What is Finance Automation, and How Does it Work? A Guide

What Is Finance Automation?

The goal of finance automation is to replace manual, repetitive tasks with automated and/or streamlined processes. Typically, finance processes are automated using software like Enterprise Resource Planning (ERP), which is able to autonomously automate manual tasks.

ERP systems enable businesses to manage, track, automate, and integrate their core business processes. It collects and manages data from several departments, including accounting, supply chain, manufacturing, sales, and marketing.

However, finance automation doesn’t just begin and end with ERP. There are many other ways in which finance processes can be automated. In fact, the current spectrum ranges everywhere from digitizing paper processes to leveraging artificial intelligence (AI) to automate decision-making and data analysis.

Examples of Finance Automation

Below are examples of the most commonly used finance automation processes to give you an idea of what it is and how it works.:

Digitization and Processing of invoices

In the past, processing invoices involved paperwork and manual labor. However, with the advent of ERP systems, invoice generation, approvals, and payment processing can all be automated, reducing errors and manual tasks.

Real World Example

BOLDT technologies—developer of AI-driven solutions—automates the processing of invoices for their suppliers and vendors using Xledger ERP as well as their billing, expense process, and bank reconciliation.

You can learn more by reading this case study

Paying Employees

Paying salaried employees is a repetitive task that can consume valuable time from your payroll and accounting team. However, with finance automation software, this process can be simplified and automated.

By leveraging an ERP for finance automation, organizations can now streamline the distribution of paychecks to employees as well as the calculation of wages, deductions, and taxes.

Accounts Payable

The accounts payable process is a series of standardized steps that involve tracking, verifying, and paying suppliers. By following the accounts payable process, companies can ensure they always pay the appropriate amount to the right person at the right time.

Using ERP and automating the accounts payable process is the most effective way to streamline the accounting process. ERP systems can simplify operations, improve accuracy, and reduce error rates in AP management.

The top three ways to improve the accounts payable process with ERP are invoice automation for faster and error-free processing, matching, and tracking orders to ensure efficient reconciliation, and centralizing supplier management for better organization and timely payments.

Payroll Process

The payroll process can be automated using ERP and other finance automation software by integrating payroll with HR and accounting systems, automatically calculating wages and taxes, and issuing payments without the need for manual labor.

Accounts Receivable

The accounts receivable process consists of tracking, verifying, and collecting payments from customers. By following the accounts receivable process, companies can ensure they receive the right payment from the right customer at the right time.

The top three ways to improve the accounts receivable process with ERP finance automation software are invoice automation for faster and error-free billing, matching, and tracking payments to ensure efficient reconciliation, and centralizing customer management for better organization and timely collections.

Expense Management

Expense management is one of the most error-prone accounting areas. In many cases, employees misplace receipts, miscategorize expenses, and make errors in their reports. In some cases, those errors could create compliance issues with tax agencies.

That’s why expense management is one of the processes that benefits from finance automation software the most.

The top three ways to automate the expense management process with ERP finance automation software are by scanning,ensuring policy compliance, and streamlining approval workflows to accelerate reimbursements.

Invoicing

Automated invoicing integrates sales, e-commerce, and project management tools to facilitate invoice generation in real-time. The top three ways finance automation improves the invoicing process are by allowing invoices to be generated automatically and using automation for matching and reconciliation of invoices.

Automate Your Business Processes With Xledger ERP

Xledger is a leading ERP system in the United States that’s helping businesses all over the country automate their financial operations, cut costs, and be more efficient.

Some of the ways Xledger can help your business thrive by automating finance operations include:

• Automating accounts payable and receivable
• Automatically generating financial statements, dashboards, and reports on a scheduled basis
• Automating expense management
• Automating budgeting and forecasting
• Automating tax compliance
• Automating cash flow management
• Automating payroll processing
• Ensuring compliance and facilitating audits

Xledger is the world’s #1 modern online ERP software. Its versatility, scalability, and adaptability. Unlike traditional ERP systems, Xledger’s cloud-based functionality does not require businesses to invest in on-premise servers, IT departments, or other hardware necessary to run the system locally.

The platform integrates data from all your organization’s departments while automating mundane and repetitive tasks. Thus, allowing your accounting team to focus on strategy and forecasting to grow your business.

Xledger online ERP software is a category leader that specializes in automating accounting processes, streamlining financial operations, and connecting all aspects of a business in one place.

If you’re ready to scale out of your simple or outdated accounting software, book a free one-on-one demo with our team of experts. From there, our team will guide you every step of the way.

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