like the month-end close, which can take days (if not weeks) to complete at some companies, can get done in a matter of hours. The top automation solutions even offer the functionality for vendors and suppliers to onboard themselves via self-service portals, where they can input their information and check purchase order statuses.
3. Minimize headcount. Although automation doesn’t necessarily mean cuts to the team, it can streamline the AP process and eliminate the need to hire additional employees to complete the manual, repetitive tasks of the finance function. In fact, 44 percent of employees surveyed by Zapier said that automation software saved them time, while 43 percent said it helped them finish tasks faster.
4. Focus on value-adding activities. Think about the time and energy spent collecting, entering and validating data. At many companies, such tasks can take up as much as half of a team’s time—leaving little to no room to properly analyze the information. By eliminating these mundane, manual and time-consuming workflows, finance teams can direct their attention and talents to more value-adding initiatives on a companywide level. This better positions the finance team to be more productive and strategic within the company.
Digital transformation in accounting and finance has become a necessity, especially with the evolving role of the finance function. Today, finance teams are tasked with more than back-office responsibilities. They’re now brought in to provide strategic insights into the company’s overall direction.