Following is an excerpt from Avalara and NetSuite’s business guide, A CFO’s Guide to Automation: Cutting Costs, Not Corners. View the full guide here.
Financial management automation is no longer a want, it’s a need. Organizations across all industry sectors understand the value of adopting technology to increase accuracy, improve governance and shorten the month-end close process. Companies that replace outdated systems with systems that provide more automation are cutting costs, reducing overhead, improving customer relationships and freeing up financial team members to focus on more strategic projects, including data analysis and financial planning.
Nearly 76 percent of companies still use processes that are either largely manual or that require considerable manual effort, according to a Deloitte survey of finance and accounting managers, directors, controllers and CFOs. Ready for a change, these finance leaders are implementing cloud-based accounting systems (36.2 percent), budgeting, forecasting, reporting tools (42.1 percent), and data analytics and visualization (39.7 percent).
“Based on the survey results, automation will become a reality for organizations once they implement these foundational systems,” Deloitte points out. Those foundational systems can automate data entry, invoicing tax compliance, check printing, expense management and other tasks that are integral to a finance department’s daily operations.
Just as it can improve operations in the warehouse or customer service departments, automation in finance can reduce the need to fill empty positions while providing a path and an incentive for existing workers to gain new skills.
“CFOs are continually looking for ways to increase capacity without having to add headcount to their teams,” said Manuel Cabral, principal industry solution advisor at NetSuite, provider of an integrated cloud business software suite that includes business accounting, ERP, CRM and ecommerce software. “Financial automation helps them achieve those goals, and more.”
CFOs want more automation
According to a new NetSuite survey*, 90 percent of CFOs who responded will use automation, artificial intelligence and fintech by 2024. Despite the current economic uncertainty, organizations are optimistic about business growth and are planning to invest in technology that supports that expansion.
Take forecasting, for example. In an era where even the best-laid plans can be completely upended by interest rate hikes or spikes in inflation, creating annual financial forecasts on spreadsheets through a manual process makes it nearly impossible to keep up with changes. “An annual plan can quickly be destroyed by inflation and rising business costs, making all of the CFO’s financial planning and forecasting pretty much useless,” said Cabral. “The bottom line is that you can’t plan for your business if you lack full visibility into what’s happening within your company.”
CFOs using spreadsheets or outdated Enterprise Resource Planning systems can’t update plans and forecasts in real time—a necessity in this unpredictable business climate. Organizations are more price-sensitive in today’s environment and can’t afford to pay out of pocket for an error-prone system. When they put automation in place, functions like accounts payable, accounts receivable, cash management, budgeting and account reconciliation become easier to manage and more accurate.
ERP systems will also give CFOs the sophisticated tools they need to automate projections and forecasts—both of which support better decision-making, including compliance-related decisions that help companies avoid costly fines, penalties or reputational damage. For example, implementing a tax automation tool such as Avalara AvaTax that calculates rates for sales and use tax, value-added tax (VAT), goods and services tax (GST), and more has helped organizations with a reduction in audit fines and penalties by 75 percent, on average.
By combining NetSuite with Avalara, financial professionals can fully leverage the power of automation within their departments and across the entire organization. A key benefit of ERP and sales tax automation transformations is the ability to inform how sales tax trends will impact the business. Detailed analysis of where the company is doing business and paying sales tax is essential in understanding how expanding to a new geography or adding new products could impact the company’s tax liability, among other key decision drivers, claims Avalara. By automating many of the otherwise manual financial management tasks—data entry, reconciliation, reporting and more—NetSuite and Avalara free up CFOs and their teams to focus on more strategic, value-added projects.