The past two years have been a unique experience for the finance and accounting sector, pushing leaders to become more creative and explore a range of different approaches. Accordingly, we have seen teams adapt at scale and pace to mitigate the worst impacts of Covid on the interconnected financial system and the broader economy.
But the roadmap to recovery will hinge on the sector developing even greater reserves of resilience in the months ahead. As business models continue to be modified and rebuilt, automation and AI are coming to the fore as drivers of transformation, enabling businesses to obtain higher levels of efficiency and intelligence. So, how can F&A leaders adapt to this change and leverage technological advances to address current challenges?
It’s a people thing
Finance and accounting are at the heart of all business operations – but so are people. And as organisations continue to try and attract the best financial talent, hiring and retraining the right people is proving challenging. To remain globally competitive post-Covid and post-Brexit, finance leaders must prioritise the upskilling, reskilling, and retraining of existing staff, while the wider business accelerates and expands its recruitment drive.
The issue is being made more apparent by recent spikes in levels of staff absence. In January, the Omicron variant caused the highest percentage of absences across the UK’s private sector since at least June 2020, shrinking the world’s fifth biggest economy and leaving many F&A teams in the lurch. As many finance departments still operate with silos of data stored in different information systems, or with different people, just one employee off work for any reason can spell trouble for the organisation at large.
Fortunately, the right solutions are there to remove this management headache and support the teams on the ground. Enterprises are increasingly looking to automation to relieve the pressures of time-consuming processes and reports and free up teams to focus on more rewarding strategic endeavours. Automation can also ensure the rapid setup and ongoing management of client and customer accounts, timely billing and robust cashflow, providing a lifeline for teams currently struggling with backlogs.
When it comes to automation, the figures back up the promise: almost three-quarters (70%) of employees from highly automated companies say that it has improved opportunities for professional advancement while freeing up resources and time for more creative tasks. At a time when employee wellbeing is fast becoming a strategic priority, the workplace satisfaction produced by automation is as important as any time and cost savings achieved.
Some problems, however, long precede Covid. The accounts payable industry has historically been highly paper-hungry: invoices and payments still tend to be processed in paper format, leading to hours of manual labour and heightened scope for costly errors and fraud risks. As fake invoices are hard to detect when companies are reliant on paper-based processes, the threat posed is substantial – targeted companies face a median loss of $100,000 (£74,000).
The sustainability imperative currently on many corporate agendas is increasing the urgency with which this issue must be addressed. The time has come for finance departments to let go of outdated paper-based procedures and embrace automated invoice processing. Not only can teams benefit from greater process efficiencies, cost savings, improved compliance, and faster invoice and payment approval times, but the wider business can develop essential protection against accounts payable fraud.
The next normal
The uncertainty of the past few years has placed a laser focus on the importance of business continuity and ensuring the liquidity needed to support ongoing operations. But cash management is a companywide endeavour: it can take days, weeks, or even months to put together an accurate cash forecast that helps businesses determine whether they need to invest or borrow.
Liquidity is now a priority for all businesses. As we emerge from the worst of the pandemic, an economic boom is predicted, with almost three quarters of UK businesses prioritising growth in the next year. Opportunities abound for finance teams eager to drive this growth; they just need the correct tools.
This is where automation and machine learning come into play. Automated systems make quick work of enabling faster cash movements and pre-empting future trends. As accounts payable matures with the emergence of more agile analytics, automation can digitise manual, error-prone processes, driving performance gains and allowing teams to get a clear picture of future cash, cash positions, and cash flows.
The role of automation as a key driver of post-pandemic profitability is clear: a recent study even found that it adds £14 billion to monthly business revenue in the UK. Organisations keen to build resilience, create efficiencies, and foster long-term growth should now invest in the right automation solutions by forming strategic partnerships with leading providers of business process services. By embracing the fourth industrial revolution and integrating automation into daily operations, finance and accounting leaders can empower their teams to work smarter and faster while driving efficiencies.
By Nick Peplow, solutions director – Finance & Accounting, Liberata