Human error in the finance function creates an average of 25,000 hours of avoidable rework at a cost of approximately £878,000 per year, according to research by Gartner. Numbers like this are anathema to modern business, which prioritises organisational efficiency. In Foundry’s 2021 Digital Business Study, improving employee productivity and performance was the top objective for organisations’ digital business strategy.
For finance teams, manual processes can introduce critical mistakes that have a direct impact on business performance. “When people have to gather and process information manually from different sources, it’s not only inefficient, it can also create errors that cause a ripple effect,” says Scott Freedman, Director of Marketing for Sage Intacct.
That’s why many companies are turning to AI- and machine learning-based automation to speed workflows and catch costly mistakes. Automation streamlines previously manual processes to help finance teams close the books sooner, giving them more time to focus on strategic tasks. 50% of organisations are actively researching or piloting AI and machine- learning initiatives, according to the Foundry study.
By ingesting large volumes of data from financial applications across the organisation, machine-learning algorithms also can gain a sense of where data should be placed and what kind of numbers are appropriate for a given field.
“For example, if someone makes a duplicate entry in an expense report, an algorithm will flag the manager,” Freedman says. Sorting out errors at this stage prevents them from holding up an audit down the road. The system can also automate reminders to managers who need to make a decision or approve a change, saving busy employees from having to send repeated emails.
Many common financial processes can be automated, and algorithms can import information from one software application into the form fields of others. Some solutions can even generate reports and send them out to stakeholders.
Automating processes using Sage Intacct has enabled private investment firm Halstatt to reduce the time employees spend compiling consolidated reports and a board book from up to 100 hours to minutes. The company’s expense reporting application now automatically posts journal entries and triggers check payments, lowering fees from £36 per cheque to less than £4.
Automation also ensures that the data Halstatt uses is correct—and creates an audit trail to prove it. As a result, external auditors spend 2 weeks onsite rather than 4 to 6, and the company is saving £100,000 a year on fees and preparation. Overall, Halstatt’s accounting efficiency has increased 60%, giving the company the resources to create an alternative investment structure that has led to a £26 million investment.
“Automating simple procedures can save organisations staggering amounts of time and money,” Freedman says. “By eliminating repetitious tasks, they can develop strategies that drive growth.”