28 Apr

Why Automation has a Key Role in Finance

Why Automation has a Key Role in Finance

The remarkable growth of Information Technology has ensured its impact on every sphere of business. This has compelled organizations to recognize the significance of automation when it comes to achieving growth and expansion. It comes as no surprise then that the domains of Finance and Accounting have also been influenced by automation. This is apparent by the fact that most of the core financial processes have been automated to large extent. Yet, automation has mostly been deployed to the level of transaction-based calculations rather than the whole process of accounting.  However, the disruptive technologies are gaining ground and, the evolution of innovative application coupled with the advent of cloud technology is all set to rejuvenate the status quo. We are set to experience a new era in Finance where every component in a financial process, like half-yearly or annual closing, will be sequentially linked with primary tasks like balance sheet, P & L Statement, etc. This will enable total visibility along with seamless control leading to high-levels of accuracy and integrity. When financial operations are streamlined through automation, increasing transactional volumes can be handled more efficiently. Some of the many such affects of automation are discussed below-

Automated Accounting System

Transparency:

When accounting process is automated, transparency in essential tasks like receivables and payments can be maximized.   This can also be effective when it comes to maintenance of audit trails, which can be more accurate and complete.

Integrity:

Automated accounting system may not just help in keeping the records up-to-date, but will also eradicate duplication and redundancy. Data integrity can be maximized when critical reports like income and expense statements can be more synchronized.

Challenges In Making Financial Report

Security:

With minimal paperwork, all important information can be stored digitally and secured through various information-security management systems.

Reliability:

Vital information on depreciating assets and balancing of multiple bank accounts can be managed with much more consistency, leading to accuracy and reliability.

Efficiency:

Automation increases the through-put of transactions, leading to reduction in transaction-processing costs, and also allows maximum compliance to rules and regulations.

Small and Medium Enterprises

Conformance:

Automation of financial and accounting domains can improve control mechanisms like segregation of tasks, workflow approval, and audit logging, leading to better governance and compliance to regulatory authorities.

There is no doubt that Automation of financial and accounting will optimize cycle times of transactions to reduce costs. It will also be much easier to handle the legal issues related to financial operations. When the advantage of higher security through superior technology is added to these factors, the aspect of increasing the level of automation in finance surely sounds lucrative.

Key Takeaways

  • The crucial role of automation in guiding the domain of Finance into new era is assured. This is because the implausible advantages it offers can be simply irresistible.
  • Some of the various advantages of automation include -Transparency, Integrity, Security, Reliability, Efficiency and Conformance.