Last updated on September 6th, 2021 at 03:41 pm
A lot of companies have traveled the distance from in-house talent to outsourcing for a number of functions. One of the functions that has seen these changes is finance. Instead of using regular employees, many companies have outsourced this function to dependable and efficient outsourcing companies who take care of the security of data and also carry out all the requirements efficiently. But many companies are now ready to take the next step forward by automating their finance function instead of outsourcing it, and then getting the benefits of artificial intelligence to do those tasks even better. Not all functions inside finance are easily automobile, though. Automation is a possibility only for recurring and monotonous activities which do not need too much of strategic thinking or knowledge of the company’s confidential data.
Also Read: Artificial Intelligence in Investment Banking – The Technological Revolution
These are the finance functions which lend themselves easily to automation :
Bookkeeping and Accounting
For a human resource, this can be a very monotonous job to keep track of assets, liabilities, receivables and payables on a daily basis. Worse, this is prone to human error if it is done by company’s own resources or by outsourced agencies. Using the accounting principles accepted in the country of operation, the accounting activities of regular bookkeeping and doing reconciliations can easily be done by an automated program that draws inputs from the company’s connected systems, and produces outputs on daily, weekly and monthly basis.
Payables and Receivables :
If a company can centralize and automate the work of generating invoices and receipts for payments due and payments received, then the accounts of such amounts can also be easily automated. The tool that is used to do this can also be set up to validate and self regulate the system so that double invoicing can be avoided, and all receipts are accounted for. The respective managers in the department could also generate daily or weekly reports to keep track, or they could set up the tool to automatically generate a notification or a report when any document is created for payables or receivables.
Salaries and Commissions
Salaries are usually the easiest to automate, because the database of employees and the preconditions for specific heads of the salary can be programmed once and don’t need to be tinkered with again till a person’s salary undergoes a change. The more difficult part is to incorporate the variable part of the salary into the final output, because such variable payouts could be dependent on a number of dynamic factors, and in some cases, might also be discretionary. But whether fixed or variable, an automated tool can easily take care of the calculations, generate salary and commission statements, and also send a payment advise directly to the bank, so that the money can be transferred to the employee or partner’s account or a cheque can be created.
Transaction Audits
There are some repetitive financial transactions that need to be audited by internal or external auditors every quarter or at least once a year. Such transactions offer a good potential of being automated. The reason is that they are usually in large numbers and can be automatically vetted on a daily basis or even real time as they take place, instead of waiting till the end of the month or quarter. And the risk of human error can be completely done away with by automating those tasks. The audit of the judgemental parts of finance functions, which involve correct interpretation of company rules or federal laws, can be left to the traditional auditors.
A number of functions are going in for the benefits of automation, and there is no reason for finance to get left behind. The only need is to correctly identify which parts can be automated with no risk attached.
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