Financial Process Automation and Service Excellence
17
May
2018

Financial Process Automation and Service Excellence – What you need to know

What is financial process automation (FPA)?

Streamlining, standardizing and bringing in continued efficiency in the financial processes, has always been a challenge for organizations. ERPs could solve the problem to an extent, but owing to the changing technology, skill set and the needs of analytical reports, most organizations struggle for achieving consistency and excellence in their day to day operations. Here, FPA plays a vital role in streamlining the three majorly identified F & A processes i.e., Procure  to Pay, Order to Cash and Record to Report cycles. FPA works around the concept of removing manual, slow, error-prone and redundant steps, capturing information from the source, posting it to the pre-defined process with a pre-configured approval matrix providing total visibility into data.

Why do Organizations need FPA?

Financial processes are the support functions of any organization. But these processes are facing significant challenges due to lot of external factors including changing regulations and stakeholder’s expectations. The only way organizations look at for improved margins is by reducing the running costs by bringing efficiency in day to day operations. Businesses today, are focusing on three aspects that have an impact on their business:

  • The economic aspect : Clients demand more and the competition is growing leading to cost implications within the organization.
  • The strategic aspect : Growth strategy considering regulatory changes and taking consumer/technology trends into account demands newer technology
  • The operation aspect : Businesses look for fully scalable, efficient and low-cost operational processes.

To have a broader understanding, the business opt for FPAs because of many short term and long term benefits. Immediate benefits include simplification and standardization of processes, elimination of extra steps, keeping controls intact and inducing governance as needed. This results in lowering costs because required FTE’s to do a complete process are reduced. And because processes are standardized, operational excellence becomes inevitable.

 

How Financial Process Excellence can be achieved

 Rethink the processes/Process re-engineering : We generally get habitual of what is done over and again for long. Any change seems to be impossible and incapable of bringing any efficiency because we believe in what is being done already. To bring in automation in your financial process, one need to rethink the process. You need to find steps which can be either removed or changed to reduce efforts needed to complete them. You will need to create clear guidelines for decision making leaving the least to human intelligence, for a mechanical automated process to happen on its own.

Leverage Technology : You need to bring in technology in the form of tools to automate your processes. This will include scanning, digital processing, image reading capabilities and so on. Introducing tools to do the repetitive tasks, you can ensure error free and quicker completion of certain steps in a process.

Focus on People/cultural evolution : This is a critical factor to be considered by any organization. A bad culture will ensure that the organization is forgotten by the industry soon, while if people of the organization feel connected with organizational goals, they feel responsible for undertaking the task of growth of the business seeing it directly connected with their own growth, efficiency becomes all the more feasible. Read our whitepaper on Cultural Transformation for greater insights.

 

Approach to Financial Process Excellence

Identify challenges :

You need to know the very reason for which you are conducting the entire exercise. What are the bottlenecks holding the completion, what are the repetitive non value adding steps, challenges, pausing the business growth and where all the efforts or time can be saved.

Define objectives

If you know the destination, finding the right path becomes easier. Decide what you want. Then you will be able easily able to decide, where all the improvements are needed and what all needs complete elimination.

Define KPIs

Convert your objectives into measurable and well defined KPIs for the team. Give them reasons to perform and appreciations for achieving.

Innovation – package deal

When you work around process excellence, innovation is the key. Be the disrupter or an early follower, find an innovative way addressing some need of the users.

Comparative study of situation before and after

Do not forget to measure the success rate. “You can’t manage what you can’t measure”. Time to time assessment of quantitative/tangible and qualitative/intangible improvements is inevitable. This gives assurance on correctness as well as encouragement to proceed further.

Keep a tab on what more can be done. Remember, Excellence is a journey , not a destination!

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