Many organisations across the UK are still using paper for administrative tasks such as printing, posting and filling documents. To be precise, every single year the UK issues 11.2bn paper receipts at a cost of £32m. It’s common knowledge that storing paper-based information is both expensive, inefficient and in most cases, time consuming.
The challenge of ridding organisations from administrative burdens such as processing paper receipts goes hand-in-hand with digitising processes and the introduction of new technologies. To date, we’ve already seen finance teams make good progress streamlining and automating processes such as accounts payable and invoice processing.
For instance, artificial intelligence (AI) based technologies are already able to recognise important information contained in documents – invoice or PO numbers, the total invoice cost, the payee, date and if the invoice is on time or overdue. This is certainly set to continue and increasingly finance teams are looking at how they can free up time spent on repetitive activities.
Employee expenses management is ripe for this kind of transformation as much time has to be devoted to handling reimbursements, when the real value for accountants and finance professionals lies in managing policy checks and interpreting data.
More and more there is a move towards digital systems and in a few months time HMRC’s Making Tax Digital (MTD) will come into effect – ending the traditional tax return and requiring organisations to submit digital tax returns using MTD-compatible software. The introduction of MTD will also help to make financial protocol more secure and reliable.
In light of the latest results from a YouGov poll last month, senior decision-makers in finance and accounting admitted they were not the best at keeping receipts and 65% confessed to losing them in the past. Digitising these processes within finance will help prevent the loss of receipts and improve efficiency with this data being automatically backed up online for future access.
This isn’t the only type of digitisation we’re seeing when it comes to translating paper into digital form. Increasingly the use of AI-based technology is transforming the way data is collected and analysed. For instance, optical character recognition (OCR) technology is able to convert typed or handwritten text, whether it’s from a scanned document or photo.
Essentially, the technology can help finance teams and accountants process volumes of data such as paper and e-receipts without increasing headcount. Not only does this save finance professionals from the drudgery of manually transferring information from paper receipts into expense reports – but also harnesses the storage capabilities of AI engines.
As accountants and finance professionals file expense claims, machine learning algorithms are able to identify trends and patterns of expenditure and determine future projections. This provides better visibility and control of real-time spending whilst also harnessing machine learning capabilities in order to increase efficiency, quality and identifying new ways to reduce costs.
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The technology can also be used to help prevent fraudulent claims as policy checks can be built into expense management software. This also increases compliance rates as policy validation is automated and this in turn means that approver intervention is minimal. Features such as this are invaluable to smaller organisations that may not have dedicated finance teams.
Automating for strategic decision-making
It’s no secret that increasingly finance teams are being called upon to provide more strategic support to the business. In order to harness data and support decision-making, finance teams need to stop carrying out transactional processes such as checks and audits.
Automating accounting tasks which are tedious and manual not only frees up valuable time but also increases efficiency, which allows finance professionals to focus on analysis. This is further strengthened by the YouGov poll which revealed 25% of people working in small businesses are spending more than 10 hours a week working on administrative tasks within the department.
The move to AI-based systems and automated processes doesn’t remove the need for skilled finance professionals. Instead there is a need for less repetitive ‘number crunching’ tasks alongside a greater emphasis on the ability to manage and interpret data.
Accessing real-time information is becoming a key consideration for many finance professionals and with the introduction of more AI technologies we’re set to see paper processes dwindle. Given the efficient way most organisations are now able to share information, it makes little sense for finance teams to be re-keying data between systems and sifting papers between departments. The finance teams of the future are agile, cross-functional and harnessing data to drive greater business insights.
With accounting software becoming easier to use, we’ve seen the evolution of technology. From digital spreadsheets for recording transactions to systems which can import transactions, keep track of digital receipts and taxes. With paper orders and invoices all but dead, there are many elements of the financial service sector that AI can replace and paper receipts are the next step.