How more efficient financial management can help businesses bounce back after COVID-19

Australian enterprises have tightened the purse strings in anticipation of a tough year, but investing in financial automation can deliver significant returns.

Was financial automation on the agenda for your organisation before COVID-19 came along and disrupted the best-laid plans?

The term 'financial automation' refers to the use of software to automate many of the repetitive tasks associated with the finance function, such as reconciling accounts and producing end of month statements and reports.

In addition to slashing the number of human hours needed to complete these tasks, automation reduces the error rate dramatically, courtesy of the fact that computer programs don't become tired, distracted or bored doing the same thing over and over.

COVID-19 cutbacks

For many Australian companies, the answer is 'yes' — financial automation was slated for action in 2021, but company-wide cost-cutting means it's been put on the backburner, at least in the short term.

That's understandable on one level — delaying all but the most critical investment in ICT systems is commonplace during downturns, but it represents a missed opportunity. Financial automation frees up time spent on strategic, value-adding activities, rather than routine tasks.

As the COVID-19 downturn continues to bite, it could mean working with business leaders to keep the enterprise afloat through the lean times expected to follow in the wake of Australia's first recession in almost three decades.

Enjoying the automation advantage

To date, less than 10% of organisations globally have embraced financial automation, according to research commissioned by BlackLine in 2020.

Pre-COVID-19, impediments to its adoption included a lack of commitment and resources, along with concern about the speed at which a return on investment might be achieved — the same set of hurdles business process re-engineering and transformation initiatives have faced since time immemorial.

However, enterprises that did make the shift have given it a solid endorsement. That's evidenced by the fact that they haven't cut funding for future automation initiatives.

Part of the reason these enterprises have decided to keep investing in automation may be the benefits they realised last year when COVID-19 lockdowns forced businesses around the country to send their employees home to work. Many enterprises whose accounting departments relied on manual processes and legacy, on-premises solutions found the unplanned switch a struggle.

Conversely, those using automated, cloud-based platforms could migrate to remote working seamlessly and provide decision-makers with up to the minute visibility and real-time updates into the enterprise's financial position.

Beginning the financial automation journey

So, how can Australian organisations that haven't embraced financial automation set about doing so, and realise the competitive advantages that arise as a result?

Unfortunately, the benefits can't be achieved by installing an automated financial solution without overhauling business processes and practices in tandem.

Automation is a journey that begins with a hard look at the status quo — the current state of the enterprise's finances and how its financial function is organised — to identify where bottlenecks exist and where efficiencies could be created.

Migrating as many on-premises applications as possible to the cloud improves visibility across the enterprise and helps attain a bird's eye view of its position at any given moment in time.

The end game should be ensuring business leaders have comprehensive, accurate and up-to-date financial intelligence at their fingertips to enable them to make data-driven decisions that drive productivity, profitability and growth.

Joining the automated accounting community

The good news for Australian businesses only now beginning a financial automation journey is that it need not be undertaken in isolation. There's no shortage of networking groups, forums and conferences where companies can connect with other organisations that have already embraced this new model. Drawing on their learnings can help enterprises avoid common pitfalls and begin realising the benefits of automation sooner.

Working towards a stronger future 

While a national vaccination program has now commenced, many businesses will need to navigate challenging economic conditions as the economy continues to regather steam, following last year's devastating COVID-19 knock. Investing in financial automation will see enterprises better placed to reboot and recover in the months and years to come.