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Financial reports are similar to your yearly physical from a doctor. The numbers tell you if you are healthy, on track with your goals, and where you need to start paying closer attention.
But what if you had some doubts about how your doctor came to those conclusions? What if you saw the nurse mistakenly write down the wrong blood pressure number on your chart? What if you found out that the blood work lab had mixed up a few vials in the past?
Could you still trust the reports? How would you know for sure if you were healthy?
In the same way, to be able to fully trust your financial reports, you need to be able to completely trust your financial processes. Without airtight processes, you’ll find mistakes and errors that can set everything off.
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What Are Some Common Financial Processes?
Many processes that go into showing the financial health of an organization. Some of these include budget approval, capital expenditure, travel reimbursements, and expense approval. Additionally, there are processes for creating profit/loss reports and many others. For smaller companies, some procurement processes like purchase orders and purchase requests might also be handled by the finance team.
What’s the Difference Between Manual and Automated Processes?
When you handle your processes manually, every transfer of data happens by hand. For example, the sales reports from the previous quarter are put on a spreadsheet and emailed to someone. That person then copies and pastes them into a database and then generates a report.
Or take capital expenditure. If someone needs to make some large purchases for the office, they might send an email to a few people and wait for approval. Then, they forward the email onto the next person to show they have the authority to make the purchase.
When processes are handled manually, you leave yourself open to a lot of holes. Manual data transfers are slow and prone to error. This can lead you to question how effective your financial reports are.
Why Finances Are Stuck in Manual
Most business owners can recognize the benefits of automation. However, organizations continue to handle things manually for one of these reasons:
1. Manual Seems Easier
Why would I resort to something as complex as automation when I can just as easily fill out forms by hand and enter in the information on my own? The problem with this line of thinking is that it’s actually much harder to handle processes manually than you think. It only seems easier because you’ve always done it that way. It’s actually much easier to process items automatically. That’s because you don’t need to think about who gets the data next.
2. Manual Seems Like More Control
Other leaders like to stick with manual because it gives the illusion of control. If you are the one who sees every digit that goes across the screen, then you can vouch for the accuracy of the data, right? This may be true on a tiny scale. However, once a company grows to any size, the amount of data becomes too complicated to try to control on your own. Better control actually comes from automating a system that can handle everything.
3. You Can’t Find Software That Works Exactly Like You Want It To
Perhaps you’ve tried an automated system in the past. However, it wasn’t flexible enough for you. Or it was too expensive. When handling financial processes, each company has its own way of handling even common processes. Therefore, you have to work with a system that works for you.
The Big Reason Why Automation Is the Better Deal
By shifting to automation, you get a lot of benefits. Your processes run faster, you get fewer errors, and you have better communication. In short, you have less chaos in general.
But there is one big reason why every business owner should prioritize financial process automation: risk mitigation.
Handling your financial processes manually is a huge risk for your company. By having so many people responsible for transferring data around, you can almost assume at some point there will be some significant mistakes. You can’t trust the reports you base your decisions on. You are left wondering what to believe.
When you use automation, you are identifying all the potential areas where something could slip up or pass through the cracks. Automation allows you to give these important tasks to a system that will always perform it exactly as you want, every time.
Automation also allows you to set up integrations with your other systems. Then there’s no need to wonder if data transfers were handled correctly by a human. They are processed right away and without any errors.
Automation reduces risk and lets you have more confidence in your systems and reports.
Smart Businesses Run Automated Processes
Your financial business processes are extremely important to everything you do at your business. You can’t afford to doubt their efficiency and accuracy. If you continue to use manual processes, you are opening yourself up to significant risk. Therefore, you might not be able to make the best decisions.
Your best bet is to find an easy-to-use process automation platform that allows you to design your processes your own way. Then you won’t have to try to fit your processes to someone else’s template. Find an automation tool that works for you. Then start acting with confidence as you lead your business forward.
About the Author
Neil Miller is the Creative Services Director at OrangeScape, makers of KiSSFLOW. He loves to hear new ways that organizations are streamlining their processes. Neil spends his free time thinking about the coming automation onslaught, self-driving cars, and the human-computer symbiosis.