In today’s fast-paced business environment, efficiency is king… Who am I kidding, we all know in the finance world Cash is King! But I do have to say automating and improving efficiency makes that cash come a lot easier. Manual tasks slow you down, create bottlenecks, and leave room for human error. But what if you could eliminate these roadblocks and empower your team to focus on higher-value activities? Enter business process automation (BPA).
BPA involves using technology to streamline repetitive, manual tasks across various departments. It’s not about replacing human expertise; it’s about freeing your team from tedious work so they can leverage their skills for strategic thinking and problem-solving.
Here’s a few reasons why I think new business owners or honestly any existing ones, should make sure automation is always being sought after in these areas!
Month-End Close
Month-end closing can be a stressful time, riddled with manual data entry, reconciliation, and error-checking. Here’s how automation can transform this process for you and your team.
- Automatic Data Collection: Integrate your accounting software with CRM and ERP systems to automatically pull data from invoices, purchase orders, and inventory management. This eliminates manual data entry and reduces the risk of errors. Most all systems in today’s corporate environment allow for automatic data collection.
- Automated Reconciliations: Leverage software that automatically reconciles bank statements with your accounting records. This saves countless hours and ensures data accuracy. Develop files (even in Excel) that expedite this process.
- Automated Reporting: Generate pre-defined reports with a single click. These reports can be customized based on user needs and provide valuable insights for financial analysis. I 100% would take the time up front to get this setup for your business day one.
Accounts Receivable
Managing receivables involves sending invoices, chasing overdue payments, and applying cash received. Automation can significantly improve this process if you are a small team or single member business handling all of it.
- Automated Invoicing: Schedule invoices to be automatically sent electronically upon order completion. This ensures timely delivery and reduces delays in receiving payments.
- Automated Payment Reminders: Set up automated email or SMS reminders for overdue payments. These reminders can be customized with escalation triggers to ensure prompt action is taken on outstanding balances. This is a must. You have to remind those who owe you money, that they owe you money!
- Automated Online Payments: Integrate online payment gateways into your invoicing system. This allows customers to conveniently pay invoices electronically, accelerating the collection process. Try to steer away from check payment where possible and push for either an ACH or Wire payment to be made. We want that cash as early as possible.
Accounts Payable
Managing payables involves processing invoices, approving payments, and ensuring timely vendor settlements. Automation can simplify this tedious process and will help you manage cash a little closer in the process.
- Automated Invoice Approval Workflows: Establish automated workflows that route invoices for approval based on pre-defined criteria. This streamlines the process and eliminates the need for manual routing. Put a timeline on this workflow so things do not sit too long in someone’s inbox without being approved.
- Automated Payment Scheduling: Schedule payments to vendors based on predetermined due dates and discounts. This ensures timely payments while taking advantage of early payment opportunities. Contrary to the AR approach, we’ll want to hold onto our money as long as possible without causing disruptions in service or credit adjustments to our terms. Push for longer terms here and make sure if your giving 30 day terms on the AR side you at least are getting 30 on the AP side (I’d ask for 45 or 60).
- Virtual Card Payments: Utilize virtual cards for online payments to vendors. These cards offer enhanced security and provide real-time transaction tracking.
Banking
Managing bank accounts involves tasks like reconciling statements, transferring funds, and managing payroll. Automation can significantly improve efficiency when dealing with multiple accounts or banks.
- Automated Bank Feeds: Set up automated bank feeds to automatically download transaction data from your bank into your accounting software. This eliminates manual data entry and streamlines reconciliation processes.
- Automated Recurring Payments: Automate recurring payments like rent, subscriptions, and payroll. This ensures timely payments and reduces the risk of missed payments and late fees. Make sure these items roll into your cash forecast or 13-week file to manage your cash position closely.
- Automated Positive Pay: Implement positive pay, a fraud prevention service offered by banks. This system allows you to pre-authorize legitimate checks, minimizing the risk of fraudulent check payments.
By implementing automation in these key areas, businesses can unlock a multitude of benefits which include the following…
- Increased Efficiency: Automation frees up valuable employee time, allowing them to focus on higher-level tasks that contribute more significantly to the bottom line.
- Reduced Errors: Automation minimizes human error in data entry and calculations, leading to improved accuracy and data integrity.
- Improved Visibility: Automated reports and dashboards provide real-time insights into business processes, enabling data-driven decision making.
- Enhanced Compliance: Automation ensures adherence to regulatory requirements and compliance standards.
- Improved Customer Satisfaction: Streamlined processes ensure faster invoice delivery, timely collections, and efficient payment processing, leading to a better customer experience.
What would you add that has worked for you and your business? Comment here and let us know!
Do you write a newsletter or blog like me? Considering it? I highly suggest checking out Beehiiv for your platform. There’s a free version (always) and if you grow and are looking to monetize your newsletter they have many options. Check it out here! 👇
