Leveraging AI and automation to scale your finance workflows
An accounting evolution is underway
In the ever-evolving economic landscape small and mid-sized businesses (SMBs) need to navigate, efficient financial management directly impacts the bottom line. But despite the availability of advanced technologies, many growing businesses still grapple with cumbersome and costly manual finance processes that are prone to redundancy and human error.
Finance leaders of these businesses find themselves caught between economic uncertainty, high inflation, geopolitical risks, the rise of machine learning, and an exodus from the accounting field due to burnout or boredom. Now more than ever, organizations need every operational efficiency and cost advantage possible to help them grow across domestic and international domains.
Rather than fearing that technology will threaten the workforce, these technologies should be considered allies to the accountants of the future, since they can help with:
- Increasing the business impact of your accounting staff
- Time and cost savings through the reduction of errors and redundancies
- Creating workflows that scale with your organizational complexity and team size
- Enhanced forecasting, planning, and decision-making
- Improved financial transparency and adherence to regulations
Let’s explore some fundamental benefits this technology can provide to growing businesses and how they can be a catalyst for business growth.
Operational challenges of traditional finance teams
It’s no secret that growing businesses are facing a myriad of external challenges, like inflation, interest rates, supply chain issues, and geopolitical risks. In fact, almost half of SMB financial leaders surveyed said they’re currently facing the most challenging circumstances of their careers. Among those external factors, payment processing is emerging as one of the most significant internal challenges to scalability, efficiency, and accuracy for these businesses as well.
In the traditional finance model, internal finance departments are tasked with manually processing invoices, reconciling accounts, and managing cash flow — all of which are time-consuming and labor-intensive processes prone to errors and delays.
For many reasons, like limited budgets and resources, growing businesses often haven't invested enough to put the right technology in place to manage these workflows. Outdated systems, physical checks, and manual approvals create unnecessary bottlenecks. Delays in payment processing, complicated consolidation or reconciliation, and other inefficiencies cost a business valuable time and expose it to other risks like fraud — which is significantly more likely to happen to smaller businesses than large ones. Most importantly, manual processes are not scalable, which erodes your company’s growth potential.
Scale your workflows through AI and automation
When it comes to scaling processes — and ultimately businesses — the use of AI and automation is nothing short of revelatory. They enable financial processes to be systematized, so repetitive tasks can be completed quickly and accurately.
Automation platforms don’t experience task fatigue or job burnout, and they retain the capacity to continually process more work without additional staff investment. Likewise, AI is able to analyze and process massive amounts of data, provide insights and predictions on trends, which can help support more accurate forecasting.
Paper reconciliation has historically been a labor-intensive, hurry-up-and-wait consolidation of data across various systems. Rarely have companies been able to achieve real-time financial snapshots using paper reconciliation. By continuing to rely on these manual processes, growing businesses are hindering their own ability to reach true scalability. However, AI and automation give leadership the power to spend less time gathering information on the present, and more time to plan for the future.
With the support of AI and automation, your team has more time to play an active role in shaping the future of the business. Rather than being weighed down by a seemingly endless stream of tedious, manual jobs — which only grow more complex as your organization grows — finance teams that adopt technology have the time to explore new opportunities to flex their capabilities, and support other areas of the business.
AI and automation can have a real, tangible impact on your business as it grows. Here are some of the most important and concrete ways that these technologies can truly revolutionize your growing business:
With the support of AI and automation, your team has more time to play an active role in shaping the future of the business.
Cash (flow) is king
An American Express Canada poll found that 63% of small businesses were experiencing challenges due to cash flow issues. Without an accurate picture of your company’s cash flow, critical financial activities such as paying vendors, suppliers, partners, and employees can become precarious. Not to mention, there may be missed investment or growth opportunities — or worse, ones that are undertaken when they shouldn’t be. .png?width=427&height=254&name=Frame%2011752%20(1).png)
Control your cash flow
Cash flow management impacts day-to-day operations as well as long-term planning, and growing businesses need to have full visibility over their working capital.
