As a small business owner, you’ve probably wondered how buzzwords like “artificial intelligence” might impact your organization. The truth of the matter is that this new technology will play a significant role in the future of the financial services industry, transforming the way most businesses operate.
In fact, a recent study from management consulting firm Robert Half found that finance professionals across North America believe automation is one of the top three technologies that will disrupt the workplace over the next five years. Furthermore, it found that accounting and finance businesses have expanded their use of automation across all processes tracked over the past year.
With innovative technology such as machine learning (ML) and robotic process automation (RPA) on the rise, it’s easier than ever for small businesses to leverage new tools that streamline the accounting process. Automation can increase overall efficiency and productivity for accountants when completing tasks like invoicing, data collection and entry, documentation management and records reconciliation — which is especially important considering more than 80% of financial institutions believe their organization is not effective or only somewhat effective in developing leaders that can keep up with work’s rapid pace of change.
Although it might seem intimidating at first, automation is here to stay. And the more you implement this technology into your day-to-day accounting processes now, the better off your business will be in the long run. Here are five tips for elevating your small business with accounting automation.
- Leverage data governance tools. It’s becoming more prevalent than ever for financial institutions to protect the integrity of their data. Yet internal and external factors like outdated numbers and policies make it difficult to ensure complete accuracy. By leveraging data governance tools like Segment, you can automate processes such as data validation to create a single source of truth for customer data while also protecting your data integrity.
- Consolidate your ERP and accounting systems. It’s more common for financial service providers to offer direct connectivity with ERP and accounting systems. Integrating these systems allows you to manage all of your primary business processes from one place, using your own platform. In addition, cloud-based bookkeeping systems like Xero make it easy to access your business finances at any time, protect your data and to understand your real-time cash position.
- Adopt AI for internal audits. Vendors like AuditMap.ai provide internal audit platforms driven by a combination of humans and advanced machines. Through its Artificial Intelligence engine maps, AuditMap.ai consolidates and analyses your files against business structures and taxonomies to increase audit coverage and eliminate tedious tasks throughout the audit process.
- Optimize accounts receivable operations. More banks and fintechs are using AI-powered platforms that work seamlessly with existing systems to automate the receivables process and eliminate friction. J.P. Morgan Integrated Receivables, for example, says its solution can increase efficiency with scalable, vertically integrated payment processing.
- Implement account reconciliation software. Many financial institutions are starting to use automation tools to improve the efficiency of rule-based tasks. Yet most aren’t fully aware that these same rules can be applied to automate bank reconciliations throughout the duration of the entire period until close. For example, some small businesses have begun to adopt solutions like HighRadius to automate accounts receivable and treasury processes.
According to a recent study, the financial services industry has the ability to gain approximately $512 billion in global revenue by 2020 with the use of intelligent automation. Yet only 10% of companies have implemented intelligent automation across all geographies and processes. In addition, computer software company Oracle found that by 2030 AI could contribute up to $15.7 trillion to the global economy. With $6.6 trillion of that figure likely to come from increased productivity alone, automation can increase your company’s efficiency while giving your accountant more time to focus on meaningful tasks.
Clayton Weir is the co-founder and chief strategy officer at FISPAN, leading product strategy, partnerships with ERPs and marketing. He previously founded the BC Tech HyperGrowth Accelerator and FinTech Industry Cluster. Clayton sits on the NACHA API Standardization Group, taught entrepreneurship at the University of British Columbia and is a board chairman and finance committee chairman of Canada’s largest independent car sharing organization. He holds an MBA from the University of British Columbia and is a chartered financial analyst (CFA).
Automation stock photo by Wright Studio/Shutterstock