In a time when digitalisation is reshaping industries across the board - from retail to manufacturing, hospitality to pharmaceuticals - the transformative power of technology is fundamentally reshaping business operations.
From cloud-based computing platforms and automation to end-to-end analytics and artificial intelligence, current technologies and software systems are empowering organisations to do truly incredible things.
The finance sector is no exception. According to 2022 research from PwC, 73% of chief financial officers recognise that digitalising the finance function is a high priority. Furthermore, almost half (44%) expect their budget for new, cloud-based technologies to grow in the future.
Now, more than ever before, it is time to explore the impact of digitalisation in finance on your organisation.
The evolution of the modern CFO
In recent years the remit of the Chief Financial Officer (CFO) has changed completely. Today, they are tasked with not only meeting the evolving needs of suppliers and customers but also with providing support to fellow leaders and employees.
The contemporary CFO
Emerging as pioneers of digital transformation within the finance function, today’s CFO are at the forefront of identifying new opportunities, technologies, and strategies. Their influence spans all the way from enhancing data entry processes to driving sustainable growth.
However, the role of CFOs goes beyond software adoption (which includes enterprise resource planning as the backbone). CFOs are also responsible for ensuring that future accounting professionals who join their organization are equipped with necessary skills and tools as well as crafting a strategic vision. This means acquiring both technological and methodological skills.
What is digitalisation?
Simply put, digitalisation is about implementing cutting-edge, emerging technologies to elevate accounting functions and business processes. While the traditional benefits of cost reduction, error mitigation, and freeing the time of finance professions continue, the true potential of digitalisation lies in the ability to access powerful technologies that propel controlling and accounting divisions into the future.
In essence, digitalisation represents business process innovation at its finest.
What is digital accounting?
Digital accounting involves generating, handling, transferring, and managing financial information in an electronic format. It utilises technology to digitise and automate many of the manual accounting processes, enhancing accuracy and efficiency in financial record-keeping and reporting.
Digitalisation in accounting: what processes can be automated?
Accounting, an area once charaterised by manul data entry and paperwork, has undergone a significant transformation thanks to automation technologies. These advancements not only streamline processes and reduce the risk of human error, they also free up valuable time for employees to focus on other, higher-value tasks.
Let's explore some of the key accounting processes that can be digitalised, transforming the way that financial data is managed.
- Data entry and bookkeeping
Gone are the days of manually inputting every transaction into ledgers and spreadsheets. Automation tools can quickly extract data from various sources such as invoices and receipts, compare them to existing data, and automatically populate accounting software fields.
This not only accelerates the bookkeeping process but it also minimises the chances of data entry errors that could lead to discrepancies.
- Invoice processing
Automation eliminates the amount of paper invoices laying around. Instead, they are scanned, digitised, and routed through predefined approval processes.
Intelligent systems can even compare invoice data against Purchase Orders (POs) and contracts, flagging any inconsistencies for human review right at the start of the process.
- Document storage and retrieval
Goodbye paper! Automation allows for the digitisation of documents, making them easily searchable and accessible. This improves document management, creates a digital audit trail, and strengthens collaboration across company divisions.
- Expense management
A digital process helps ensure accurate expense tracking and compliance with internal controls. Employees can capture receipts using mobile applications which automatically extract relevant information and categorize expenses.
The information is then integrated directly into the software, eliminating any need for manual data entry. Automation can also help enforce company expense policies by flagging non-compliant expenses and automatically routing them for approval.
- Financial reporting
Automated reporting transforms the entire process of compiling and generating financial statements. By integrating with various data sources, the software can automatically pull required financial data and generate reports in real-time.
This helps ensure accuracy and timeliness in reporting. In addition, it can be done at regular intervals or on-demand, improving the consistency and standarisation of financial reporting across the organisation.
- Analytics and data visualisation
Automation tools can quickly transform raw financial data into graphics and reports, providing easily digestible insights that help stakeholders understand financial trends, performance metrics, and key indicators. This enables better decision-making and strategic planning.
