The Financial Automation Imperative: A CFO’s Guide 

Published on June 11, 2024

Across industries and regions, Chief Financial Officers (CFOs) are constantly being asked to “do more with less.”  CFOs are expected to ensure that any investments—in finances, people, processes, and even technology—pay dividends to the organization and to shareholders. Ideally, CFOs are supposed to accomplish this feat while consuming as few resources as possible.

Given these priorities and the prolonged volatility of today’s markets and supply chains, it only makes sense that automation has become such a topic of conversation within financial circles. After all, automation typically lets you offload and accelerate more mundane tasks, freeing up your staff to focus on strategy over execution.

To explore what the future confluence of finance and automation will look like, Invoiced partnered with CFO Dive to produce The Financial Automation Imperative report. Let’s probe the findings of this research alongside the general benefits and risks associated with financial automation.

Key takeaways

  • Among those surveyed, the top expected outcomes of automation include improving productivity, reducing human error, and refocusing staff time on strategic work
  • To stay competitive and avoid falling behind, it’s crucial to embrace financial automation promptly
  • Cash flow-related automation technologies — namely accounts receivable (A/R) and accounts payable (A/P) — have the highest adoption levels at 49% and 47%, respectively
  • A/R and A/P automation solutions also earned the highest satisfaction levels among users, indicating strong maturity relative to other financial automation categories
  • When considering the purchase of financial automation technology, those surveyed identified the ability to integrate with other systems as their primary decision driver
  • Respondents indicated reporting/forecasting (45%) and A/R (44%) as their top automation priorities
Invoiced Financial Automation Imperative research report

Why financial automation is the future of finance

The Financial Automation Imperative report was created in 2020 from a survey conducted among more than 450 finance and accounting professionals concerning market volatility and their perspectives, plans, and priorities regarding financial automation technology. And with a global pandemic, unpredictable supply chain interruptions, international conflict, economic recession, and more having happened since then, our findings remain relevant today. 

In particular, as businesses leverage automation to free up their accounting staff for more strategic initiatives, they can often direct more brain power toward navigating new challenges or market shifts. Automation also helps drive cost savings and productivity boosts — 55% of executives identified digital transformation as an imperative for productivity.

Of course, the automation journey has many steps, and knowing which technologies are finding success in the real world can prove challenging. This is why we chose to capitalize on the crowd’s wisdom — using our survey to identify what strategies and technologies CFOs prioritized and how those innovations were performing.

What are the current financial technology and automation priorities?

According to our research, the most highly prioritized financial solutions among CFOs and other accounting professionals were those related to information security — with 76% of respondents listing this technology as either a “high” or “very high” priority.

Graph of top financial technology priorities

This makes sense considering the findings of the Association of Certified Fraud Examiners (ACFE), presented in their Occupational Fraud 2024: A Report to the Nations. In particular, the ACFE found that asset misappropriation schemes were the most common type of fraud, reflecting 89% of studied cases.

And within that category, billing was the most common vector of attack. Meanwhile, the most costly asset misappropriation efforts included check and payment tampering, billing, and invoice fraud, with a median loss of $155,000 and $100,000, respectively.

Beyond data security measures, respondents to our survey also prioritized general accounting technology (55% of those surveyed) and banking and payment systems (53%). And all three of these top motivators are operations that can be dramatically aided by automation.

Graph of the top financial automation priorities

As such, when we shifted the conversation to automation specifically, the financial professionals we surveyed indicated that both reporting/forecasting and A/R—45% and 44%, respectively—were their key targets for implementing this functionality. Not surprisingly, 36% of respondents indicated that risk management and A/P were highly prioritized.

The adoption and satisfaction of financial automation

Acting on these priorities, nearly half (49%) of those surveyed have already automated their accounts receivable efforts. And 48% have automated their accounts payable. These two categories also have netted the highest satisfaction rate among respondents who have automated at least one financial process. 

In addition, the financial professionals we spoke with noted that their companies had also prioritized automating:

  • Reporting/forecasting (45%)
  • Human resources (HR) administration (36%)
  • Financial closing (28%)
  • Budgeting (26%)
  • Tax compliance (26%)
  • Risk management (25%)

Outcomes, challenges, and risks of financial automation

Of course, the actual performance and satisfaction you’re likely to experience from a given solution will vary greatly depending on many factors. So, you’d be wise — particularly as a CFO or other financial decision-maker — to closely monitor the success of your automation efforts by tracking various metrics and key performance indicators (KPIs).

