A study of finance and accounting executives has revealed attitudes towards automation and found they have high expectations for the technology, but current offerings fall short.
Improving productivity, reducing human error and giving staff more time to focus on strategic work were the top expectations for a more automated workplace.
The Financial Automation Imperative, a survey of 450 finance and accounting professionals, was undertaken by Invoiced, an accounts receivable automation software provider.
Jared King, Invoiced’s CEO, says: “We’ve seen businesses switch from offline data to cloud financials in the last decade. There’s been a huge shift. The remaining piece is now financial operations.
“Cloud financial or accounting systems are still done with many manual processes, but we see the future of financial operations being full or mostly automated.”
Notably, 15% of respondents said they expect automation to reduce current headcount, and 11% expect it to prevent more hiring.
King says businesses considering automating more of their financial operations are often looking to grow. Whether due to new investment, expanding into a new market or launching a new product, they look at two options: increasing headcount or automating more processes.
King says automation “reduces the headcount they would have to hire,” but the existing headcount is rarely reduced.
“A lot of the time companies do struggle to get additional headcount. Automation helps alleviate some of that burden and prevents them from having to add more personnel.”
More than half (55%) of the study’s respondents said they hoped automation would improve productivity, 53% said reducing human error was an expected outcome and 50% expected automation to refocus staff on more strategic work.
King says finance departments “can also more accurately forecast so that businesses can make more real-time decisions as opposed to just playing catch-up. They can start to get more predictions from the accounting department and that can funnel into better business outcomes.”
Driving automation decisions
When asked about their overall technological priorities, information security was overwhelmingly at the top of the list, with 76% saying it was either a very high or high priority.
With automation, the ability to integrate with other systems was listed as the biggest consideration by 51% of respondents. Ease of implementation and cost came in joint second with 47%, while ease of use was listed as a consideration by 40%.
Nearly half (46%) of respondents said that an economic recession would make financial automation more important.
A separate study undertaken by Compleat titled ‘How tech is changing the role of finance’ found that 51% of finance workers within UK businesses have rushed to implement new financial technology in the last year, citing the government’s Making Tax Digital (MTD) initiative.
The Compleat report found that 19% of finance firms surveyed have upgraded their systems in the last year, and predicted this figure systematically increase in the near future.
However, the data in the Invoiced survey suggests financial and accounting executives are being more proactive than reactive. “[They] are very interested in automation,” says a company spokesperson. “I sense from the data that they are being very thoughtful about it and very pragmatic about it. I think they are aware they could spend a lot of money on automation and not get great results.”
Scope for improvement
Among those who have adopted automation in their financial departments, an average of 35% said they were either very or somewhat satisfied, 54% said they were neither satisfied or dissatisfied, and 11% were somewhat or very dissatisfied.
King believes this is partly due to a lack of understanding of what true automation is. “There might be some confusion about what automation is in the market,” he says. “Companies will say ‘this is automated’ but they are still doing all these manual tasks.
“Just because it’s done with software, like tracking software, doesn’t mean it’s fully automated. A lot of apathy that you read is because they’re not truly automated.”
This is reflected in the top challenges encountered by respondents when adopting automation. Finding a vendor that meets requirements was listed as the top challenge faced when adopting automation by 40%.
Other challenges encountered included securing the budget to adopt (38%), making time for implementation (37%), fear of job displacement (25%) and buy-in from top management (24%).