Automation improves cash flow control
Improving cash flow management comes down to measuring and understanding your cash flow. The better you do both, the more efficiently you can manage, plan around, and deploy your company’s cash. Payments are fundamental to your vendor-to-business and business-to-customer relationships, and automation can help you manage them with ease.
%201.svg){kind=small}
Make data-driven decisions
When it comes to making decisions that will impact the financial future of your business, your ability to store, maintain, and analyze financial data is paramount. AI-powered cash flow forecasting tools can analyze your historical financial data and identify significant trends and indicators to inform better decisions. To perform this type of analysis without these tools would be virtually impossible. It would take a significant amount of time to review all of that data, and no human being has the processing ability to spot key trends as accurately — or quickly — as AI-powered tools can.
Agility is crucial for today’s ever-changing business environment, and better access to data can bring clarity when handling uncertain circumstances.
Accounts receivable (AR)
Predictable payments are the lifeblood of healthy business financials. For a growing business, it can be the difference between a record sales month, or not having enough in your accounts to cover key expenses.
Whether you’re collecting a one-time payment from a new customer or debiting the bank account of a trusted partner, automated accounts receivable gives you secure options in one place. Shorter payment processing times means money hits your accounts faster, and reconciliation happens immediately and automatically. Together, this creates a more accurate and current snapshot of your overall financial picture, which helps with proactive planning and asset allocation.
Accounts payable (AP)
Your reputation with vendors hinges on how well you pay your bills. And for many small and growing businesses, reputation is a fundamental part of maintaining and growing your business. Not only can automated accounts payable processes reduce payment processing errors, but it can help eliminate duplicate invoice payments and prevent fraudulent withdrawals.
Automation helps keep track of vendor terms and deadlines, while capitalizing on any early payment discounts and avoiding any late payment penalties or fees. Plus, electronic payments reduce printing and mailing costs, as well as credit card and wire transfer fees.
AP automation lets you capture more accurate financial data to support advanced analytics and process improvements. Without end-to-end payments automation, executives struggle to accurately understand, predict, and forecast the company's cash flow. Poor visualization of these processes sets businesses up for costly mistakes that waste money and time.
Streamline your workflows
Is your business managing workflows as efficiently as it could be? The reality is, no matter how streamlined you think your business processes are, there is usually room for improvement. AI-powered workflow optimization software is designed to identify exactly where those improvements can be made, and even start making them for you.
AI-powered workflow management tools are able to look at internal process data — like how long it takes an invoice to be approved from the moment it was generated for example — and pinpoint the cause and location of bottlenecks that may be slowing down your process.
Not only can this technology spot any areas that may be creating inefficiencies in your workflow, it can also use machine learning models that can leverage your data to provide real, tangible feedback for how to resolve them. Think of it like a film director, pouring over every minute detail of every frame of the movie as it’s being recorded, providing direction in real time to make sure the components are working together seamlessly.
Establish role-based permissions
Internal controls are critical for small business financial operations and should be managed and protected effectively. With online payment platforms, you can assign permissions and create approval processes based on roles, responsibilities, and even dollar amounts. These permissions help control access to sensitive data and payment approvals, while creating a clear audit trail for reporting purposes. Plus, with mobile access, designated reviewers can validate payments and confirm approvals from anywhere before funds are transferred.
As your company scales and the manual data entry demands on your accounting team grow, it's increasingly difficult for individuals to identify and thwart suspicious activities — especially if internal players are involved. Automated approval workflows are simply more effective at limiting the opportunity for internal theft — which costs US businesses $50 billion every year.
These controls are also crucial for managing spend. They enable you to control the timing of money going out, and ensure the right people sign off without an accountant wasting time chasing them down to sign a check. This all works to support keeping suppliers and vendors happy, because they're getting paid in a timely manner due to streamlined internal processes.
Protect your data
Keeping data safe and secure is imperative in our digital world. It’s valid to wonder how your data is managed and protected in the cloud. For SMBs and growing businesses in particular, fraud can be devastating well beyond the immediate financial impact. A data or security breach makes your customers’ and vendors’ information vulnerable too, which can severely — if not permanently — damage their trust in you and your business.
