There is little dispute that a strong and well-run accounting department is a true asset to any organization. Good accounting and finance practices help managers and business owners make better-informed decisions. In that regard, an emerging trend referred to as “digital finance” is being discussed among leading corporate finance circles. What is it and how could it help impact your organization?
In a nutshell, digital finance deals with the digitization and automation of all key accounting and finance processes. Here are some examples of how digital finance capabilities could have a significant impact on your business:
- AP Automation – Instead of receiving paper-based invoices from vendors, ask for them to be sent electronically. When that isn’t feasible, scan the paper invoices and enter them into the system using OCR technologies. This approach will reduce the time and labor used to enter each invoice into the system.
- Electronic Invoices and Statements – Instead of printing invoices and statements and mailing them to clients, enable the system to email. Cutting out the printing process not only reduces costs (i.e., no more envelope stuffing and postage fees), it also shaves off several days from outstanding receivables.
- Treasury Management – All major banks offer e-banking and reconciliation features. These can be integrated with major updated accounting systems so controllers and CFOs always have the most current bank balance information at their fingertips and do not need their staff to spend time keying in and reconciling data in multiple systems.
- Management Dashboards – There have been many exciting advancements in reporting and data visualization tools that enable managers to generate reports and slice and dice data as needed. They provide the ability to access information in an easy-to-understand dashboard format anytime. So rather than accounting and finance conducting basic report generation, they can assist with analysis and interpretation.
- Workflows and Alerts – The days of routing documents from one bin or desk to another are going away. Workflow technologies enable a rule-based approach to automating all such processes. Many ordinary transactions can be automatically processed, while those requiring special attention can generate alerts for immediate action. Workflows and alerts work best when most of the data resides in a digitized format; otherwise, they will not be able to access the necessary data to route them to designated individuals or alert them for special attention.
These are just few examples of how digital finance concepts could improve your accounting and finance operations and enable them to better serve rest of your business. Take a look at your accounting department and evaluate the tools that are currently being used to see how you may be able to develop a road map to take advantage of these exciting improvement opportunities.
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