Any business that still does financial tasks such as book-keeping manually operates under a unique paradox. The work must be entirely error-free every time, but with humans carrying it out, it can never completely avoid some degree of human error.
The solution, of course, is to automate tasks that are mundane and repetitive. Machines can replicate the actions needed to carry them out and produce perfect results every time.
Automation is more affordable now than ever before, and it’s certainly cheaper than correcting mistakes in invoicing or payroll. Those mistakes can have far-reaching consequences for those directly impacted, and they can deteriorate trust in the company by employees and clients alike.
That’s why finance is the perfect place to start implementing a program of automation in your business. Your finance staff will appreciate being freed from the shackles of routine drudgery, and the results will speak for themselves.
Automating Tasks, Not Jobs
When it comes to automation in the workforce, it is important to remember why you hired your financial team in the first place. It was not for their ability to copy and paste data from one spreadsheet to another. Removing drudgery from their workday is not the same as replacing them with robots. In fact, it is exactly the opposite. Automation lets them focus on their unique contribution to the company, not the parts of the job they would rather avoid.
Here are some of the tasks commonly performed manually that are ripe for automation:
Perhaps the most obvious function of finance for automation is one that is often carried out by a different department in some companies. International payroll services often fall into the realm of Human Resources because of the sensitive nature of payroll and privacy concerns about employees.
As such, payroll is the step child of both departments, one that no one really wants. No one would miss the hours spend having to reconcile data from many sources, and in the case of an international company, different currencies and even different languages.
With the level of automation currently available, there is no reason at all to keep doing payroll by hand. The speed, consistency, and exactness that automation offers is on full display when it comes to payroll. There are no more worries about human errors, and the job is done in a fraction of the time it takes to do by hand. The process is repeated again and again in exactly the same process, and the robot behind it works continuously until the task is done.
While all finance tasks must be done right every single time, this is particularly true of payroll. Employees count on receiving their correct pay every month. Additionally, errors in payroll could expose your company to fines from tax authorities.
Some Fintech startups offering payroll solutions provide the added value of tax compliance as well.
2. Basic Book-Keeping
When Robotic Process Automation (RPA) first appeared, one of its most common uses was to “scrape” software, giving it the ability to take data from one source and input it into the proper place on another piece of software. This function is perfect for basic book-keeping, which requires a keeping track of income and expenses, which could be recorded in different places in files created by multiple people.
Automating book-keeping is similar to automating payroll. Both require companies to evolve from the long-held practice of working with pen and paper. Information must be available in digital form for the robot to draw from and tabulate.
Book-keeping is also another area of fintech where human error has a tendency to creep in when least expected. In a manual process, all it takes is for the person putting in the data to accidentally write the wrong number, or to write it in the wrong space. With automation, those kinds of errors completely disappear.
3. VAT Reclaim
Companies not based in Europe that send workers to European countries for short term business trips often find their expense accounts full of Value Added Tax charges that they are eligible to clam back after the visit. But because the process is often so complicated, many companies simply write off the expense and leave the money on the table.
With companies now offering automated vat software, often installed on phones as apps, workers can scan in all of their receipts on the spot and file for a VAT return before they even leave Europe. This is particularly useful because every EU state has its own specific VAT rate and its own unique list of goods and services that are eligible for VAT reclaim. Keeping track of dozens of individual systems is complicated enough to discourage business from following through.
The added benefit of the apps and software is the centralised collection of expense data for the workers traveling abroad, making it easier to plan expense spending for similar trips in the future.
Meanwhile, the VAT savings could add up. Even if the amount seems small for each individual trip, the accumulation of unnecessary VAT spending can add up when there are multiple trips made by multiple workers.