Unfortunately, small businesses are the often targets of fraud attempts, and criminals often exploit the many vulnerabilities created through manual processes. Bringing your accounting processes online makes it possible to deploy standardized fraud prevention and detection practices covering payment requests, initiation, approvals, documentation, and record storage.
With all workflows and processes in a single platform, policies and procedures can be applied consistently across all forms of payment by any staff across the globe. Plus establishing approval workflows limits the possibility of internal theft by ensuring no invoice is paid unless the designated approvers have validated it from their own desktop or mobile device.
Through the use of rigid, cloud-based data infrastructure networks and systems with strict cybersecurity protocols, automated accounting technologies use features like two-factor authentication and data encryption.
AI-powered fraud detection can also help keep data for you and your clients safe by automatically reviewing and analyzing trends and patterns in your data for any anomalies that could signify fraud. What this means is that any potential warning sign of fraud, whether it’s an abnormal looking IP address, payment, or sign-in attempt, gets flagged to you and your team instantly for review. Again, these tools are constantly reviewing data as it gets generated, so they can generate real-time alerts as they come, allowing your team to review and respond accordingly much faster.
Simplify compliance and auditing
Businesses today are under intense scrutiny from regulators and other governance bodies, and annual audits should be expected. Certain sectors, especially NGOs and other not-for-profit organizations, even require audits to qualify for the funding they need to sustain their operations. The manual process of digging through file cabinets, collecting and assembling all relevant data, accounts, and transactions — hoping your account reconciliation has been properly maintained — is nothing short of a nightmare.
All of that is solved with automation.
Since accounts are automatically reconciled, you’ll never have to wonder if the data you’re providing an auditor is accurate or complete. As each transaction moves through your automated workflow, it is recorded digitally, making fully transparent audit trails practically painless to provide.
At the same time, AI tools can be leveraged to review and analyze historical financial records to identify any potential errors or misalignments that might present challenges throughout the auditing and reporting process. Running parallel to automated reconciliation tools, AI auditing software is able to review every single data point along the way, and instantly flag any discrepancies.
Elevate the role of finance staff
While AI and automation drive benefits for your business as a whole, they also support the job satisfaction of your finance staff. Accountant burnout is an ongoing labor risk, but these tools make it possible to free your staff from tedious, redundant tasks and help apply their skills to higher level, creative, value-added activities for the company.
Given the opportunity, your team members can go beyond being “number crunchers” to elevate their roles as experts and advisors. Happy employees are loyal employees, and less employee turnover is an ultimate cost saver.
At the same time, having their time be freed from those burdensome manual processes enables them to spend their time on other activities that can meaningfully drive the business forward, like building out expanded service offerings, onboarding new payees or customers, and working across other departments on forward-looking plans.
Jennifer Colwell
Accounting Technician at TVFHT
Using Plooto’s payment automation, TVFHT eliminated time-consuming manual processes and fully automated their accounts payable and receivable. This gave them greater control and visibility over cash in and out, and, most importantly, freed up valuable time for their accounting team to focus on supporting their vendors, partners, and organizations under their umbrella.
Read their story >
Are AI and automation your best next step?
Artificial intelligence and automation are here to stay — and they can provide great advantages to those who know how to leverage their benefits. Boosting efficiency ultimately accelerates growth, because it means you are able to much more easily scale your workflows as the business grows in both size and complexity.
Implementing these technologies is like removing the handbrake from your accounting team, giving them back valuable hours in their days to focus on other key initiatives, like onboarding or managing new software, improving processes, or conducting an internal audit or budget forecast. At the same time, you ensure that even as you grow your customer base and bring in more financial data, you have the right measures and systems in place to keep that data secure regardless of how large you grow.
At Plooto, our purpose is to provide a complete financial operations platform that eliminates complex workflows by unifying payments, processes, control, reconciliation, and reporting.
Plooto’s leading payment automation solution simplifies and automates payment processes for small and medium sized businesses, as well as for accountants and bookkeepers who manage these tasks for clients. Plooto makes it possible to use the same online system to pay or collect payments from anyone, foreign or domestic, client or vendor, and reconcile with your accounting software all in one place.