- Auditing and compliance
An automated system keeps a digital record of every step of the invoice process. It can also easily generate and submit regulatory reports, ensuring that an organization remains compliant with tax laws, financial regulations, and industry standards.
This reduces the risk of penalties and legal issues associated with non-compliance.
- Forecasting and budgeting
Automation facilitates the creation of accurate financial forecasts and budgets by analysing historical data and other relevant variables. This helps organisations to understand their current cash flow, make informed strategic decisions, and adapt to any changing economic conditions.
How does digitalisation benefit accounting professionals?
- Streamlines administrative tasks
Digitalisation streamlines administrative tasks by replacing paper-based documents like purchase orders, shipping notices, and invoices with efficient, cloud-based Electronic Data Interchange (EDI).
This eliminates the need for manual data processing and simplifies communication between organisations, suppliers, and clients. No need to mess around with different internal and external interfaces between you and the client!
- Automates transactions
Cloud-based accounting software makes it incredibly easy for accounting professionals to seamlessly manage and scale manual, routine tasks as well as any other corresponding business processes. For example, with a cloud-based accounting system, invoices and receipts can be automatically directed to an online portal, where they are organised, cataloged, and stored for easy access.
This eliminates physical paperwork and, as there's no physical footprint in the office, there's more space available for staff and expansion.
- Empowers with powerful analytics
Need to do financial forecasting for the next quarter or year? No problem. With digital financial systems, you can capture, analyze, tag, and store every bit of information you receive.
For instance, if you want to run a financial forecast on possible income next quarter, the system will automatically look at past business performance, budgets, market conditions (which you can adjust as necessary), trends, business goals, risks, current revenue, and more to generate detailed reports.
- Enables real-time collaboration from anywhere, anytime
One standout advantage of digitalisation in accounting is the ability to connect staff members regardless of their geographical location through a mobile connection. This real-time access to financial systems, data analysis, and tools helps employees to perform their roles efficiently and effectively.
This not only helps organizations boost competitiveness from a business process perspective as well as attractiveness to potential candidates, but it also helps timely decision-making through access to real-time, always-accessible information.
- Improves scalability
Scalability - the ability to change in size or scale - is absolutely crucial and often the defining factor between business success and failure. Digital finance systems readily adapt to an organisation's growing needs, accommodating expanding client bases, higher transactions volumes, and reduced invoicing times.
Furthermore, these systems are often modular, meaning users can add new capabilities over time to address new needs and challenges. For example, organizations can implement Customer Relationship Management (CRM) to help successfully manage supplier and customer accounts.
- Simplifies the auditing process
Digitalisation ensures the availability of digital records, greatly simplifying the audit process. Because digital records are easily accessible and reviewable, reducing the time and effort required by the financial staff.
Thanks to simplified auditing processes, financial professionals can spend less time worrying about routine reviews and more time focusing on value-added activities and helping other departments. This in turn increases their overall contribution to the organisation.
Are you ready for digitalisation in accounting?
In this era of rapid digital transformation, as businesses worldwide embrace the digital landscape and CFOs tackle new hurdles, the departure from traditional paper-driven processes and manual data entry becomes even more important.
However, with the abundance of digital finance software solutions - specifically cloud solutions - now available, organizations must take the time to consider what's right for them and how such technology fits into their overall plans.
While essential attributes such as cost efficiency speed, and security are clearly prerequisites for any ideal solution, factors such as scalability, seamless integration, and user-friendliness are equally important.
This is where Yooz emerges as a game-changer.
Revolutionise your journey with Yooz
Yooz is a leader in Accounts Payable and Purchase-to-Pay automation, providing a smart, powerful and easy-to-use cloud computing platform. It delivers amazing savings, speed, and security with affordable zero-risk subscription models. With a global footprint encompassing over 5,000 clients and 300,000 users, Yooz is a trusted and proven ally in the digital realm.