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With increasing recession fears, ongoing supply chain disruptions, soaring inflation rates, the hiring challenges of the Great Resignation, and the epidemic of quiet quitting, business leaders across industries are experiencing challenging times.
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Key Takeaways:
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Difficult times put pressure on businesses to increase productivity and sales while significantly cutting costs. The ability to meet these challenges and thrive during difficult economic times demands innovation and adaptation. One of the most powerful strategies for increasing efficiency while saving money is automation.
According to a 2022 CFO Study from VIC.AI, 81% of chief financial officers (CFOs) recognize that automation has major potential for optimizing processes, using resources, collecting data, and producing strategic insights in the back office. With 61% of CFOs saying that automation offers significant value, the same study found that almost 60% also plan to invest more in automation throughout 2023 [1].
What Is Automation?
Automation is the practice of reducing the need for human involvement or intervention in a variety of processes. Automation uses technologies like machines, computers, software, and artificial intelligence to handle processes that would otherwise be handled manually by a person.
10 Reasons Why CFOs Are Choosing Automation More Often
Yes, a troubling economy is one reason why CFOs are automating more. The reasons why they choose to automate during difficult economic times, however, are the same reasons why they would choose to automate in a stable economy, as well. Basically, automation has several benefits and can give your business some major advantages – regardless of the economic climate.
1. Save Time
Automation saves loads of time that would otherwise be spent on tasks like manual data collection, data entry, invoicing, bill payments, expense management, report generation, and other, time-consuming back-office jobs.
2. Increase Productivity and Efficiency
The saved time means that you can allocate your resources (i.e. time and labor costs) toward higher-value jobs in your business. Automation increases efficiency in the back office while maximizing productivity throughout your organization.
Read More: 4 Ways to Fight Employee Burnout With Automation
3. Eliminate Mundane Work
Most of the manual processes that can be automated are necessary for business operations, they are also mundane, repetitive, and tedious tasks that are low value in your company. These types of jobs weigh on employees, reduce employee satisfaction, and leave little room for employee engagement. With automation, you can eliminate the need for people to do these kinds of mundane jobs, freeing them up to truly leverage their intelligence and talents while bolstering employee engagement with higher-value work.
4. Require Fewer Employees and Reduce Labor Costs
While automation can free up employees, allowing them to focus on higher-value responsibilities in your business, it can also help you reduce overall labor costs or solve employee shortage problems by eliminating the need to staff certain positions altogether.
Read More: Automation Trends That Will Reshape Your Back Office
5. More ReliabilityWith automation comes increased accuracy. Of course, new technology has kinks that need to be smoothed out, but overall it is more accurate and reliable than people. Whenever people are involved in manual processes, there is a lot of room for human error which means your financial data and reports might not always be 100% reliable.
6. Real-Time Report Availability
One of the most brilliant benefits of automation is that it happens automatically, unlike manual processes which occur on less frequent schedules, such as monthly reporting and account reconciliation. With real-time data, you can access financial data and generate reports that are accurate to the day. So, if you need to know where your cash flow is this week, you'll have timely data you can rely on and won't need to look at last month's report to guess about the health of the company's finances.
7. Actionable Insights
With real-time, reliable financial data available, you can also automate the generation of financial reports to keep track of the most important key performance indicators for your business. You can keep track of the progress you make working toward benchmarks and goals while identifying profit drivers in your business. You can then use these financial insights to make data-driven decisions to improve your strategy and operations.
Read More: How ChatGPT Will Impact The Accounting Industry
8. Improve Forecasting
Thanks to its accuracy, ease, and efficiency, automation also improves financial forecasting. You can generate reliable trailing twelve-month charts to identify trends in your revenue, productivity, and profits in addition to more reliable cash flow forecasts and budgeting.
9. Focus on Core Functions and Strategy
When you and your employees aren't bogged down with loads of menial, daily bookkeeping tasks, you'll be free to shift your focus, attention, time, and resources toward the core functions of your business. As a result, you can improve your strategy and dedicate your resources to aspects of your business that promise a greater ROI.
Why are more CFOs turning to outsourcing? 👇
Download: The Guide To Oursourcing Your Back Office
10. Simplify Scalability
Automation also facilitates business growth by handling increasing workloads – no matter how rapidly the workloads increase. For example, if you're running a company with 50 employees and have one person manually handling payroll, you're likely going to need to hire a second person once you make it to 100 employees. By automating payroll, however, you can hire as many people as your payroll automation software is designed to can handle without having to invest in another full-time employee. Since automation tools aren't limited by hours in the workday, they'll be able to keep up with your business as it grows.
Business Process Automation: What Processes Can Be Automated?
Powerful software and technology have facilitated the potential for automation across industries and departments. In finance, in particular, automated invoice management and payroll processes are popular starting points in addition to expense management, cost tracking, time tracking, purchase order management, vendor payments, and data analysis.
For many CFOs, the primary challenge in automating the back office is finding applications that integrate well together and work with the existing bookkeeping and accounting software system. If you're looking to improve automation in your business's back office, QuickBooks and its many software packages offer a variety of applications that fully integrate with the bookkeeping and accounting system for a seamless experience.
Outsourcing Financial Management for Better Business Leadership
If you're running a small to medium-sized business, then growing or facing economic uncertainties can be particularly challenging, if your back office is not able to keep up. For most SMBs, the cost of a complete back office team is simply not realistic, and, as a result, the business's financial management and future suffering.
This simple truth, however, does not mean that SMBs are out of luck; there's another option. Instead of bringing in a team of full-time bookkeeping and accounting staff, SMBs can outsource their back office functions to a reputable outsourced accounting provider. In addition to providing you with the experienced team you need, an outsourced provider can also help you establish state-of-the-art, fully integrated, automated bookkeeping and accounting systems wherever possible in your organization. As a result, you can minimize back-office costs while maximizing automation, productivity, and financial health.