Key outcomes

As we’ve already discussed, perhaps the most valuable benefit you’ll realize from automating your financial tasks is the opportunity to refocus your staff. Rather than spending time processing invoices or keying in check details, they can narrow their attention to resolving issues, fine-tuning forecasts, or cultivating relationships with vendors and customers. And often, this shift to more rewarding work increases job satisfaction.

Automation also typically yields faster, more efficient processes by completing routine tasks without direct human intervention. Instead, it relies on centralized workflows to keep invoices, payments, and other financial operations moving. By limiting the human element, automation can also limit the potential for human error to disrupt or slow down operations. 

At the same time, with fewer hands touching any accounting task, you can rein in risk and reduce your overall vulnerability to fraud.

Adoption challenges

While these potential benefits are attractive, investing in any platform — financial automation or otherwise — carries clear hurdles that must be overcome for the project to succeed. The first of these is often finding the right platform.

It should come as no surprise that among the CFOs and financial personnel we spoke with for our survey, 40% indicated that finding a solution provider aligned with all their business requirements was the most challenging aspect of automation. Even when they were confident in a proposed platform or strategy, securing sufficient budget and buy-in from executives, account staff, and IT personnel slowed adoption rates.

S, if you’re looking to move forward on your automation journey, you’d be wise to first invest some serious effort in constructing a comprehensive — better yet, undeniable — business case for this desired innovation.

Need help getting started with automation? 

Check out our Automation Project Planning Guide

Risks of late adoption

Unfortunately, letting these potential challenges delay you can have dire consequences. Among the financial leaders we surveyed, 41% feared their business would struggle to remain competitive if they didn’t move forward with automation.

In particular, they were concerned that their organizations might not be able to capitalize on opportunities or react to the market fast enough. Meanwhile, the price of labor has been steadily trending upwards, making the corresponding cost of manually driven financial processes scale disproportionately to alternatives. As these gaps grow over time, late adopters might be unable to attract the same level of interest from customers or investors.

How do you know if your organization can switch to an automated A/R platform?

Use our Automation Readiness Guide

What are the purchase intent and decision drivers for automation?

When reviewing our survey data, the areas of interest for most businesses planning to automate varied, with reporting and forecasting holding a slight lead. In more detail, these financial leaders wanted to improve their:

  • Reporting/forecasting (28%)
  • HR management (25%)
  • Financial closing (25%)
  • Budgeting (25%)
  • A/R and A/P (24%)
  • Risk management (24%)
  • Tax compliance (20%)

Conversely, the primary criteria cited for choosing a particular automation platform or vendor were much more shared between respondents. Bearing in mind the existing investment in their various other finance systems, the most commonly-cited decision driver — covering 51% of responses — for a given solution was its ability to integrate with other software and tools already being leveraged by the company. Meanwhile, overall cost and ease of implementation for a particular platform were tied for the second most common influence (47%). Ease of use was also prioritized for consideration (40%).

Of course, the overall stability of the economy could impact these levels and areas of interest. For example, 46% of the financial staff we spoke with anticipated that an economic recession would place increased priority on when and how they adopted financial automation technology.

Get in front of your competition by automating your A/R and A/P processes with Invoiced

Financial automation keeps you a step ahead. Invoiced’s Accounts Receivable Automation software delivers streamlined invoicing and collections workflows alongside broad integration capabilities that can fit seamlessly with your existing technology investments. Add to that customized reporting and forecasting built with real-time performance data, and you have a platform that can help you accelerate key processes and drive further refinement as the economy shifts.

Our Accounts Payable Automation software lets you exert more nuanced control over your outgoing payments and overall cash flow. Fraud will be less of a headache as you invite your vendors to our secure network featuring automated verification processes.

So, suppose you’re a CFO looking to build a sound financial automation strategy. Why not experience what Invoiced can deliver — advantages like 45% fewer billing inquiries, 70% improved team productivity, or 90% collections optimization?  Invoiced offers a comprehensive platform with excellent support that caught the attention of hundreds, earning us awards in Easiest Administration, Best Met Requirements, Highest User Adoption, and Easy to Do Business With.

For more information, schedule a demo today. 

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Published on June 11, 2024

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