By Marina Joseph – Art in Tanzania internship
Many companies have taken significant steps to modernise their finance departments. Digital innovations, which have completely reshaped many sectors and overturned long-held business models, are now offering new, cost-effective ways to enhance Finance’s capabilities. Organisations must abandon conventional finance practices and adopt the digital revolution in today’s highly competitive, data-driven business environment. Many businesses put off switching from conventional finance practices to digital technology because modernising their finance operations entails spending money. However, financial management systems that are obsolete and fragmented are sluggish and prone to human error. The strategic process of leveraging emerging technology to enhance efficiency by streamlining business processes and organisational activities is known as digital transformation. Traditional positions, such as sales, marketing, and finance, must be reimagined to meet the changing competitive landscape and evolving consumer demands.
Accounting departments can leverage digital transformation to transition away from manual processes and automate core finance functions, such as accounts receivable, accounts payable, and payroll. It enables the organisation to eliminate ineffective document-based communication, which is often the source of duplication of effort, errors, and miscommunications. Finance and accounting teams can save time and gain the flexibility they need to expand efficiently as the company grows by modernising their finance operations and streamlining internal processes.
Digital Technologies Transforming Finance
Finance decision-makers will need to integrate their expertise and experience with these specialised tools and applications as these technologies continue to develop and strengthen. Here are some of the financial innovations that are already changing and modernizing business functions.
Advanced-Data Analytics
The issue with obsolete systems is that data is likely scattered throughout the organization. Advanced predictive analytics helps CFOs and leaders develop core processes with data and insights that improve accuracy in predicting revenue and detecting industry patterns, enabling them to avoid market risks and possible stumbling blocks. When old systems were used, it took weeks to get the data and insights needed to make educated decisions. Finance executives and accounting team managers will cut administrative expenses while growing job volumes.
Cloud-based Infrastructure and Software-as-a-service (SaaS)
Because your data is stored on secure, remote servers or the “cloud,” the SaaS model eliminates the need to worry about maintaining, managing, or securing it. Cloud-based infrastructure and software-as-a-service (SaaS) simplify operations and reduce the cost of system upgrades for businesses. Cloud computing is no longer considered cutting-edge; in fact, many people are still using it without even realizing it. Organizations no longer need to manage either cloud-based applications or physical servers while using SaaS.
Robotic Process Automation (RPA)
RPA streamlines business processes and enhances financial processing performance by automating repetitive, manual tasks. RPA software can be configured to integrate with other automated systems, enabling the seamless processing of transactions and minimising the need for manual data transfer between external applications and various accounting systems. Transactional processes before RPA consisted of several steps that were vulnerable to errors. Working in accounts payable and receivable involved separating Excel files from XML files, then zipping the XML files and uploading them to the right website for customers to access. RPA transfers invoices to a designated network folder automatically, navigating the system to find the correct folder and reducing screen clutter. RPA accomplishes this by recording work steps, generating process blueprints, and establishing automated scripts to process data through multiple systems. The entire procedure significantly reduces the number of clicks and the time it takes to upload an invoice.
Machine Learning and Artificial Intelligence
Finance and accounting will benefit from machine learning and AI to enhance balance sheet integrity, predict capital availability more accurately, reduce operating costs, and improve cash collection. Companies can utilise AI to access their data and analytics more efficiently, thereby exposing their full potential. As a result, decisions are made quicker, and expenses, cash flow, and working capital are better managed. The more an AI-based system is utilised, the more it learns and becomes more intelligent. In invoice management, for example, the technology analyzes journal entries using algorithms, natural language processing, and data to simplify invoice sorting. Invoice payment history and trends are leveraged through machine learning and logic to expedite invoice collection and reconciliation, allowing finance and accounting professionals to focus more strategically on strategy and development.
